Forget Breakfast, Ebay Eats Tiffany's Lunch

What happens when the panache of Tiffany's trademark collides with the formidable eCommerce engine of eBay? The context of the battle was Tiffany's action against eBay for trademark infringement on the basis that eBay failed to police its sellers to remove counterfeit goods falsely bearing the Tiffany trademark. By this inaction, Tiffay complained, eBay directly and contributorily infringed upon Tiffany's trademark. eBay responded that whenever Tiffany told it to remove counterfeit goods from ongoing auctions on eBay's website, eBay immediately did so. Tiffany responded that removal at that late date was not enough; eBay should have anticipated infringement of Tiffany's mark; for example, by removing sellers listing more than 5 Tiffany-branded items before the auctions commenced. (Apparently sellers of 4 Tiffany-branded items were usually legitimate, but sellers of 6 items were crooks.)

The case comes before Judge Richard Sullivan in the United States District Court, New York City, for a bench trial. Evidence heard (we don't know if Audrey Hepburn's ghost appeared in support of Tiffany's) and arguments considered. Decision - eBay off the hook.

In his decision (PDF doc here), the Court finds that eBay can lawfully use and allow its sellers to use the Tiffany mark to advertise or sell genuine Tiffany goods, something that lawyers call a trademark's "nominative use. " Further, the Court refused to impose a duty on eBay to take action in anticipation of possible infringement and found that it was enough for eBay to have removed particular counterfeit items when Tiffany told eBay about them:

The law does not impose liability for contributory trademark infringement on eBay for its refusal to take such preemptive steps in light of eBay's 'reasonable anticipation' or generalized knowledge that counterfeit goods might be sold on its website. Quite simply, the law demands more specific knowledge as to which items are infringing and which seller is listing those items before requiring eBay to take action.

Since there is a lot of stake here, Tiffany's will probably appeal this decison. Audrey and her blue boxes may yet prevail. Dinner will be served at the US Court of Appeals in the upcoming months. Who will walk away satiated?

Thanks for blogging with me thus far.