Tiffany/eBay Dispute and the "Innocent Middleman" Defence

Tiffany & Co, the luxury jewelry company, recently filed suit in US District Court against eBay Inc, the online auction company, alleging that eBay had assisted in diluting the TIFFANY brand by allowing fake items to be sold on its web site. Tiffany claimed that eBay has profited from the sale of counterfeit products and demanded an accounting of profits. It also wants eBay to stop listing any TIFFANY product that is known to be counterfeit. According to Tiffany, 73% of the jewelry sold on eBay this year was counterfeit and only 5% of the items sold were real. The remaining 22% consisted of goods which were advertised by the sellers as being "Tiffany-like". In the past, eBay has raised the "innocent middleman" defence in response to these types of claims and has asserted that it merely provides a means of connecting buyers and sellers and that it is not a merchant. As a result, it says, it cannot verify the authenticity of all the products being sold on its web site. However, eBay maintains that it tries to work closely with trade-mark owners to prevent counterfeit sales. For example, under its Verified Rights Owners' program (VeRO), eBay claims that it will remove fake goods when notified by the trade-mark owner. Under the VeRO program, over 19,000 auctions of "so-called TIFFANY" products have been stopped. The lawsuit raises interesting questions about who should bear the burden of policing online auctions, the trade-mark owners of the goods being sold, or the auction company itself. For further information, visit: http://makeashorterlink.com/?X2F121A49. Summary by: Hung Nguyen