eBay took measures to cut
down on the sale of counterfeit goods. However, Tiffany felt that the measures
did not go far enough and demanded that eBay discontinue all Tiffany auctions
on its site. eBay refused. The Second Circuit in Tiffany Inc. v. eBay, Inc., 600 F.3d 93
(2d Cir. N.Y. 2010) took a fresh look at these issues. In this
Analysis, Steve Abreu, of Sunstein Kann Murphy & Timbers, discusses Tiffany
and internet sales of counterfeit goods. He writes:
appeal, in Tiffany (NJ) and Tiffany & Co, v. eBay, Inc., 600 F.3d
93, 94 U.S.P.Q.2d (BNA) 1188 (2d Cir. NY 2010), the Second Circuit took a fresh
look, starting with the claim that eBay's use of TIFFANY and other marks in the
auction listing was direct trademark infringement because consumers were likely
to be confused as to the origin of the goods. The court stated the general rule
that trademark law does not reach the sale of genuine goods bearing a true mark
even though the mark owner does not authorize the sale.
the court held that the defense of nominative fair use 1 applied when eBay used
Tiffany's mark on its website, and in sponsored link advertising, to refer to
the Tiffany goods it had on sale and accurately describe them. Finally, the
district court reminded Tiffany that it cannot control the "legitimate
secondary market in authentic Tiffany silver jewelry."
court found more difficulty in determining whether eBay had committed
"contributory trademark infringement," a tort that entitles the
victim to damages. A service provider such as eBay can be found liable for
contributory infringement if it (1) exercises sufficient control over the
infringing conduct, and (2) intentionally induces another to infringe a
trademark or continues to supply its services to one who it knows or has reason
to know is engaging in trademark infringement.
appeals court found that eBay did exercise sufficient control over the means of
the infringing conduct but that it did not intentionally induce infringement.
The remaining issue was whether eBay continued to accommodate sellers of
counterfeit goods who it had reason to know were auctioning counterfeit Tiffany
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