- The Guardian, Tuesday July 15 2008
eBay has won a four-year legal battle with Tiffany over the jeweller's complaint that the online website amounted to a "rat's nest" auction of counterfeit watches, bracelets and necklaces.
A judge in New York ruled yesterday that eBay could not be held responsible for policing the contents of its site, and that it was Tiffany's role to draw fake designer jewellery to the auctioneer's attention.
The verdict is a relief to eBay which lost a similar case in Paris two weeks ago when a French court ordered it to pay €38.6m (£30m) in damages to the luxury goods manufacturer LVMH for allowing the sale of fake bags, perfumes and designer clothes.
Internet experts had suggested that a series of verdicts against eBay could threaten the business model of many customer-to-customer websites, although others maintain that a crackdown on online fraud is overdue.
In a written ruling, US district judge Richard Sullivan said: "Tiffany must ultimately bear the burden of protecting its trademark." But he said he was "not unsympathetic" to Tiffany's complaint, and hinted that US law might need a fresh look. "Policymakers may yet decide that the law as it stands is inadequate to protect rights owners in light of the increasing scope of internet commerce and the concomitant rise in potential trademark infringement," he said.
The dispute between eBay and the 170-year-old jewellery boutique dates from June 2004 when Tiffany lost patience with the quantity of silver merchandise available on the internet which claimed to bear its brand.
In court, the jeweller described eBay as a "proverbial rat's nest" of knocked-off goods, and testified that the auctioneer earned $4.1m of revenue from purported Tiffany goods over a four-year period.
eBay did not deny that counterfeit items sometimes appeared on its site, but argued it removed them swiftly whenever they were flagged up.
"Today's decision is a victory for consumers," said eBay in a statement. "The ruling appropriately establishes that protecting brands and trademarks is the primary burden of rights owners."
The outcome was greeted by NetChoice Coalition, a group representing hi-tech companies, which said a Tiffany victory "would have ended up foreclosing an entire category of ecommerce".
