eBay Not Liable for Sale of Counterfeit Tiffany Jewelry on its Auction Site: NY District Court

Holding:

In a ruling that runs counter to those issued by European courts, the U.S. District Court for the Southern District of New York dismissed trademark infringement claims filed by world-renowned jeweler Tiffany against online auction site eBay, Inc., stating that Tiffany should bear the burden of policing its valuable trademarks in internet commerce. In dismissing Tiffany's charge of direct trademark infringement, the district court found that the use of Tiffany trademarks by eBay in its advertising, on its home page and in sponsored links purchased through Yahoo! and Google, is a protected, nominative fair use of the marks. With regard to the claim of contributory trademark infringement, the district court held that the standard was not whether eBay could reasonably anticipate infringement by people selling Tiffany knock-offs on its site. But rather, the standard to be applied was whether eBay kept offering its services to sellers it knew or had reason to know were infringing on Tiffany's marks. The result of the application of this standard is that Tiffany must ultimately bear the burden of protecting its trademark. Policymakers may yet decide that the law as it stands is inadequate to protect rights of owners in light of the increasing scope of Internet commerce and the concomitant rise in potential trademark infringement. Hence, the district court similarly dismissed Tiffany's charge of contributory trademark infringement.

Detailed Summary:

Plaintiff Tiffany (NJ) Inc. and Tiffany & Co. (“Tiffany”) are engaged in the business of design and sale of high quality and luxury goods under the TIFFANY Marks, including jewelry, watches, and home items such as china, crystal, and clocks. The protection of the quality and integrity of the brand and the trademarks is critical to Tiffany’s success as a retailer of luxury goods. Opinion, p. 4, citing Kowalski Decl. paragraph 4.  Tiffany does not sell or authorize the sale of Tiffany merchandise on eBay or other online marketplaces. More generally, Tiffany does not use liquidators, sell overstock merchandise, or put…

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