Want to stay current on e–commerce law? Sign up for Email Newsletter.
New York Appeals Court Finds in Favour of eBay Over Dispute with Tiffany and Co.
The United States Court of Appeals for the Second Circuit has affirmed the Southern District Court of New York’s ruling that eBay, who is the proprietor of a website where counterfeit Tiffany & Co. (“Tiffany”) merchandise was sold, did not on the facts presented, engage in trade-mark infringement or trade-mark dilution as claimed by Tiffany. However, the Appellate Court disagreed with the lower court on their conclusions with respect to Tiffany’s claim of false advertising and remanded the case for further proceedings on this issue.
Tiffany made two claims on the issue of trade-mark infringement. Firstly, Tiffany argued that eBay had infringed its trade-mark in violation of s.32 of the Lanham Act, otherwise described as “direct infringement”. The Court disagreed, using case law to substantiate their reasoning that eBay may lawfully use a trade-mark where doing so is necessary to describe the product and this does not imply a false affiliation or endorsement with the owner of the product. eBay used Tiffany’s mark on its website to accurately describe the genuine Tiffany goods offered for sale and none of eBay’s uses of the mark suggested that Tiffany affiliated itself with eBay or endorsed the sale of its products through eBay’s website. Secondly, Tiffany argued that eBay was liable for contributory trade-mark infringement, for culpably facilitating the continuing infringing conduct of the counterfeiting vendors on eBay. By using the “Inwood test” formulated by the U.S. Supreme Court in Inwood Laboratories, Inc. v. Ives Laboratories, Inc., the Court held that for liability to be imposed on a defendant who continues to supply its service to one whom it knows or has reason to know is engaging in trade-mark infringement, a service provider must have more than general knowledge or reason to know that its service is being used to sell counterfeit goods. On the facts of the case, this was not proven.
On the issue of trade-mark dilution, the Court held that there was no second mark or product at issue to blur with or to tarnish the “Tiffany” mark, as a result the Court rejected Tiffany’s dilution claim. However, the Appellate Court was not able to affirm the district court’s finding that eBay’s advertisements were not likely to mislead or confuse consumers. As a result, they concluded that remand to the district court on the issue of Tiffany’s false advertising claim was warranted.
For a copy of the decision, visit: