The jeweller first took action in 2004 against eBay, claiming
that its anti-counterfeiting processes were not rigorous enough and
that it must bear some responsibility for the large numbers of fake
Tiffany goods being sold through the site.
Tiffany said that 73% of supposed Tiffany goods that it checked
were fakes.
EBay's policy is to remove fakes from sale when asked to do so
by genuine trade mark holders, but not before notification. Under
its policies, responsibility for identification of fakes lies with
the trade mark holder.
Last month a New York court backed that approach. Judge Richard
Sullivan said that eBay's policies were rigorous enough.
In his ruling he said that eBay could not be held responsible
for trade mark infringement "based solely on their generalized
knowledge that trademark infringement might be occurring on their
Web sites".
"Tiffany must ultimately bear the burden of protecting its
trademark," said the ruling. "The issue is whether eBay continued
to provide its website to sellers when eBay knew or had reason to
know that those sellers were using the website to traffic in
counterfeit Tiffany jewelry. The Court finds that when eBay
possessed the requisite knowledge, it took appropriate steps to
remove listings and suspend service," it said.
Tiffany has now lodged an appeal against that ruling, arguing
that the judge's view of trade mark law was wrong.
"[Judge Sullivan] got several important legal issues wrong,"
Tiffany lawyer James Swire told the Associated Press. "The judge's
entire analysis of what is Tiffany's responsibility with respect to
the site versus eBay's starts from an incorrect basis."
"The fact of the matter is eBay has created the venue, eBay is
profiting from the venue, eBay absolutely controls the venue,"
Swire said. "It's eBay's obligation, once it has knowledge ... to
take the knowledge to investigate and stop the sale of counterfeit
merchandise."
EBay has faced other legal challenges to its auction system from
trade mark holders. It lost two French cases this year to luxury
goods manufacturers who argued that it should bear some
responsibility for the sale of counterfeit products.
Handbag, clothing and perfume company Louis Vuitton Moët
Hennessy (LVMH) claimed that the company did not do enough to
combat the sale of counterfeits of its goods and a French judge
agreed.
The court found "serious faults" in eBay's processes that led to
auctions of counterfeit goods going ahead and ordered it to pay €39
million to the brand holders. By allowing the sales, eBay had
damaged the reputation of luxury brands such as Louis Vuitton and
Christian Dior, it said.
EBay also had to pay out €20,000 to Hermes over the sale of
three Hermes bags, two of which were fakes.
