eBay's Online Trademark Victory over Tiffany July 16, 2008 By Solveig Singleton
A federal court opinion in an online trademark case could have interesting implications for websites' and online services' responsibilities toward their users' copyright infringements, including the use of filters that screen out unauthorized copyrighted works. The jewelry retailer Tiffany & Co. sued eBay, arguing that the online auction site did not do enough to prevent auctions of counterfeit Tiffany’s goods. On Monday, New York federal district Judge Richard Sullivan ruled that eBay’s anti-counterfeiting efforts were enough to avoid liability under trademark law.
At issue in this case was the question of just how much responsibility eBay need take for policing auctions of counterfeit Tiffany’s goods. eBay had taken down every listing brought to its attention by Tiffany under its Verified Rights Owner (VeRO) program and suspended accounts of repeat offenders. In addition, it had used new technologies to delay the appearance of listings of purported Tiffany items, identify suspicious sellers, and deploy other filters. Tiffany argued that eBay ought to have done this sooner, or ought to take further steps, such as barring suspect auctions before the public had a chance to see them, or barring any listing of more than five Tiffany’s items.
Along the way, Judge Sullivan ruled on several key trademark issues in an online context. He held that eBay’s use of the term “Tiffany” in ads was not a direct trademark violation. The law allowed eBay’s fair use of the Tiffany name to describe goods generally available on the site in ads, keywords, and metatags. The judge emphasized that alternatives to the use of the mark would not work well: “describing it as ‘silver jewelry from a prestigious New York company where Audrey Hepburn once liked to breakfast,’ . . . would be both impractical and ineffectual in identifying the type of silver jewelry available on eBay.” The narrow interpretation of trademark here stops trademark owners from using trademark law to eliminate a resale market for their products. And the judge found the use of the Tiffany name did not confuse consumers.
The judge also rejected contributory trademark infringement claims. Judge Sullivan rejected a theory of contributory infringement based on eBay’s failure to act when it "could reasonably anticipate" infringement, noting that this was not the law. He agreed with Tiffany that eBay had sufficient control over the listings to support liability, evidenced by their gun sale ban, its active promotion of Tiffany’s items, its profits from the listing of items, and various seller support features. EBay was more like a flea market than a classified ad service, the court found.
But the judge also found that eBay’s general knowledge that counterfeits were sold was not enough to support liability. More specific knowledge or willful blindness was required. In the instances in which eBay did have more specific knowledge of an infringing auction, the Court found that eBay took appropriate steps to deprive the seller of its platform, “both by removing the infringing listing and by eventually suspending the seller.” As “eBay consistently took steps to improve its technology and develop anti-fraud measures as such measures became technologically feasible and reasonably available,” Tiffany lost on the contributory infringement count as well as others.
Some have described the case as broadly affirming that policing misuse is the responsibility of the intellectual property owner, not the responsibility of online distributors. One law professor notes that this “This ruling would put the responsibility on people who post on eBay, rather than on eBay." And in the big picture, this is undoubtedly the law.
Champions of YouTube or other online content sites might want to see this case as support for the broad argument that policing copyright is the copyright owner’s problem, that it is not the site’s job to filter or otherwise police content (setting aside other differences between copyright and trademark law, and between eBay and YouTube).
But the real question in Tiffany v. Ebay was whether eBay needed to take ultimate or almost total responsibility—not whether it need take any responsibility. In short, the case is important not because it dismisses the idea of a distributor’s responsibility, but because it helps determine how far the distributor need go.
Solveig Singleton is a lawyer, an adjunct with the Convergence Law Institute and an adjunct fellow with the Institute for Policy Innovation.
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