Legal News

Court: It?s Up to You, Tiffany, to Keep the Counterfeiters Away

By Dan Slater

Our unintentional spotlight on international law continues today at the LB.

But first, let us return briefly to New York, where U.S. District Judge Richard Sullivan has ruled that Tiffany, not eBay, must bear the burden of monitoring its trademark, including that lovely Tiffany Blue box, which helps us all aspire to a higher standard.

Here’s the opinion.

Now, back to France: The ruling has got to be a relief for eBay. On Friday, a French court upheld a June 30 ruling that eBay pay LVMH Moët Hennessy Louis Vuitton and sister company Christian Dior $63.1 million in damages for auctioning fake goods. LVMH had accused eBay of not taking the necessary steps to ensure that the accessories sold on its site weren’t counterfeit.

But the Tiffany suit, according to this early report from the WSJ, was the first case brought against eBay by a luxury goods maker in the U.S.

A trio of models waits for ceremonies to begin at the opening of Tiffany’s Wall Street store, Oct. 10, 2007. (AP Photo/Richard Drew)

At trial, Tiffany’s legal team, led by Arnold & Porter’s James Swire, tried to argue that eBay was aware of the widespread counterfeit problem on its marketplace, and as a result, bore the legal burden to put procedures into place to screen out all potential counterfeiters, similar to the way it prevents the sale of drugs or guns.

But eBay responded by arguing that it has no direct control over the means of infringement, and that it’s more like an Online classifieds ad service than a flea market. Since eBay doesn’t take possession of the items sold on its site, it can’t inspect them prior to sale. Judge Sullivan thought that was persuasive, ruling that the burden of keeping the counterfeiters at bay rests with Tiffany.

“While today’s decision is a victory for consumer choice,” said Nichola Sharpe, an eBay spokeswoman, “it is a shame that so much effort has been wasted when Tiffany could have worked with eBay to more effectively fight counterfeits.”

Full post as published by Law Blog - WSJ.com on July 14, 2008 (boomark / email).