eBay Beats Tiffany In Net Trademark Case

sm62704 notes a Reuters story reporting that eBay has beat Tiffany in court in a "knockout" decision. If this had gone the other way, not only would eBay be in trouble (especially after the loss of a similar case in France), but so would Net commerce as a whole. Tiffany seems certain to appeal. "All of Tiffany's trademark infringement claims against eBay were rejected — a knockout blow to the four-year-old lawsuit that had been closely watched by Internet companies as well as luxury goods makers seeking to stop the sale of counterfeit products online. Tiffany & Co. had alleged that eBay turned a blind eye to the sale of fake Tiffany silver jewelry on its site. EBay had countered that it was not in a position to determine which goods were knock-offs... and had said the jeweler did not adequately participate in eBay's programs that help brand owners prevent fraud. The judge... said he was 'not unsympathetic' to Tiffany and others who have invested in building their brands only to see them exploited on the Web. But he said the law was clearly on eBay's side."

Regular auction stats anyone?

Does anyone know if Tiffany and Co. has sued any "brick and mortar" auction houses for this same type of thing? I suspect that there are any number of antique shops that routinely, perhaps unwittingly, sell fake Tiffany pieces.

Re:Regular auction stats anyone?

any number of antique shops that routinely, perhaps unwittingly, sell fake Tiffany pieces

"Routinely" and "unwittingly" can be very different things. People in the antique business usually know when they're holding an actual piece of Tiffany silver work in their hands. And if a professional in that line of work can't tell the difference, then they've got pretty good cover if the real Tiffany comes knocking. But that's not what this is about - this would be more about someone setting up shop as a Tiffany dealer, as many busy sellers on eBay have essentially - and fraudulantly - done. It's not the occasional auction where someone is unloading grandma's old stuff and thinks they've got a Tiffany piece. It's the people who set up eBay stores and carry the whole product line, including obvious knock-offs of current-issue Tiffany products. Whole different thing.

So are they going after street vendors?

There are brick and mortar equivalents to your eBay Tiffany vendor -- everything from tables in Chinatown to flea markets.

Does Tiffany's actively go after the flea market owners/managers who happen to have a vendor renting a flea market stand and selling fugazi jewelry?

Physical Inspection of Goods

People in the antique business usually know when they're holding an actual piece of Tiffany silver work in their hands.

That's the big difference right there. EBay never holds the item so there really is no way they can reasonably tell if an item is a fake. The only real way is to actually inspect the item AND have a paper trail to help authenticate its origin. That's what they do in the art world for valuable paintings. EBay is looking for plausible deniability when they know damn good and well they aren't doing the one thing that actually can ensure authenticity reliably.

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Considering their pricing scheme, I always thought it a bit shady that eBay doesn't hold the items. I mean.. Christies takes possession of the items, and their "warehouse" space is in the most expensive parts of several dozen cities.

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While you may have a point, does it matter? That's like not prosecuting a murderer because you reckon there are probably other murderers who haven't been prosecuted.

eBay beats Tiffany?

Oh just leave the gal alone. So she made some stupid pop hits in the 80s and then tried to revive her career by posing for Playboy [outtahear.com]. That's still no reason for eBay's attack.

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And it's particularly ironic since her biggest hit, "I think we're alone now" was a cheap knockoff of the original by Tommy James & the Shondells.

The court's 66-page decision

If you'd like to read the actual decision [beckermanlegal.com]. (PDF)

Thanks!

We usually get so much inaccurate legal speculation, that it's a good thing to have original sources like that to link to.

To that I'd like to add that there is a type of fair use specific to trademarks and relevant to this case-- nominative fair use [publaw.com]. I mentioned that in my submission, but I guess this guy beat me to submitting it.

I'm mentioning it because, otherwise, we'll probably have someone trying to apply the four factor test from copyright law to trademarks once the issue comes up... :-)

- I Don't Beli [eff.org]

Re:Thanks!

My pleasure. That's why I did it. I can't for the life of me understand why the major media, when they cover a litigation news story, never give you the actual document to read. In these days of electronic filing of almost all federal court papers it is inexcusable.

hmmm...

Whatever the law states here, it's a sad day when eBay wins something.

Knowing eBay, and how much contempt they have for law, justice, and fairness, this win has to indicate that there is a deeper problem with the legal system.

Re:hmmm...

Why would the rightness of a particular decision be related simply to the persons involved?

deep blue something

I said 'What about eBaying Tiffany?'
And she said 'I think I've sold some before
And as I recall, I think we both made a profit'
So I said 'Well, that's one court case we've won.'

How does the case compare with the French one?

Apart from the oblig. French jokes, does anyone know if the respective laws in France and the US regarding this matter are different enough to warrant the difference in verdicts, the interpretations of the judges are different, or the two cases are simply not that similar?

Re:How does the case compare with the French one?

I am an eBay employee, and not a lawyer or a PR team member, so the following opinion is useless drivel with a decided slant in favor of my employer. [/disclaimer]

The two cases are quite similar, but the laws in France protect French companies almost as much as they attempt to screw non-French companies. Remember the anti-competitive suit against Apple for selling iPods & music to go on them?

The cases are similar in that both plaintiffs are luxury goods makers that don't like the fact that the gray market (legit goods being resold) is obscuring the counterfeit market. The companies' solution is to attack a (the) central point where the black and gray markets collide. In attempting to do so, they demonstrate their failing to understand (or unwillingness to admit) that the black market has and will always exist.

In the US, this case has shown that the burden of protecting a trademark falls on the trademark holder, especially when the market is as willing as eBay has been (right or wrong) to remove auctions that trademark holder's believe violate their trademark. France has determined that the burden falls on the marketplace to ensure that the trademark holder's trademark is protected. The French case has shown that not only is eBay responsible for preventing the sale of counterfeit goods, it is also responsible for preventing the resale of legitimate goods that the manufacturer opposes. From my comment on the French ruling [slashdot.org]:

What's especially stupid about this is that if LV winds up forcing eBay out of this category, 100 new markets will open up. This has already started with the counterfeit sellers who have been forced off of eBay. Example: You can't buy a gun on eBay. I think it was after Columbine that eBay voluntarily exited the gun category. Since then there are a bunch of auction sites specifically for guns. By keeping one big market, it will be far easier for LV, Tiffany, and others to manage the counterfit & legit gray market. This is basically another example of an old company failing to understand online commerce.

counterfeit goods

The judge... said he was 'not unsympathetic' to Tiffany and others who have invested in building their brands only to see them exploited on the Web.

Yeah but they don't mind sending the production process over to a country that

a) exploits *their* workers

b) doesn't care about copyright

c) is prepared to make counterfeit goods from idle production time and undercut the company that outsourced the production process in the first place

Looks like those communist Chinese are learning how to be quite effective capitalists, what did Tiffany *expect* to happen. Except they don't go back to where and how the goods were produced noooooooo they go and sue a third party clogging up the legal system - what a mockery of the legal process. At least the judge used a foam club over the four year period.

Tiffany should've hired some CoS lawyers

It's funny that eBay will defend the sale of bootleg products but has caved into the Scientologists on the sale of e-meters and authorized copies of church literature. Obviously the difference here is that the volume of bootleg stuff far outweighs the amount of CoS materials available for sale. The fake stuff is too much of a profit source for eBay to walk away from. The good news is that eBay obviously won't mind if you put a bootleg e-meter up for sale.

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Yes that is interesting I agree. But on the other hand I can see the horde of lawyers being unleashed on EBAY. Whenever religion rears it *UGLY* head everyone runs for cover and poor EBAY would be out on a limb. I actually feel a little sorry for EBAY(in this instance only) they are in a truly no win situation. Religion is treated (like in other countries) differently in the US (I really don't care what side you are on). Some countries are nut cakes (and attract the same) and you couldn't get a honest verdi

Ruling

Well I hope the plaintiffs will be ordered to cook eBay a hearty breakfast too.

All Fake

I don't know. I'm kind of tired of doing a search for designer suits and finding page after page of obvious Chinese-made ripoffs. And to make matters worse, eBay makes you jump through hoops to report fakes - the "report" link goes to a FAQ page instead of a real report link. I actually wrote to eBay about this sub-optimal behavior, and they wrote back that they were under no obligation to listen to my suggestions.

Re:All Fake

I've tried reporting obvious counterfeits to ebay, and sellers selling nothing but them. To date, eBay has not removed a single item i reported or any seller. Why would eBay care? They make money off of each sale, but nothing off a pulled listing.

eBay is digging a big hole

Auction houses in the real world depend for their success on reputation. They employ experts, real experts, to check the provenance of anything of any value. eBay is not a true auction house; it is a vehicle for the sale of stolen and counterfeit goods. Which means that, no matter what happens in the US today, eventually someone will come after it. Perhaps in the next big share collapse the real auction houses and goods manufacturers will buy its shares and simply shut it down; perhaps the Chinese will do what the US did, change from a country that encourages piracy to one that tries to stop it, and take action.

In the meantime eBay has created a hole for a real on-line auction system. It would be quite difficult to set up, require heavy means of seller verification, but provide a way to sell high value items securely.

Not that I am defending the "luxury goods manufacturers" who themselves are now fake. "Burberry", for instance, is just another Chinese knock off shop, while Barbour and Mulberry in the UK are real local manufacturers. Burberry has destroyed some of the value in the real manufacturers by its faking. It's Gresham's Law in action. There really should be a law that all vendors must state clearly in any advertisement what the main country of manufacture of their goods actually is.

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*shrugs* They've got some cheaper collections where the pieces (new) are about a $100-$200, so I could possibly see some of the real pieces going for about $50 used. I think it's all about doing research, knowing the prices and what the real pieces look like. I ran a search on a necklace I own and most of the knockoffs are obvious.

I think accountability is a little hard 'cause there are also lots of people who want to resell real Tiffany's pieces and don't have proof, 'cause it was a gift or they bought it

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And ebay claims that they're authentic how?
By claiming they're an auction house, they get responsible for the seller's description being fraudulent? Or is it that their paypal division(not involved in the auction, just the sale) didn't pay back fast enough the stinged buyer?

Or do you mean some other type of accountability? I mean, seriously, the only thing confusing is that eBay is an auction house, if you'd call them classified ads, you'd probably be closer to how involved they are in each transaction(bu