By George Anderson
A suit brought by Tiffany & Co. against eBay alleging it failed to take adequate steps to ensure counterfeit goods were not sold on its site could have profound impact on how the online marketplace conducts business if the jeweler wins the case.
Joseph Berghammer, an intellectual property attorney with the firm of Banner & Witcoff Ltd., told TechWeb News, "If Tiffany wins, this is a ground-breaking case. It changes the electronic marketplace. EBay would no longer just provide a tent, it would also have to provide police."
Tiffany claims that in 2003 and 2004 it got eBay to remove more than 19,000 counterfeit items being passed off as its own.
Ebay argues that it cannot be held responsible for every item being auctioned through its site.
Ina Steiner, editor and publisher of AuctionBytes.com, said it's possible that, even if the court does not side with Tiffany, major changes may be coming eBay's way through new legislation enacted by lawmakers.
"It really may come down to lawmakers getting involved if consumers feel they are not being protected in the marketplace," he said. "Ebay may have regulation thrust upon them."
EBay spokesperson Hani Durzy said the company continues to cooperate with Tiffany but, ultimately, it is the responsibility of brand manufacturers to protect their trademarks. "(The trademark) owners are the only ones who can truly understand who owns the rights, and what is fake and what is real," Durzy said.
James Swire, lead attorney for Tiffany and a partner in the law firm Arnold & Porter, said eBay is looking to have its cake and eat it, too.
He argues that eBay advertised the availability of Tiffany items on its home page and sponsored links on search engine web sites. Many of the items eBay was promoting turned out to be fakes.
Mr. Swire argues that about three out of every four products identified as a Tiffany item on eBay are fakes and that the auction site is aware of this but has not stepped in to address the fraudulent behavior.
Moderator's Comment: Should online auction sites be responsible for the goods sold through their service? What would a Tiffany victory in court mean for eBay and other similar sites serving consumer and business markets? - George Anderson - Moderator