In the 2004 counterfeit goods lawsuit brought against online auction giant eBay (EBAY) by Tiffany & Co. (TIF), a New York appeals court has ruled in favor of eBay. The suit stemmed from an independent investigation conducted by Tiffany, where an investigatory sampling determined that more than 70% of supposed Tiffany items on eBay were found to be fakes. Tiffany maintains that eBay bears responsibility for cleaning out those counterfeit items.

Yes, eBay bears some responsibility in this matter, but that responsibility begins and ends at the removal of offending listings when they are reported or discovered. Any random examination of listings by eBay for potential rule violations or illegal activities falls under the heading of good faith, not due diligence.

Every so often, when time and the environment take their toll, my wife goes shopping for a new purse. Although she avoids heavily labeled items, she is occasionally tempted by the rows of fake Prada, Louis Vuitton, and Gucci purses offered by our local sidewalk-based merchant. While designers might disagree, my wife (like many others) sees cheap bags as a harmless bit of fun, a little bit of playful fake prestige that she can pick up for less than the price of a steak.

Last year, however, a Canadian con artist was accused of expanding the repertoire of imitation Guccis, offering fake stock options in the the Gucci Group. Claiming that he was a member of the Gucci board and was tasked with creating an influx of cash, Timothy Khan sold over $7 million in nonexistent Gucci stock in 1995. By 1996, the investor who had purchased the counterfeit stock was demanding that Khan sell it. Offering a variety of excuses, backed up by a variety of seemingly official documents, Khan held on to the investor's money for a further eleven years. On March 19, Khan pled guilty to two counts of securities fraud and wire fraud. Each count carries a maximum sentence of twenty years in jail, and Khan's sentencing is set for June and will be held in Manhattan federal court.

Suddenly, a $20 knockoff purse doesn't seem like such a big deal!

As reported on Auctionbytes, eBay Inc. (NASDAQ:EBAY) recently announced an initiative to thwart the listing of counterfeit goods on its auction site. The program will be targeted at a tiny selected group of particular product names. Most probably in reaction to pending litigation by companies such as Louis Vuitton and Christian Dior Couture, this move seems to be a bit of oil targeted at a few squeaky wheels.

The details of the program are obtuse and ill-defined, but in part, the initiative involves a smattering of criteria which when encountered will trigger a red flag and expose a seller to manual inspection of their item listings. Included in the program are new restrictions against the listing of certain items from the countries of China and Hong Kong. While on its face this program seems helpful and reasonable, overall it is an unimpressive effort according to sources who have contacted this writer.

"What an unmitigated load of bull----!" , was the response I received from one associate. She sees this program as nothing more than another stopgap PR play reflective of the same type of flimsy "solution" eBay employed to quiet the Skype overloading of servers issue. In part, the concern is that while this program may indeed reduce the number of attempts to sell a few counterfeit copies of a few specific items, it will do nothing to pursue or prosecute those who are habitually engaged in practices of illegal merchandising on eBay's site.