However, on April 1 the Appeal Court sent back a ruling on eBay’s advertising of Tiffany goods for consideration once more by the district court.
It could mean that eBay will at least have to add a rider to Tiffany adverts, highlighting the common problem of fake goods being offered on their site.
The Appeal Court ruling sets out the complex legal arguments over whether eBay had infringed or damaged the Tiffany trademark and whether or not they were guilty of false advertising.
What is not in dispute is the high level of fake Tiffany goods being offered via eBay – although exact levels are not clear – but eBay’s extensive programme of counter measures clearly impressed the courts in deeming their use of the Tiffany trademark as lawful.
Other factors taken into consideration included eBay’s promotion of Tiffany’s ‘About Me’ page on eBay’s website, alerting potential buyers to the problem with fakes, as well as special messages, introduced in 2003 or 2004, advising sellers to ensure their Tiffany items were genuine and warning them that eBay would not tolerate the sale of fakes.
The Appeal Court agreed with the July 2008 district court ruling that “eBay consistently took steps to improve its technology and develop anti-fraud measures as such measures became technologically feasible and reasonably available”.
Tiffany had hoped to show that eBay had infringed their trademark by promoting sales of Tiffany items on the eBay website, knowing there was a substantial problem with fakes. However, again the Appeal Court agreed with the original ruling that eBay could not be held responsible for a generalised knowledge that fakes were being offered, rather than specific knowledge as to which particular sellers were offering fakes.
As for diluting or tarnishing the Tiffany brand, because eBay did not offer Tiffany goods for sale themselves – merely provided the platform for others to do so – or used the Tiffany marks to refer to eBay’s own product, they could not be held liable.
The chink of hope for Tiffany came with the challenge over false advertising. The district court had ruled that the advertisements at issue were not literally false “because authentic Tiffany merchandise is sold on eBay’s website”, even if counterfeit Tiffany products are sold there too. While the Appeal Court agreed with this, it decided that it was unable to rule on whether the advertisements were not “likely to mislead or confuse consumers”.
It sent the case back to the district court for clarification on this point with the advice:
“An online advertiser such as eBay need not cease its advertisements for a kind of goods only because it knows that not all of those goods are authentic. A disclaimer might suffice. But the law prohibits an advertisement that implies that all of the goods offered on a defendant’s website are genuine when in fact, as here, a sizeable proportion of them are not.”
By Ivan Macquisten