Online vendors sell lots of Tiffany goods through eBay. But some of the stuff that some of them hawk never knew the inside of a Tiffany store or warehouse. They do commerce in fake Tiffany, Blawgletter means.
eBay makes money from such sales by charging fees for listing offers and, via its PayPal service, for processing payments.
This week, the Second Circuit pondered whether eBay's role in vending counterfeit Tiffany items ran afoul of trademark and false advertising laws. The panel agreed with eBay that it hadn't infringed Tiffany trademarks, either directly or by way of dilution, due to the fact that eBay didn't know about the fakeness of particular pieces. But it also held that Tiffany might have a point about eBay's own ads, which urged people to check out its sellers' "Tiffany" offerings. "The law requires us to hold eBay accountable for the words that it chose insofar as they misled or confused consumers." Tiffany (NJ) Inc. v. eBay Inc., No. 08-3947, slip op. at 43 (2d Cir. Mar. 30, 2010).
Tiffany feels unhappy about the result. It said:
"Obviously Tiffany is very disappointed by today's decision. As an e-commerce leader, eBay has a responsibility to protect consumers and promote trust in its marketplace," said Michael J. Kowalski, chairman and chief executive officer of Tiffany & Co. "eBay knew that counterfeit merchandise was being sold on its site – and eBay took no effective steps to stop it. eBay deliberately misled consumers for profit, and unfortunately, the court has justified its actions. The consumer is the real loser today."