US Courts Recognize That eBay Isn't Responsible For Auctions By Users

from the a-good-ruling dept

Mon, Jul 14th 2008 12:56pm — Mike Masnick

Unlike last month's awful ruling in a French court, costing eBay millions, a US court has correctly recognized that eBay should not be found responsible for auctions of counterfeit goods. This case involved Tiffany Co., who wanted eBay to be held liable for others selling fake Tiffany goods on eBay auctions. The court sided with eBay on every single charge, and smacked down Tiffany over and over again in the ruling. It noted that eBay is not responsible for the actions of its users, and Tiffany is wrong to suggest that eBay has the responsibility to monitor the auction site for infringing auctions. eBay does take down such counterfeit auctions when made aware of them, and that is all that the company is required to do. The court specifically points out that the Supreme Court had already rejected the idea of a "reasonable anticipation" standard that would have made eBay liable, even though Tiffany tries to suggest otherwise. The court also notes that eBay didn't infringe on Tiffany trademarks in mentioning Tiffany in advertisements for the site. This is an excellent overall ruling, and nearly the complete opposite of the terrible French ruling.

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Filed Under: auctions, counterfeit goods, liability, platforms
Companies: ebay, tiffany

22 Comments

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Jerry Lees, 14 Jul 2008 @ 1:31pm

Maybe now they'll stop killing auctions for REAL stuff simply because a VERO (VErified Rights Owner) claims it muct be a fake because it's a ceaper than they would like.
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Jacque, 14 Jul 2008 @ 1:55pm

French Rules
I am more in agreement with the French rules. While a site shouldn't necessarily be responsible for the actions of it's users, it should be held somewhat responsible for profiting off of the sell of stolen/counterfeit good (craigslist doesn't profit from the sale of stolen/counterfeit goods listed on its site, ebay does through their fee structure).

Ebay's fee structure should be altered so that they do not profit from counterfeit sales (only listing fees, and no percentage of the sale fees). This would protect ebay from most lawsuits.

I also believe that eBay DID in fact infringe on Tiffany trademarks in mentioning Tiffany in advertisements for the site. Ebay (or anyone else for that matter) should not use the trademarks of another for their own gain without permission.
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Mike (profile), 14 Jul 2008 @ 2:03pm

Re: French Rules
I am more in agreement with the French rules. While a site shouldn't necessarily be responsible for the actions of it's users, it should be held somewhat responsible for profiting off of the sell of stolen/counterfeit good (craigslist doesn't profit from the sale of stolen/counterfeit goods listed on its site, ebay does through their fee structure).

eBay provides a service. It profits from providing that *service*, not from the sale of counterfeit goods.

I also believe that eBay DID in fact infringe on Tiffany trademarks in mentioning Tiffany in advertisements for the site. Ebay (or anyone else for that matter) should not use the trademarks of another for their own gain without permission.

That's incorrect. The purpose of a trademark is NOT to grant the mark holder complete control over the mark, but to prevent consumers from being confused about who made a product.

Based on your rules, Pepsi could never mention Coke in an advertisement.

You can and should be able to use a trademark in an advertisement, so long as you're not trying to convince someone that you are that other company.
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Kiba, 14 Jul 2008 @ 2:05pm

Re: French Rules
That would be good incentive for auction sites to spring up. NOT!
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Chuck, 14 Jul 2008 @ 2:08pm

Huh?!
So a website, like Techdirt, or a newspaper, shouldn't be able to mention Tiffany or even EBay for that matter? Both profit by mentioning their names.

If Ebay only charged listing fees, those fees would be much higher than what they are now. The fees would be paid even if an item didn't sale. Their current fee schedule allows the gal with some oddball item that she doesn't want to list it at a low cost and if it sales then she pays a little more.
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Dave Zawislak, 14 Jul 2008 @ 2:16pm

Re: French Rules
Ebay's fee structure should be altered so that they do not profit from counterfeit sales (only listing fees, and no percentage of the sale fees).

So, if your logic holds, the credit card company and the shipping company shouldn't make money either. As shouldn't the cardboard box maker, nor the cellophane tape maker either.
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Bearded Ribeye, 14 Jul 2008 @ 2:19pm

Re: French Rules
Who let this frog on here in the first place? This guy must work for the RIAA or something.
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Gunther, 14 Jul 2008 @ 2:26pm

Re: French Rules
Then let me be the first to suggest that you should move to France. According to a US court, eBay did not infringe on Tiffany trademarks (and you don't seem to comprehend trademark law). Fortunately, here in the US, we'll go by what the US court says, and not by what you believe, or by the misguided ruling of a French court.
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Jacque, 14 Jul 2008 @ 2:27pm

Re: Re: French Rules
Actually Mike, due to Ebay's fee structure, they collect more money of the sale based on the final value (final value fees). This is NOT profiting from the service, but from the sale. The listing fees on the other hand are simply profiting from the service.

I agree, Pepsi should NOT be mentioning Coke in their ads unless an agreement has been made with Coke.
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Ted, 14 Jul 2008 @ 2:32pm

So, why are megaupload/rapidshare/torrent sites held liable for the material they post? Why are they responsible for what's posted on their sites?

Ebay knows there's tons of counterfeit items sold, they don't care.
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Beefcake, 14 Jul 2008 @ 2:32pm

Post Title
Nice pun.
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dorpass, 14 Jul 2008 @ 2:52pm

Re: Re: Re: French Rules
Jacque, stop mentioning Coke and Pepsi, according to your interpretation, Mike's blog is breaking all sorts of trademark laws every time you do it. Or I do it.
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PRMan, 14 Jul 2008 @ 2:58pm

Worse than US courts?
Congratulations, France, you've managed to be worse than the US at administering justice. We know it was a hard struggle. You must be proud.
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Anonymous Coward, 14 Jul 2008 @ 2:58pm

Re: French Rules
I also believe that eBay DID in fact infringe on Tiffany trademarks in mentioning Tiffany in advertisements for the site.
According to just exactly which law?
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Anonymous Coward, 14 Jul 2008 @ 2:59pm

So hold on a sec...

If this is the case then why do we hold ISP`s responsible for torrents ?

All ISP`s do is provide a service, just like ebay.

One rule for one...
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Willton, 14 Jul 2008 @ 3:15pm

Re: French Rules
I am more in agreement with the French rules. While a site shouldn't necessarily be responsible for the actions of it's users, it should be held somewhat responsible for profiting off of the sell of stolen/counterfeit good (craigslist doesn't profit from the sale of stolen/counterfeit goods listed on its site, ebay does through their fee structure).

The law does make Ebay liable to such behavior under the law of contributory infringement, but only if Ebay knew that the goods were counterfeit and still allowed the sale. If Ebay does not know that a certain auction is for a counterfeit good, they cannot be held liable for the sale of that good.

Ebay's fee structure should be altered so that they do not profit from counterfeit sales (only listing fees, and no percentage of the sale fees). This would protect ebay from most lawsuits.

I suppose it would, but given the enormity of Ebay, that would be an administrative nightmare. How is Ebay supposed to know which auctions are for legit goods and which ones are for counterfeits?

I also believe that eBay DID in fact infringe on Tiffany trademarks in mentioning Tiffany in advertisements for the site. Ebay (or anyone else for that matter) should not use the trademarks of another for their own gain without permission.

How is Ebay using the Tiffany marks for their own gain?
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Mike (profile), 14 Jul 2008 @ 3:20pm

Re: Re: Re: French Rules
Actually Mike, due to Ebay's fee structure, they collect more money of the sale based on the final value (final value fees). This is NOT profiting from the service, but from the sale. The listing fees on the other hand are simply profiting from the service.

That's for the service. They price the service based on the fees sold, but they're getting paid for the service not the good.

I agree, Pepsi should NOT be mentioning Coke in their ads unless an agreement has been made with Coke.

Really? Then didn't you just break both Coke and Pepsi's trademark?

The idea that Pepsi can't mention Coke is utterly ridiculous. What possible rationale could you have for that?
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Lawrence D'Oliveiro, 14 Jul 2008 @ 10:32pm

Re: French Rules
Mike wrote:
They price the service based on the fees sold, but they're getting paid for the service not the good.

Are they providing a different level of service based on the price of the item? Nope--it's exactly the same service. So clearly Ebay's profit is from the sale of the item, not the service.
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Killer_Tofu (profile), 15 Jul 2008 @ 5:36am

Well..
I think Jacque was adequetly smacked down by everyone, so I will skip pointing out how dumb his arguments are.

I will simply say that this is an awesome court ruling and I am very glad to hear about it. Now we need to just push this farther so the same occurs with regards to ISPs & Torrent Tracker sites so that the MAFIAA will be forced to back down. Now that would be grand.
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Dr.Andrews, 25 Jul 2008 @ 2:26am

Shut UP!
JUST SHUT UP MAN!
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Hiway, 28 Aug 2008 @ 11:02am

Pawnshops are though- double standard
That's odd, wonder if pawnshops now can use this case as precendent and not be liable for taking stolen goods then.

I mean that incredibly smart statement from our illustrious judges in this great country stating that a money laundering site like Ebay isn't "responsible" for what their users do is mind boggeling genius to say the least...
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ja pan, 10 Feb 2009 @ 7:20am

ebay policies
I am really disgusted with ebay for allowing so called hunting and fishing knifes be sold on their site, what with all the stabbing going on in the UK they should be ashamed of themselves, surely we should worry more about things like knifes being sold for just a few pounds.
You know, I cant believe that ebay took off from sale a pair of used tights I was selling saying they were adult material !! they want to take note of the more serious offenses that are happening on their site, instead of petty things like used tights.
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