IPKat successfully predicts our description of EBay’s victory over L’Oreal regarding the sale of counterfeits.
The latest vocal entrant into the legal debate is the Electronic Frontier Foundation, Public Knowledge and Public Citizen (.pdf). If Tiffany prevails on appeal, online marketplaces would likely come “to a halt,” the groups said in a court filing Wednesday. They urged the appellate court “to reject Tiffany’s effort to rewrite trademark law to relieve mark-owners of their traditional obligation to police their own marks, online and off.”
Amazon and Google, (.pdf) as well as Yahoo (.pdf) and others have sided with eBay. The Council of Fashion Designers of America (.pdf) and the International Anti-counterfeiting Coalition (.pdf) have urged the court to side with Tiffany.
Details on this October 2 Webinar here.
In yesterday’s decision in Tiffany v eBay, the Court noted:
Notwithstanding the significance of the online counterfeiting problem, it is clear that Tiffany invested relatviely modest resources to combat the problem. In fiscal year 2003, Tiffany budgeted approximately $763,000 to the issue, representing less than 0.05 percent of its net sales for that year . . .
More specifically, Tiffany’s time dedicated to monitoring the eBay website and preparing NOCIs [complaints under eBay’s VeRO program) was limited. . . a paralegal . . devoted two days a week to reviewing the eBay website and answering emails from buyers and sellers involving removed listings. . . Tiffany’s security manager also devoted one day a week to monitoring and reporting on the eBay website. . .
Decision, page 18.
Is 0.05 percent of net sales a lot or a little?
Is two days of a paralegal’s time a lot or a little for a brand that’s alleging 46,000 allleged infringements in a year?
From the decision:
First, the Court finds the eBay’s use of Tiffany’s trademarks in its advertising on its homepage, and in sponsored links purchased through Yahoo! and Google, is a protected nominative fair use of the marks.
Second, the Court finds that eBay is not liable for contributory trademark infringement . . . the standrard is not whether eBay could reasonably anticipate possible infringement, but rather whether eBay continued to supply its services to sellers when it knew or had reason to know of infringement by those sellers (cite to Inwood). Indeed, the Supreme Court has specifically disavowed the reasopnable anticipation standard as a watered down’ and incorrect standard Id.
Here, when Tiffany put eBay on notice of specfic items that Tiffany beleived to be infringing, eBay immediately removed those listings . .
The law does not impose contributory trademark infringement on eBay for its refusal to take such preemptive steps in light of eBay’s ‘reasonable anticipation’ or generalized knolwedge that counterfeit goods might be sold on its website. Quite simply, the law demands more specific knowledge as to which items are infringing and which seller is listing those items before requiring eBay to take action. ”
The result of the application of this legal standard is that Tiffany must ultimately bear the burden of protecting its trademark. Policymakers may yet decide that the law as it stands is inadequate to protect rights owners in light of the increasing scope of Internet commerce and the concomitant rise in potential trademark infringement.
A French court today cracked down on counterfeits — and an outlet that sells them — ordering eBay to pay Louis Vuitton and other luxury brands — Kenzo, Guerlain, Dior and Givenchy — $63.1 million in damages for auctioning fake goods.
WSJ.com Law Blog: Tiffany v. eBay:
“Who is responsible for the policing of counterfeit products on eBay?
If you think that’s an interesting question and you’re here in Gotham, hightail it down to Judge Richard Sullivan’s courtroom in the Southern District where a bench trial gets underway today pitting Tiffany against the online auctioneer. Legal experts say a win for Tiffany could change the way eBay handles its auctions.”
PERFECT 10, INC., v. VISA INTERNATIONAL SERVICE ASSOCIATION; FIRST DATA CORPORATION; CARDSERVICE INTERNATIONAL, INC.; HUMBOLDT OPINION BANK; MASTERCARD INTERNATIONAL, INC. No. 05-15170 (9th Cir. July 3, 2007)
“Perfect 10, Inc. (Perfect 10) sued Visa International Service Association, MasterCard International Inc., and several affiliated banks and data processing services (collectively, the Defendants), alleging secondary liability under federal copyright and trademark law and liability under California statutory and common law. It sued because Defendants continue to process credit card payments to websites that infringe Perfect 10’s intellectual property rights after being notified by Perfect 10 of infringement by those websites. The district court dismissed all causes of action under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. We affirm the decision of the district court.”
Why is it infringement to authorize infringement of copyright or patent, but not trade mark? Horsehair wig wearer Warwick Rothnie discusses a case brought by LVMH against an Australian ‘trash and treasure’ market.