Court Rules it's up to Tiffany, Not Ebay, to Stop the Counterfeiters

Tiffany & Co. recently sued eBay in an effort to stop counterfeit products from being auctioned on the website.  Tiffany lost, with the judge making it pointedly clear that it is Tiffany's responsibility to police the counterfeiters.  Including the famed Tiffany blue box.

Tiffany argued that since eBay was aware of the problem, they had a duty to solve it.  Ebay said they were more like an online classifieds ad service than a flea market and therefore can't control what is sold.  When Tiffany notified them, they took products off the site.  But, it was not up to them, they argued, to identify the fake items.  The Court agreed.

“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.”  "This ruling appropriately established that protecting trademarks is the primary burden of rights owners -- not marketplaces like eBay," said Rob Chesnut, senior vice president and legal counsel at eBay, based in San Jose, Calif.

Tiffany is expected to appeal. "We continue to believe that eBay is legally responsible for the trademark infringement of those selling counterfeit Tiffany jewelry and that eBay cannot avoid liability by placing the entire burden for enforcement on Tiffany and on the other manufacturers' well-known, brand-name products," says Mark L. Aaron, Tiffany's vice president of investor relations.

What is interesting is that a recent similar case in France had the direct opposite result.  A French court upheld a ruling that eBay pay LVMH Moët Hennessy Louis Vuitton and sister company Christian Dior $63.1 million in damages for auctioning fake goods. 

So, who is right, us or France?

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