eBay Strikes Back, Sues For Frivolous DMCA Takedowns

from the good-for-them dept

For quite some time we’ve seen companies try to make bogus intellectual property claims against people reselling their products on eBay. For example, a company making shampoo once claimed that you couldn’t resell its bottles online — even when legally purchased. The companies always claim that only “authorized” resellers are allowed to sell their products, and they must do so at a specific price. Last year, when the Supreme Court changed rules about whether manufacturers could demand retailers abide by a specific price, it kicked off speculation that we’d see more such cases. In fact, that’s exactly what happened. In one case, a company named Innovate! Technology claimed that someone selling their products on eBay violated their intellectual property (including patents, trademarks and copyright!). The real complaint, of course, had nothing to do with intellectual property, but that this seller was selling below the company’s official pricing. This seemed pretty ridiculous already, but these types of cases are designed to scare off small time sellers who don’t have big legal guns to back them up.

However, Innovate appears to have made a huge strategic error that has brought some big legal guns into the case, and they’re clearly pointed at shooting Innovate’s use of the DMCA down. Greg Beck writes in to note that while the case was directly between Innovate and the eBay seller, Innovate made the mistake of pushing to get eBay involved in the case. Normally, eBay just does what’s required of it in DMCA cases and gets out of the way. However, now that eBay is involved, it got involved in a big way. It’s fighting back against Innovate, claiming that Innovate has been filing bogus DMCA requests and so now eBay is seeking damages, attorney’s fees and an injunction preventing Innovate from filing any more DMCA notices to eBay. In other words, it’s trying to make an example of Innovate. Hopefully it works, and others pursuing this same strategy of trying to stop legitimate competition through bogus DMCA notices will think twice before continuing.

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Companies: ebay, innovate

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Comments on “eBay Strikes Back, Sues For Frivolous DMCA Takedowns”

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24 Comments
dualboot says:

what's the point...

… of limiting sales of your product to within the full retail segment? Innovate received their cut when the reseller bought it, and allowing auction sales generates more unit sales, and hence more profit dollars. People who would not purchase @ full price at all, will buy an auction. It’s how I got about 25% of all my high-priced gadgets (which I would not have purchased otherwise).

Some other companies even honor warranties on their products sold through internet auctions, beginning on the sale dato. This teaches me to keep shopping those brands, and not shop Innovate.

Boost says:

Re: what's the point...

Because if retailers have to drive their price down to compete with Ebay acutions then they will be less willing to bring that product to market for the supplier…eventually putting the supplier out of business. Some suppliers can compete with the broad Ebay market, but others with higher costs can’t. Most of the time the suppliers combat this by only offering product warrentees through authorized retailers. Really, it’s what keeps smaller industries, such as the bicycle industry afloat.

Idleline says:

Let's not be too proud of eBay here...

What a horribly poor assessment. The operating expenses revolving around honoring DMCA takedowns is nothing compared to the loss of business from eBay sellers. eBay has been under tremendous pressure to improve user experience, which affects user retention rates tremendously, which affects the number of listings, which affects the growth of the company, which affects the stock price, etc…

eBay has never been under pressure for their operating expenses. Capital spending, if anything, is the only hot topic on that side of the balance sheet.

PaulT (profile) says:

Re: Re:

#10 – that’s a pretty dumb comment and nothing to do with the case at hand. The legal case here is somebody reselling legally purchased goods, just at a price that the manufacturers don’t like (even though they’ve already been paid). You’re on about piracy and not paying the creators of the goods – very different and you’d rightfully be shut down if you tried it.

To everyone else talking about how eBay’s only looking after #1 – that’s fine. Hopefully this will help set a precedent that people who issue DMCA notices really do have to be sure that they own the relevant copyrights and reduce bogus compliants for everyone. It will reduce eBay’s costs, but will also help many other industries who have to waste money on this kind of garbage.

Bob E. Bob says:

Ebay does what's best for Ebay.

Errr. Someone names Ebay as a co-defendant? Well, that’s … suicidal. Ebay understands the way the US legal works – $$$=might=right. You simply can’t fight an 800 pound gorilla unless you’re a 900 pounder. If one decides to challange the legality of Ebay’s actions, that [poor misguided] one better make things right with his God and get ready for his [oh, it hurts just thinking about it] due.
A giant corporation [mis?]uses the legal system to protect its interests – what’s so newsworthy or laudable ’bout that?

Bill says:

#13

I think you’re mistaken. #10 said nothing about the music being illegally acquired. Whether it’s the music industry or a shampoo maker, their compensation should end when the item has been legally purchased. What the user does with the product is their own business. If it’s legal to resell a bottle of shampoo then it should be legal to resell your CDs and legally acquired tracks at whatever price you choose. #10 didn’t say his tracks would be ripped or from p2p, so any claim of infringement is bogus. If you can’t see why this ties in with the Ebay case then think a little harder.

Yelky business (user link) says:

bogus baloney and bs

Anytime I purchase something legally the maufactures right to get additional compensation ends. Weather I pay one penney or $200.oo bucks for something, when I purchase it, keep my receipts, it’s mine..I can choose to do with it as I please regardless of X)???? manufactuer.
I may give it away, resell it or burn it..that’s my decision and my right as an American. It no longer belongs to X)???? manufactor or *^?>

Carol says:

VERO

As a very small seller,I have had items pulled as I used the items legal name.It is mine after I buy it.I can understand the large manufacturer being upset with me for selling10,50.or whatever larger amounts to sell as that is a lot of merchandise being sold ,or at least more than 1.But when it is just a lowly seller with one item of a large manufacturer(and seller having already paid the purchase price,when they bought it or received it as a gift or whatever)I cannot understand the reason for pulling their item,unless it was being sold by the seller in numerous quantity,at a way,way lower price than they sell the new unused product at.I make very little money doing this,and have been robbed to be able to sell some of my very best items where I might actually have made a decent price for a change!

Jim Page says:

Same here

I have also had several large Co. items hanked from EBAY for the simple fact that the Co. in Question does not like to see their products resold. I own the product I payed for the product, they have already made their money but they are not satisfied with that. Hell Why not stop stamp, record and figuine collectors from buying and selling. These items mostly fall under collector’s items ie: old software and games that Companies like Microsoft do not even support any more. Time for them to get real!
Jim

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