In 2004, Tiffany sued eBay for trademark infringement, claiming the online auctioneer failed to prevent the sale of fake Tiffany jewelry on its site. But according to the ruling, it’s up to the brand owners to protect their trademarks as eBay is only required to remove fraudulent listings after being notified about specific instances of infringement. The auction giant escaped liability because it actually has a counterfeit reporting and enforcement system in place, and it removed auctions for Tiffany’s counterfeited goods when notified by the jeweler.
This is an important legal victory for eBay, indeed, as a loss would probably trigger similar suits and force it to verify the authenticity of millions of items posted for sale. It is also a sharp departure from the legal opinions against eBay from European courts in recent weeks, when a French judge ordered eBay to pay a hefty $63 million fine for failing to police its website for counterfeit products by Louis Vuitton.