Trying to have Tiffany’s for Breakfast?
In the news recently, tiffany Jewelers lost an important lawsuit against eBay. This was by the second circuit U.S. court of appeals, so it’s not good news for Tiffany.
This occurred last month. The result found eBay not liable for trademark infringement even though some of its sellers market counterfeit goods. Tiffany’s case was that eBay contributed to trademark infringement because it allowed a steady stream of sellers to offer fake Tiffany items. Tiffany’s seemed to feel that the famous auction web site should be penalized for its part in the sales that use the Tiffany name, but deprive Tiffany of its rightful profits. This case has been in the courts for 6 years. The original tip-off to Tiffany was that 73 percent of eBay listings for Tiffany products were fakes. Instead of going after each individual seller, Tiffany tried to go after eBay – a much easier target. But this strategy failed.
In addition to stopping the sale of counterfeit goods, Tiffany also wanted to control the online trade of their branded genuine goods. They don’t seem to appreciate how successful eBay is at marketing their products and benefitting from the name – even for the real thing.
But, the court disagreed. They posit that eBay is not liable for several reasons. One of the key reasons being that eBay removes auctions of fake goods upon request. To eBay’s credit, an investigation showed that eBay stopped every single auction when Tiffany complained of counterfeit goods. Beyond this diligence where Tiffany is concerned, eBay has been careful to develop or acquire tools to promote trust and safety on its site, including the buyer’s protection program. At no little cost to eBay, reportedly this effort sets them back $20 million per year.
Taking a step back, the results of this lawsuit can be looked at as a good thing ecommerce in general. As long as a company is diligent to protect buyers and sellers and effectively discourages fraud and the many types of rip-offs that can occur on line, they should be protected from frivolous lawsuits. These issues become even more important when we look at resale services like eBay which somewhat change the market. Millions of people are able to benefit from old items in their dresser and garage by selling them on line compared to just a few years ago, we were stuck with them for life.
So, as long as you are doing honest business, whether an individual selling some unwanted family heirlooms or an online service helping people to trade over the internet, you should feel a bit reassured by this recent ruling. As always, though, caveat emptor!
