here's an article from internetretailer; the link is http://www.internetretailer.com/dailyNews.asp?id=12444
Tiffanyâ€™s case against eBay reflects new legal tide against counterfeiting
When Tiffany & Co. sued eBay Inc. earlier this month, charging it with hosting sales of counterfeit products, it marked the latest action in a legal trend thatâ€™s putting more pressure on web sites to monitor the validity of products for sale, trademark attorney Lou Ederer tells Internet Retailer.
The sale of counterfeit goods on the web has long frustrated brand owners, who until recently received little recourse in the courts, he adds. "When the Internet started, counterfeit cases were thrown out because it could be shown that web hosts didnâ€™t know what was going on on their web sites," says Lou Ederer, a partner with Torys LLP in New York.
But now things are changing, and the legal trend is toward requiring web sites to be held accountable for the validity of goods sold, whether or not the seller is a third party, he says. A court dismissed a counterfeit case against a major Internet service provider several years ago because the ISP was only charging a site-hosting fee and not further involved with actual product sales, but now marketplace sites like eBay, which earn commissions related to sales, are expected to be more aware of the validity of listed products, he adds.
That could spell a formidable legal challenge for eBay, Ederer says. Tiffany filed its suit in June in U.S. District Court in New York, charging eBay with "direct and contributory trademark counterfeiting and infringement" after a survey commissioned by Tiffany found that 73% of items identified under its brand on eBay were fakes.
EBay says it will fight the suit, arguing that the case is without merit. "Through our Verified Rights Owner program, we have worked with Tiffany to develop substantial proactive monitoring efforts and given them the tools to report problem listings, which we promptly remove," eBay said in a statement.
EBay discloses on its site that it is not an expert in intellectual property rights and cannot verify whether all sellers have the right to sell the millions of items sold on eBay.com every day. It says it needs help from brands to identify fraudulent listings.
Nonetheless, Tiffanyâ€™s evidence and the recent trend in counterfeit cases "could spell a long and difficult case for eBay," Ederer says. "Based on the cases Iâ€™ve seen, hosts like eBay, including other shopping and auction sites, have to take a harder look at the level of due diligence theyâ€™re engaged in regarding sellers."