EBay scores landmark victory in Tiffany counterfeit case

Ebay has landed a legal victory with the dismissal of a lawsuit that accused the auctioneer of deceiving customers by allowing the sale of counterfeit Tiffany jewellery.

A Manhattan district judge rejected Tiffany’s allegation that eBay engaged in false advertising, the last remaining claim after a federal appeals court dismissed the rest of Tiffany’s trademark infringement case earlier this year.

The case was seen as a challenge to internet companies such as eBay, Google and other web-based marketplaces that host services for other vendors, but do not take responsibility for partner trademark violations.

Tiffany failed to establish that eBay intentionally set out to deceive the public

“Tiffany failed to establish that eBay intentionally set out to deceive the public, much less that eBay’s conduct was of an egregious nature sufficient to create a presumption that consumers were being deceived,” the judge, Richard Sullivan, wrote.

A Tiffany spokesman, declined to comment, while Michelle Fang, eBay’s associate general counsel, called the ruling “an unequivocal validation of eBay’s business practices”.

Tiffany accused eBay of advertising the sale of its goods through ads on its website, and through sponsored links on search engines, which would sometimes link to its own website and exhort readers to “Find Tiffany items at low prices.”

Sullivan agreed with Tiffany that eBay knew “a portion” of the goods being sold were fake, but he said Tiffany failed to show that eBay’s advertisements misled customers or necessarily implied that all Tiffany products sold on its website were genuine.

“Tiffany has failed to present evidence that rises to the high level of egregious misconduct required to demonstrate that eBay had an intent to deceive customers,” he wrote.

Sullivan also pointed to eBay efforts to fight fraud, which the company has said costs up to $20 million a year.

In the earlier legal action, judges dismissed most of Tiffany’s lawsuit, saying that “eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did”.