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Tiffany (NJ) Inc. v. eBay, Inc.

United States District Court for the Southern District of New York

July 14, 2008, Decided; July 14, 2008, Filed

No. 04 Civ. 4607 (RJS)

Opinion

 [*469]  OPINION AFTER BENCH TRIAL

RICHARD J. SULLIVAN, District Judge:

Tiffany, the famous jeweler with the coveted blue boxes, brings this action against eBay, the prominent online marketplace, for the sale of counterfeit Tiffany silver jewelry on its website. Specifically, Tiffany alleges that hundreds of thousands of counterfeit silver jewelry items were offered for sale on eBay's website from 2003 to 2006. Tiffany seeks to hold eBay liable for direct and contributory trademark infringement, unfair competition, false advertising, and direct and contributory trademark dilution, on the grounds that eBay facilitated and allowed these counterfeit items to be sold on its website.

Tiffany acknowledges  [**2] that individual sellers, rather than eBay, are responsible for listing and selling counterfeit Tiffany items. Nevertheless, Tiffany argues that eBay was on notice that a problem existed and accordingly, that eBay had the obligation to investigate and control the illegal activities of these sellers -- specifically, by preemptively refusing to post any listing offering five or more Tiffany items and by immediately suspending sellers upon learning of Tiffany's belief that the seller had engaged in potentially infringing activity. In response, eBay contends that it is Tiffany's burden, not eBay's, to monitor the eBay website for counterfeits and to bring counterfeits to eBay's attention. eBay claims that in practice, when potentially infringing listings were reported to eBay, eBay immediately removed the offending listings. It is clear that Tiffany and eBay alike have an interest in eliminating counterfeit Tiffany merchandise from eBay -- Tiffany to protect its famous brand name, and eBay to preserve the reputation of its website as a safe place to do business. Accordingly, the heart of this dispute is not whether counterfeit Tiffany jewelry should flourish on eBay, but rather, who should  [**3] bear the burden of policing Tiffany's valuable trademarks in Internet commerce.

Having held a bench trial in this action, the Court issues the following Findings of Fact and Conclusions of Law, as required by Rule 52(a) of the Federal Rules of Civil Procedure. Specifically, after carefully considering the evidence introduced at trial, the arguments of counsel, and the law pertaining to this matter, the Court concludes that Tiffany has failed to carry its burden with respect to each claim alleged in the complaint. First, the Court finds that eBay's use of Tiffany's trademarks in its advertising, on its homepage, and in sponsored links purchased through Yahoo! and Google, is a protected, nominative fair use of the marks.

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576 F. Supp. 2d 463 *; 2008 U.S. Dist. LEXIS 53359 **; 2008-1 Trade Cas. (CCH) P76,219

TIFFANY (NJ) INC. AND TIFFANY AND COMPANY, Plaintiffs, VERSUS EBAY, INC., Defendant.

Subsequent History: Affirmed in part and remanded in part by Tiffany Inc. v. eBay, Inc., 600 F.3d 93, 2010 U.S. App. LEXIS 6735 (2d Cir., Apr. 1, 2010)

Prior History: Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 460, 2007 U.S. Dist. LEXIS 85367 (S.D.N.Y., 2007)

Disposition:  The jeweler failed to satisfy its burden on all of its claims and judgment was entered in favor of the marketplace.

CORE TERMS

eBay, listings, infringing, sellers, counterfeit, website, trademark, jewelry, contributory, trademark infringement, dilution, Marks, merchandise, advertising, Buying, Programs, silver, buyers, user, sponsored, reason to know, links, authentic, Lanham Act, suspended, fair use, sales, nominative, products, rights

Business & Corporate Compliance, Causes of Action Involving Trademarks, Infringement Actions, Determinations, Trademark Law, Registration Procedures, Federal Registration, Federal Registration as Evidence, Burdens of Proof, Federal Unfair Competition Law, Lanham Act, Scope, Defenses to Incontestability, Fair Use, Reference Fair Use, Nominative Fair Use, General Overview, Civil Procedure, Justiciability, Mootness, Voluntary Cessation Exception, Constitutional Law, Case or Controversy, Contributory Infringement, Copyright Law, Civil Infringement Actions, Online Infringement, Trademark Cancellation & Establishment, False Designation of Origin, Likelihood of Confusion, Consumer Confusion, Unfair Competition, False Advertising, Elements of False Advertising, Dilution of Famous Marks, Factors for Determining Dilution, Federal Trademark Dilution Act, State Antidilution Statutes, Types of Dilution, Blurring, Tarnishment