Tiffany Announces eBay Counterfeit Collection
eBay took a hell of a beating last month in the European courts, which found the online auction site responsible for counterfeit sales. So eBay’s victory in a similar case in the United States today must be particularly sweet. A U.S. judge has ruled in eBay’s favor in the company’s long legal battle with Tiffany Co., finding that it is not legally liable for counterfeit Tiffany jewelry sold on its auction site. Claiming that eBay (EBAY) had an obligation to investigate the authenticity of items put up for auction on its site, Tiffany (TIF) sued the company for trademark infringement in 2004. But Richard Sullivan, Judge of the U.S. District Court for the Southern District of New York, ruled that the obligation is Tiffany’s, not eBay’s. “Companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites,” Sullivan said in his ruling. In short, a trademark owner must police its own mark.
eBay was overjoyed by the ruling, which has effectively relieved it of the potentially significant financial burden of examining all its auction listings for possible counterfeits. “While today’s decision is a victory for consumer choice,” said Nichola Sharpe, an eBay spokeswoman, “it is a shame that so much effort has been wasted when Tiffany could have worked with eBay to more effectively fight counterfeits.”