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.