Judge: eBay not responsible for counterfeits.
The city of New York should be letting out a big sigh of relief right about now. On Monday, a federal judge cleared online auction site eBay from any wrongdoing in a trademark infringement lawsuit filed by upscale jeweler Tiffany & Co.
I bring New York into this because I was always amazed at how freely knock-off merchandise – everything from bootleg DVDs to fake Louis Vuitton purses – are sold on the streets of the Big Apple. Sure, NYPD Blue comes strolling through Battery Park or Chinatown and the vendors close up shop – until the officers are out of sight. It’s a little game of cat-and-mouse, I suppose. The vendors pretend not to be selling the merchandise and the cops pretend they don’t know what’s going on.
eBay makes a valid argument: the sheer volume of sellers and buyers on eBay makes it hard for the auction site to determine which products are legitimate and which ones aren’t. And, eBay said, Tiffany didn’t adequately participate in eBay’s programs to help brand owners prevent fraud. Ultimately, the judge decided, it’s up to the brand owners to protect their trademarks.
I couldn’t help but compare this eBay-Tiffany case to the run-ins between the first Napster and the Recording Industry Association of America back in 2000. Back then, I remember Napster making the argument that it solely provided technology that allowed people to share all files – not just copyright-protected music tracks. But it just so happened that illegal sharing of music is pretty much the only thing that was happening on Napster.
Clearly, that’s not the case of what’s happening on eBay. There are a lot of legitimate transactions happening on eBay today and I’d be willing to bet that the shady ones are only a fraction of the total number of buyer-seller interactions happening online.
The judge was right to clear eBay on this one. As long as there are high-priced items in heavy demand – whether Tiffany earrings, Super Bowl tickets or the newest iPhone – there will always be people out there willing to supply a fake alternative to willing buyers. But it shouldn’t be eBay’s responsibility to police Tiffany’s – or anyone else’s – trademark. Tiffany, like any other brand owner, needs to protect the value of its brand. It’s all part of doing business in the luxury market.
Let the appeals begin.