Judge: eBay not responsible for counterfeit goods on its site

Posted Jul 15th 2008 4:03PM by Melly Alazraki
Filed under: Law, Google (GOOG), eBay (EBAY), Viacom (VIA), Tiffany and Co (TIF)

After four years, a federal judge has finally ruled in the counterfeit goods case in which Tiffany & Co. (NYSE: TIF) sued eBay Inc. (NASDAQ: EBAY), demanding it create better polices on its auction site and assume responsibility for the goods traded there.

But the judge ruled in favor of eBay, saying that "the law is clear: it is the trademark owner's burden to police its mark. [...] Tiffany must ultimately bear the burden of protecting its trademark."

No doubt, this is a significant victory for eBay and all online retailers that, while agreeing to take fake merchandise off their sites, want to be alerted to it by the owners of the trademarks. This means e-tailers don't need to police their sites for counterfeit goods, something that would have been quite costly.

If this sounds a little odd to you, maybe that's because of a recent suit regarding copyrighted material on Google Inc. (NASDAQ: GOOG)'s YouTube. Viacom Inc. (NYSE: VIA) has sued the owner of the video sharing site for $1 billion in damages, accusing YouTube of enabling copyright infringement since users upload copyrighted material to the site.

Obviously, there are a differences between trademarked goods and copyrighted material, especially in the eyes of the law, but the law actually seems a little fuzzy in both cases. For example, already in France the judgment was the opposite in a similar case against eBay brought on by LVMH, the firm behind the Louis Vuitton and Christian Dior brands. Or, when it comes to the internet and copyrights, there's the Digital Millennium Copyright Act Google is using in its defense, which "In general, limits Internet service providers from copyright infringement liability for simply transmitting information over the Internet."

It seems much clearer messages need to come from the legislature on these matters, or perhaps with time, the precedents will make it so. For now, eBay has escaped from costly policing, while Google is still biding its time.

Tags: Digital Millenium Copyright Act, DigitalMilleniumCopyrightAct, ebay, goog, google, inthenews, lvmh, tif, tiffany, via, viacom, youtube

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Reader Comments (Page 1 of 1)

7-15-2008 @ 8:03PM

Preypal Problems said...

Paypal, who is owned by ebay, is DIRECTLY responsible for having counterfeit items on their site. When they get a claim from a buyer that their item is counterfeit, they are told to mail the item to the following address, to be "DESTROYED".

Paypal Returns
12750 Perimeter Drive Suite 154
Dallas TX 75228

That address, belongs to Liquidity Services Inc. LSI is a Business Surplus Reseller. Liquidity Services Inc., is NOT an authenticater, nor do they have a "destroying" dept.

So, Ebay is taking ownership of these counterfeit items and then they are having Liquidation.com (Owned by LSI) resell them on their own site as AUTHENTIC items, when ebay knows they are fake. Liquidation.com auctions are AS IS, so people can not get their money back, once they find out they've been duped.

And what is worse, here is what Paypal has said: "'Because of its reliability with online resellers, Liquidity Services is ranked as Paypal's #1 bulk source for inventory"

Paypal/Ebay promotes this site all over the place, so you know that ebay sellers are buying those lots, with the fake purses and putting them right back on ebay and many may not even know that it was fake, because it was advertised as real.

PAYPAL IS IN VERY DEEP!

7-16-2008 @ 8:44AM

Kate said...

We've bought items through Liquidation.com and found it a nightmare. Only part of the product we purchased showed up upon delivery. Liquidation.com states in it's polices you cannot file a dispute with your credit card company if you are shorted on your order. You have to go through their process of verifying a shortage, however our order was supposed to have been verified by Liquidation.com to begin with. I called my credit card company and they said we could absolutely contest the charges when an order is shorted. Our experience with Liquidation.com was not good and we won't be going back. I'm not surprised eBay is peddling the fake ware back online through another avenue. However, if they are claiming to destroy product, that product MUST be destroyed, not resold. I'd foreward that information on to the Attorney General's Office for review. PayPal cannot state they are destroying product when they are in truth reselling product, knowing it is fake goods. If Liquidation. com is knowly purchasing fake goods and reselling those goods as authentic products, the Attorney General's Office needs to be alerted as well. Bad business all the way around.

7-19-2008 @ 2:40AM