eBay wins in New York court

On Monday, the Federal District Court for the Southern District of New York issued a ruling in favour of eBay in an action filed against it by jeweller Tiffany & Co. The court refused Tiffany’s claim that eBay’s use of Tiffany’s marks on its site and for advertising constituted infringement. It also rejected Tiffany’s contributory infringement argument. “Coming on the heels of eBay’s equally decisive €40 million loss in France, this is clearly good news for large auction websites, and bad news for brand owners, particularly those whose marks are often counterfeited,” says Jim Bikoff of Silverberg Goldman & Bikoff LLP in Washington. (For more on the recent French rulings see Controversial rulings give eBay hope on appeal and eBay ordered to pay almost €40 million in damages to LVMH.)
The court rejected the direct infringement claim, concluding that eBay’s use of Tiffany’s marks was fair. It reasoned that the use did not suggest sponsorship or endorsement, but merely described goods offered for sale. As many of the products involved were authentic and eBay promptly removed infringing merchandise following a complaint, the court stated that use in these circumstances was nominative and descriptive.
“With respect to contributory infringement, the court’s ruling is more sweeping,” says Bikoff. “Essentially, the court concluded that mark owners are solely responsible for protecting their trademarks.” According to the court, the key question was "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" goods. Giving its backing to eBay’s Verified Rights Owner programme, whereby eBay requires rights holders to notify it of fake products, the court stated that eBay was doing enough to combat the sale of counterfeit goods on its auction platform.
Tiffany is expected to appeal.
World Trademark Report will publish a more detailed report on the case later this week.
John Batho, World Trademark Report, London

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