Tiffany Gets a Boost in eBay Case by IACC Amicus Brief

*The image is courtesy of Robert Caplin/Bloomberg News*

Tiffany & Co. has filed an appeal with the United Court of Appeals of the Second Circuit in its bid to prevent eBay from selling counterfeit goods on their website that bear the Tiffany trademark. Tiffany had lost this lawsuit in the lower court.

In an amicus brief submitted by the IACC (International Anti Counterfeiting Coalition) recently, eBay's contributory liability is put forth as a reason to overturn the lower court's ruling. eBay was put on notice of the presence of counterfeits by Tiffany & Co. since 2003. The IACC contends that when a marketplace operator becomes aware of the presence of widespread counterfeits in its marketplace, it has a responsibility to stop these transactions and also stop providing services to those responsible for such transactions.

"Robert Barchiesi, President of the IACC said, 'Counterfeiting is a criminal activity carried out on global scale and, with eBay turning a blind eye, broadly on the Internet. In fact, eBay is estimated to provide the forum for 29 percent of the entire online counterfeit market, which has widespread public health and safety hazards, as well as causing substantial economic harm to legitimate business. Therefore, we need to take vigilant action to prevent it.

It is not acceptable that today eBay still tolerates blatant counterfeits being sold on its website. The lower court's ruling in Tiffany's suit against eBay, if left to stand, would result in consumers continuing to be victimized, and place an impossibly onerous burden on trademark owners to police the eBay site on their own. Our brief asks the Court to recognize both eBay's contributory and direct liability as well as the pressing need to take action to protect consumers'" (http://www.marketwatch.com/news/story/international-anti-counterfeiting-coalition-iacc/story.aspx?guid=%7B4E0C060D-E5AA-43C0-8A49-961CE2CF6A39%7D&dist=hppr).

I must say that I agree. Since eBay is such a large online marketplace, it would place an undue burden on trademark holders to go around trying to catch every counterfeit item that is placed on the market. This would be impractical and nearly impossible for smaller companies that hold trademarks.

However, it is also placing an undue burden on eBay to require them to track every merchant that posts an item for sale. Since eBay uses a business model that leaves them as an uninvolved third party in the transaction, it is hard to figure out who can be held responsible (besides the individual actually selling the counterfeit item). It will be interesting to see if this amicus brief helps out Tiffany & Co. in its appeal. More on this case in the next few months.