Clear as Stained Glass to Court: eBay Wins Tiffany Counterfeit Suit

Last Updated Jul 14, 2008 3:26 PM EDT

Tiffany & Co.After four years, a Federal District Court ruled that eBay is not legally responsible to keep users from selling counterfeit Tiffany products. It's good news for the online auction company after recent legal losses over trademark and counterfeit issues:
The ruling marks a dramatic turn in eBay's recent courtroom fortunes and comes a week after a French judge ordered eBay to pay $60 million to the French luxury goods maker LVMH Moët Hennessy Louis Vuitton, the maker of Louis Vuitton handbags. In April, a German appeals court ruled that eBay must take preventative measures against the sale of counterfeit Rolex watches.
The decision is a big one for eBay, which otherwise could have been liable to one company after another, and also keeps language on the site simpler:
First, the court finds eBay's advertisement, through "Tiffany"-keyed adwords on Google and Yahoo! searches, to be "nominative fair use." Some eBay sellers are offering genuine Tiffany merchandise, as trademark law recognizes is legitimate, and eBay has the right to use the brand name to identify them, rather than "absurd circumlocutions -- [such as] 'silver jewelry from a prestigious New York company where Audrey Hepburn once liked to breakfast.'" Even if search keywords are "use in commerce," therefore, the court finds them non-infringing.
More importantly, this keeps the company from being considered responsible for the infringements of its users. At a time when many companies look toward user content, that has to be a relief.

Tiffany & Co. store image via Flickr user sbcarlile, CC 2.0. And now a message from our sponsor: Like what you've read here? Hate it? Think BNET can be better? Let us know! Email us directly, or take the Help Us Build a Better BNET poll on BNET Intercom.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.