Tiffany loses case to eBay

3.6 k views | Posted April 13, 2010 |

In a blow to jewellers in the fight against counterfeiting, a court has ruled eBay is not responsible for “knock-off” product sold on its website.

The US appeals court decision came after Tiffany & Co accused eBay of trademark infringement and dilution by allowing users of its online auction service to sell counterfeit Tiffany & Co jewellery.

Tiffany & Co released a statement soon after the ruling, in which the company’s CEO – a surprisingly candid Michael J Kowalski – leveled some serious accusations against eBay.

“eBay knew that counterfeit merchandise was being sold on its site – and eBay took no effective steps to stop it. eBay deliberately misled consumers for profit, and unfortunately, the court has justified its actions. The consumer is the real loser today,” he said.

eBay claims it is merely a hosting service, and any trademark infringement lies with individual users, not them.

Despite their win, the court ruling suggested eBay might still be violating false-advertising laws if it does not warn consumers that items billed as Tiffany & Co products are not authentic.

"A disclaimer might suffice," the ruling stated. "But the law prohibits an advertisement that implies that all of the goods offered on a defendant's website are genuine when, in fact, as here, a sizable proportion of them are not."

The court ruling indicated that eBay met its responsibilities to brand holders. The company claims to have spent millions of dollars to track down counterfeiters and remove suspect listings.

US trademark attorney Sally Abel told Reuters: "It's a win for e-commerce," adding that the ruling helps define "the need for the online marketplace to have rules and to protect trademark rights up to a point -- but only up to that point."

Tiffany & Co, which has had an ongoing battle with eBay since 2004, said it would consider another appeal to the US Supreme Court.

The company has a long history of trouble with counterfeiters. Counterfeit jewellery has been seized on two separate occasions this year in Australia alone.

A shipment of counterfeit Tiffany & Co jewellery was seized in Perth earlier this year. Tiffany’s knock-offs were also discovered in police raids in Sydney last month.

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