Tiffany Still Confused About How Liability Works; Appeals eBay Decision

from the let's-try-this-again dept

Last month a US court correctly pointed out that eBay was not liable for counterfeit products showing up on the auction site. That doesn't mean that it's legal to sell counterfeit products, just that eBay isn't liable for the counterfeits showing up there. Instead, it should be the person who actually lists the item that's liable. That makes perfect common sense. Except to Tiffany, apparently.

The company is now appealing the ruling, making some bizarre arguments in its own defense:
"If one were a flea market operator and you become aware that counterfeiting is going on with the individual sellers at the flea market, you have a duty to investigate it. Why is eBay any different from that analogy?"
Well, two things, actually. First, it's the individual seller in that situation that's liable, not the flea market operator, and much more importantly, eBay is quite different than a typical flea market in that it doesn't pre-vet any of the sellers. A traditional flea market involves the flea market operator finding sellers. eBay is just a platform where anyone can sell. That is, eBay has simply no knowledge of what anyone is selling on the site -- nor should it be required to. The law is pretty clear on this, so it's not at all clear what Tiffany thinks it's going to accomplish here other than to waste a lot of money on lawyers who seem to be giving the company really bad advice.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    MLS, Aug 11th, 2008 @ 9:36pm

    Personally, I find it much more useful and informative to read a brief versus relying on select quotes contained in a news account.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Anonymous Coward, Aug 11th, 2008 @ 10:07pm

    Lawyers

    Who says it's the lawyers' fault? Maybe they told Tiffany "No, you can't do that" and Tiffany insisted. It's not like they could just refuse.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    wasnt me!, Aug 11th, 2008 @ 10:09pm

    i agree with opinion of this thread, but since no one is disputing that counterfeits are legal isn't eBay required to stop those trades when its made aware of them and either ban the sellers or MAYBE transmit there details to authority?

     

    reply to this | link to this | view in thread ]

  4.  
    icon
    Mike (profile), Aug 11th, 2008 @ 10:27pm

    Re:

    but since no one is disputing that counterfeits are legal isn't eBay required to stop those trades when its made aware of them and either ban the sellers or MAYBE transmit there details to authority?

    That's not what the lawsuit is about. eBay already does that -- when made aware of the counterfeits.

    What Tiffany is claiming is that eBay should police those sales even if it's not made aware of counterfeits. In other words, Tiffany is saying that it's eBay's responsibility to make sure all goods sold are legit, even though eBay has no pre-screening process.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Cowherd, Aug 11th, 2008 @ 10:29pm

    Mall

    eBay is less like a flea market operator than it is like a developer that owns a shopping mall. If someone rents a space in the mall and sets up a store or kiosk there, then proceeds to sell trademark-infringing goods, is the mall's owner liable?

    According to http://www.bcrelinks.com/articles/lm2.htm the answer is "no" in most sane jurisdictions, unless the owner is involved in some way in the infringing business beyond just charging them rent; for example, actively aiding the concealment of infringing activity.

    That hasn't stopped trademark holders from going after deep pocketed landlords, though, in a manner analogous to Tiffany suing eBay. :P

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    wasnt me!, Aug 11th, 2008 @ 11:38pm

    Re: Re:

    what i meant to say is as long as eBay is doing its part tiffany can go F*** it self.

    sry if double post: but the way i see it its just another form of safe harbour.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Anonymous Coward, Aug 12th, 2008 @ 1:17am

    fleaBay

    I worked for a company that used hundreds of fake eBay users to pump their product's bids. While there it seemed to me that eBay turned a blind eye since they still made money on the sale. So as long as the company wasn't claiming no-sale on all the items they were getting away with it.

    Based on that eBay has very little integrity to me. I wonder how many items are reported as suspect that still end up being sold and making eBay money. Perhaps more responsibility should be placed on eBay to police the commerce taking place on their site.

    They're more akin to a pawn shop - people are using their store front to sell their goods, legit or not.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Jake, Aug 12th, 2008 @ 1:22am

    Re:

    "...even though eBay has no pre-screening process."

    Well, maybe something like one might not be such a bad idea, and not just to stave off lawsuits. Counterfeit goods and similar scams often only get reported after someone gets fleeced out of their cash, and fairly or unfairly, it reflects on eBay's reputation; becoming widely regarded as being overrun by scammers is going to cost them a lot of business. Going wholly by some of the comments on previous eBay-related articles, a purely reactive approach to enforcing their terms and conditions isn't cutting it any longer.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Evan, Aug 12th, 2008 @ 3:06am

    If you ask me...

    The age of eBay has long been dead. I've only used eBay maybe a handful of times in my life, and have found it to be nothing but a hassle.

    Regarding this issue, however - eBay, like any site, takes no liability for what its users post. As much as I'm not a fan, Tiffany is wrong, here. Even the flea market analogy made by Tiffany is wrong.

    My mother and sisters like to go to flea markets to get great deals on "designer" handbags and clothing. Dolce and Gabbana bags for $5? They'll take 'em!

    So, you see, flea market operators really don't care, either.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Anonymous Coward, Aug 12th, 2008 @ 4:34am

    ebay dug their own hole

    You repeatedly state that ebay shouldn't be liable for counterfeits on the site, but it is ebay that created the environment that makes them liable. They set a precedent years ago by pulling auctions from the site that did not comply with certain laws...that was their first mistake.

    By doing so, they admitted that they were liable for those listings, or at least aware of them and their illegality. ...and chose to take some responsibility for policing the site against such listings. Then they began restricting what could and couldn't be listed in certain states and countries based on national and state laws...another step in implicating themselves in all future cases of illegal listings.

    Then the restrictions came, as did the removal of listings, based on obviously counterfeit or fraudulent listings. Then came the restrictions and filters based solely on certain keywords (ie. Tiffany etc.) that prevented some sellers from even listing the items for sale on ebay.

    ebay's ineffective, and often prejudicial, VERO program only adds to the acknowledgment by ebay that their site is used by criminals, counterfeiters, and copyright violators.

    Knowing your site, property, business etc. is used as a place to conduct illegal activity may not in itself necessarily imply liability. But, eBay actions to try and prevent the crimes on the site certainly starts to imply that they are liable. Add the fact that ebay continues to make tens of millions of dollars from counterfeit listings, Paypal scams, and other rip-offs and suddenly they look a whole lot liable.

    If ebay had maintained their self described "venue" status from the beginning, these lawsuits would have no traction. But eBay did not, instead they chose to try to regulate hundreds of millions of listings by tens of millions of sellers. ebay should lose every lawsuit like this for their sheer stupidity and complete lack of foresight.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Jim, Aug 12th, 2008 @ 5:30am

    Re: Re:

    Maybe it would be a good idea for eBay to put a vetting process in place. "A good idea" and "mandated by law" are two entirely different things however.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Benjie, Aug 12th, 2008 @ 5:30am

    Robbed

    Mr. Judge, sir. I was robbed by a pickpocketer in the United States. I would like to sue the government because they provided the space which allowed this to happen. If the United states never existed, I would have never been robbed in 'the United States';..... I would've been robbed in Mexico or somewhere else because I'm stupid.

     

    reply to this | link to this | view in thread ]

  13.  
    icon
    David (profile), Aug 12th, 2008 @ 5:41am

    Re: ebay dug their own hole

    So what you're saying is, if a on-line auction operator, or any website that allows user interaction for that matter, sets up the site and takes a completely hands-off approach then that's OK ...

    ... but if they try to make their website a better place by at least filtering out the low hanging fruit of dodgy content, then they immediately become liable for anything else that slips through the net?

    That's nonsense - there's no such thing as a perfect filter, so your approach would see every website operator turning a blind eye to any and all criminal activity occurring on their site.

    A website operator shouldn't be liable for criminal activity being perpertrated by the site's users, but at the same time they shouldn't become liable the instant they try to curtail such activities!

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Anonymous Coward, Aug 12th, 2008 @ 5:56am

    Lawyers . . .

    This is one of the more clearcut cases of a lawfirm picking the pockets of one of its larger and dumber clients. Its really kinda fun to watch.

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    ehrichweiss, Aug 12th, 2008 @ 6:31am

    Re: Re:

    Yeah, because the fleabay fees aren't high enough already, huh.

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    Sam, Aug 12th, 2008 @ 6:36am

    I think the issue is the blatant use of the term "Tiffany" and the claims of being new and genuine. Certainly if you have an old necklace or something to sell (stolen or not ;) )
    that is one thing but when a seller sets up shop selling fakes that are "new" and genuine the burden of proof should be on eBay for allowing the listing. Same with the listing with the word "sterling" only silver stamped with the word "sterling" can be "sterling" and yet there are hundreds of listings that use the word as a keyword to draw in unsuspecting buyers. Buyer beware? Yes there should be a warning on eBay that it's a Sleaze mart. "Everything is fake unless proven otherwise". I think that's what Tiffany should be going after. I use Ebay and it's the biggest sleaze mart in the universe. Some good sellers and a bunch of crooks for the rest. You should see some of the stuff my mom buys because she does not understand most everyone selling on eBay are thieves in one way or another.

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Xanthir, FCD, Aug 12th, 2008 @ 6:46am

    Re: ebay dug their own hole

    You repeatedly state that ebay shouldn't be liable for counterfeits on the site, but it is ebay that created the environment that makes them liable. They set a precedent years ago by pulling auctions from the site that did not comply with certain laws...that was their first mistake.

    By doing so, they admitted that they were liable for those listings, or at least aware of them and their illegality. ...and chose to take some responsibility for policing the site against such listings. Then they began restricting what could and couldn't be listed in certain states and countries based on national and state laws...another step in implicating themselves in all future cases of illegal listings.

    Did you actually read the post? Yes, Ebay filters out counterfeit stuff when it's brought to their attention, as they are legally required to do. Tiffany's is trying to make Ebay liable for the counterfeiting before anybody reports it.

    Knowing your site, property, business etc. is used as a place to conduct illegal activity may not in itself necessarily imply liability. But, eBay actions to try and prevent the crimes on the site certainly starts to imply that they are liable. Add the fact that ebay continues to make tens of millions of dollars from counterfeit listings, Paypal scams, and other rip-offs and suddenly they look a whole lot liable.

    I'm just curious at this point. Do you think Ebay should refund the listing money, etc. to counterfeiters when they pull down their listings?

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Sierra Night Tide, Aug 12th, 2008 @ 6:49am

    counterfeit

    eBay is a waste of time and money. I no longer use them UNLESS it is the only place I can get an item I want or need. That's only after I have spent days looking for the item both online and in person. I am guessing that 75% of everything on eBay is worthless, counterfeit, cheap or are real pieces of art made by individuals who have a day job or a spouse who pays all the bills.

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    Iggy, Aug 12th, 2008 @ 6:56am

    Change 'Tiffany' to 'Viacom' and change 'e-Bay' to 'ISP' and it's a familiar and worn-out story. I bet there's overlap in the idiots governing both companies.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Anonymous Coward, Aug 12th, 2008 @ 7:19am

    Re: Re: ebay dug their own hole

    The best approach would have been a more transparent user ID system from the beginning, or at least one where ebay would have know with 100% certainty who had listed any item. Instead anyone can use virtually any name, address, info etc. and list on ebay at any time.

    A hands-off approach is basically what search engines do. ...and it is exactly why they are not liable for child pornography and why they don't get sued for enabling copyright and trademark infringements. Look at Google, the search is not liable for anything, yet Google is constantly being sued over their Adwords. Why? Because Google has rules in effect over what kind of links can be put into Adwords, but not what anyone can have on a particular website that might be spidered.

    If ebay is unable to police their own site (even to the extent of their own rules / policies / contracts etc.) then they should be held liable for counterfeits and other fraud that results in economic gain for the company. That said, ebay probably shouldn't be liable for the portions of the site (blogs, Kijiji, forums etc.) where there is no profit made and where ebay is not actively acting as police, judge, and jury.

    I agree that it isn't really ebay's fault that scammers and counterfeiters are selling things. I also agree that those responsible for listing those auctions should be prosecuted. But I also believe that ebay needs to be held responsible in some context for the fraud. If ebay were fined the exact amount or more that they make off of those fraudulent auctions, they would have incentive to actually police the site fully, but as it is right now, counterfeits that go unreported and unremoved from the site equals revenue for ebay. See the conflict of interest?

    Finally - ebay has a very weak record of actually reporting violators to local or federal authorities. If they did so on a regular basis, their liability (or the hint thereof) would decrease and their reputation would improve.

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Paul`, Aug 12th, 2008 @ 7:30am

    Re: ebay dug their own hole

    There are laws set up specificity to protect the people who run the platform and eBay do take down infringing auctions when made aware that they are infringing. They aren't in the wrong.

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Xan, Aug 12th, 2008 @ 7:43am

    What about CragisList? Newspapers?

    Are CraigsList and newspapers, etc supposed to police all their listings too? Are we going to have some eBay gestapo running around the world, breaking down doors looking for conterfeit goods? If not how would eBay even know that something advertised as a Tiffany's is fake?

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    dorpass, Aug 12th, 2008 @ 8:23am

    Re: by MLS

    Personally, I find it much more useful and informative to read a brief versus relying on select quotes contained in a news account.

    You must like your food pre-chewed as well.

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    Jake, Aug 12th, 2008 @ 9:00am

    Re:

    "A good idea" and "mandated by law" are two entirely different things however.
    What's your point? It shouldn't need to be mandated by law; surely eBay must realise that a reputation for prolific scammers on their lists is costing them revenue?

    Yeah, because the fleabay fees aren't high enough already, huh.
    It wouldn't have to be that expensive; some sort of bot to look out for suspect ads and a few dozen interns to review the results would catch a lot of these scams before anyone got burned, and just as importantly would have great deterrent value.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Thomason, Aug 12th, 2008 @ 9:17am

    Tiff wants it like its California

    Tiffany just wants that 9th Circuit case on contributory infringement, which involved the operator of a flea market, to be applied. They get it.

     

    reply to this | link to this | view in thread ]

  26.  
    icon
    Mike (profile), Aug 12th, 2008 @ 9:47am

    Re: ebay dug their own hole

    You repeatedly state that ebay shouldn't be liable for counterfeits on the site, but it is ebay that created the environment that makes them liable. They set a precedent years ago by pulling auctions from the site that did not comply with certain laws...that was their first mistake.

    The law doesn't say you're suddenly liable if you do some policing. That wouldn't make much sense.

    ebay's ineffective, and often prejudicial, VERO program only adds to the acknowledgment by ebay that their site is used by criminals, counterfeiters, and copyright violators.

    That still doesn't make them liable. Otherwise no one would ever try to help at all. That's the opposite of what the law is trying to do.

    If ebay had maintained their self described "venue" status from the beginning, these lawsuits would have no traction. But eBay did not, instead they chose to try to regulate hundreds of millions of listings by tens of millions of sellers. ebay should lose every lawsuit like this for their sheer stupidity and complete lack of foresight.

    Again, doing some work doesn't mean that you have to police everything.

     

    reply to this | link to this | view in thread ]

  27.  
    icon
    Mike (profile), Aug 12th, 2008 @ 9:50am

    Re:

    that is one thing but when a seller sets up shop selling fakes that are "new" and genuine the burden of proof should be on eBay for allowing the listing.

    Why is the burden on eBay, rather than the person doing the listing? That makes no sense. eBay is just the platform. Is the burden on the automaker if someone speeds? Of course not.

     

    reply to this | link to this | view in thread ]

  28.  
    icon
    Mike (profile), Aug 12th, 2008 @ 9:53am

    Re: Re: Re: ebay dug their own hole

    If ebay is unable to police their own site (even to the extent of their own rules / policies / contracts etc.) then they should be held liable for counterfeits and other fraud that results in economic gain for the company.

    Why? eBay is merely providing the platform. The company itself is not selling the counterfeit goods. The only one liable for that would be the individuals selling the counterfeit goods.

    Finally - ebay has a very weak record of actually reporting violators to local or federal authorities. If they did so on a regular basis, their liability (or the hint thereof) would decrease and their reputation would improve.

    Actually, you should read the original decision in the case, where the judge detailed how much above and beyond eBay goes. The court was impressed that eBay goes well beyond what the law requires, and Tiffany is trying to force them to go even beyond that.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Mr21stcent, Aug 12th, 2008 @ 11:06am

    Ebay/Counterfits

    I am a cheater and have been kicked off by Ebay. You say I deserve it.....NO I do not. I sold watches, key chains and thongs plus, personalized or with logos. I am booted from Ebay while possibly 500 to 1000 other sellers stay on. I check almost every day, using the simplest keyword selection and find them every time. I asked Ebay on many occasions why the discrimination. No reply. If they would police it and booted, I would have no complaints but they refuse to while protecting their favorite sellers. Are they legal? NO.

    PS: I keep selling off my webpage and through other sources. I would love to be back on Ebay but can survive without them.

     

    reply to this | link to this | view in thread ]

  30.  
    identicon
    Izzy, Aug 12th, 2008 @ 11:29am

    Need a volunteer....

    I'll beat the crap out of you with a Tiffany necklace then you can sue Tiffany for selling their necklace to a criminal.

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    MLS, Aug 12th, 2008 @ 1:01pm

    Re: Re: by MLS

    "Pre-chewed" is what happens when one allows someone else to think for them. It is intellectual laziness personified.

     

    reply to this | link to this | view in thread ]

  32.  
    identicon
    ari, Aug 12th, 2008 @ 1:54pm

    How, praytell, is eBay supposed to know which pieces of Tiffany merch are legit and which are counterfeit? Must it become an expert on all of Tiffany's sku's? If so, eBay should also be required to become an expert on every sku from Louis Vuitton, Hermes, Christian Dior and every other luxury goods purveyor. Then, it must be able to discern from a small digital image, which may be a mere stock photo, which items are fake. That is an untenable burden. The parties that are in the best position to gauge whether items are legit are the parties who design and market them.

    While Judge Sullivan brought up the famous Fonovisa flea market case, he distinguished it by emphasizing that the flea market owners could not only vet the merchants, but the actual goods, as well. eBay never comes into contact with any of the goods that are sold over its platform. This lack of control keeps eBay at arm's length from Fonovisa. As for its reputation among users, that's an issue for its internal management.

     

    reply to this | link to this | view in thread ]

  33.  
    identicon
    Anonymous Coward, Aug 13th, 2008 @ 2:57am

    Why? eBay is merely providing the platform. The company itself is not selling the counterfeit goods. The only one liable for that would be the individuals selling the counterfeit goods.

    Likewise...file sharing sites are not committing copyright infringement, but many of their users are. I'm not saying file sharing sites should be liable for copyright infringement...but several judges have.

    Actually, you should read the original decision in the case, where the judge detailed how much above and beyond eBay goes. The court was impressed that eBay goes well beyond what the law requires, and Tiffany is trying to force them to go even beyond that.

    I've read your coverage of the case, and the "above and beyond" was referring to ebay's efforts to prevent, filter and remove counterfeit listings, correct? If ebay actually reported each counterfeiting violator (or at least repeat offenders) to the police/FBI, the perception of liability would disappear. But while it remains so easy to break the law (counterfeiting/copyright violations/other fraud) on ebay without getting caught, and while ebay continues to make millions from the criminals - the perception of liability will remain.

    Hyperbolic analogy - If a nation knowingly allows Al-Qaeda groups to live and train within that nation's borders, receives huge tax payments or payoffs from Al-Qaeda, as well as benefits by having other economic benefits (ebay gets lots of traffic from counterfeit listings), but the country kicks out other tiny terror groups....does that mean it's OK to harbor Al-Qaeda?

    ...and should possible target states (we'll say Belgium, they just said ebay was not at liable in L'Oreal case) be responsible and required to invade a middle eastern terror harboring state to track down and eradicate the terrorists?

    Anyway...the whole argument is sort of silly from both sides. Fact is that ebay is losing tons of potential revenue, lots of potential traffic, and getting a horrible reputation for itself because of the counterfeits and scams. Whether ebay is legally liable is debatable and not clear-cut, but the effects are pretty obvious - ebay benefits in the short term, but will suffer down the road.

     

    reply to this | link to this | view in thread ]

  34.  
    identicon
    derlo, Oct 24th, 2008 @ 12:13pm

    new file engine search!

    http://newfileengine.com/- one of the best search engines in the web! Just follow the right link!

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This