By Ryan Sadler, Legal Team
The U.S. Court of Appeals for the second circuit ruled against luxury jeweler, Tiffany & Co., last month, finding eBay is not liable for trademark infringement even though some of its sellers market counterfeit goods. Tiffany accused the online auction house, eBay, of contributory trademark infringement because it allegedly turned a blind eye to a steady stream of sellers offering fake Tiffany items. This decision marks the end of a six-year case; Tiffany & Co. originally sued eBay after finding through an internal investigation that 73 percent of eBay listings for Tiffany products were fakes.
Tiffany & Co. also feared losing control over the distribution of their products in the face of a growing secondary market. Therefore, its goal in filing the suit was two-fold; it wanted to stop the sale of counterfeit goods and clamp down on the online trade of their branded genuine goods.
The Court held that there was no liability for contributory trademark infringement on eBay’s part because, among other things, eBay removes auctions of fake goods upon request. The trial evidence revealed that eBay stopped every single auction for which Tiffany complained of counterfeit goods. Furthermore, eBay proved it went above and beyond the letter of the law by spending $20 million per year on tools to promote trust and safety on its site, including the “buyer’s protection program.”
This case serves as not only an encouraging victory in the realm of trademark law; it also has broader implications for all e-commerce, including Sedo. Resale value is becoming an increasingly relevant criterion for consideration when purchasing consumer goods, and online marketplaces are creating unprecedented forums for exchange of items ranging from baby strollers to domain names.
Shortly after the decision was announced, eBay general counsel, Michael R. Jacobson, echoed this sentiment by stating that "The decision is a critically important victory for online consumers who want the best prices for genuine products… The ruling validates eBay's leading efforts to fight counterfeiting and its commitment to providing consumers with choice and value in a safe and trusted marketplace.” Here at Sedo we fight for that cause every day. By constantly improving our tools and programs, we have been able to stay a market leader.