NEW YORK | EBay Inc. scored an important victory in court Monday as a federal judge said companies such as jeweler Tiffany & Co. are responsible for policing their trademarks online, not auction platforms like eBay.
Tiffany sued eBay in 2004, arguing that most items listed for sale as genuine Tiffany products on eBay’s sites were fakes.
But U.S. District Judge Richard J. Sullivan in New York ruled that eBay can’t be held liable for trademark infringement “based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites.”
The judge said that when Tiffany notified eBay of suspected counterfeit goods, eBay “immediately removed those listings.” Although the online auction company refused to go further, by preemptively taking down suspicious listings for Tiffany jewelry, the judge said eBay didn’t have to make such a move.
EBay spokeswoman Nichola Sharpe said Monday the ruling “confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting.”
Mark Aaron, a spokesman for Tiffany, said the company was “shocked and deeply dismayed” by the decision. Tiffany lawyer James Swire said his company might appeal. Mr. Swire said eBay should be responsible for counterfeits on its sites, or else sellers of fakes could “go on victimizing consumers.”
The Tiffany ruling was a welcome twist for eBay, which recently lost a different case stemming from counterfeit luxury goods. Last month, a French court ordered eBay to pay more than $61 million to LVMH Moet Hennessy Louis Vuitton SA, which complained it was hurt by sales of knockoff bags, perfume and clothes. EBay is appealing that ruling.