eBay Wins Huge Ruling in Tiffany Case

July 14, 2008 · by · in Derivative Liability, Trademark

By Eric Goldman

Tiffany (NJ) Inc. v. eBay Inc., No 04 Civ. 4607 (RJS) (SDNY July 14, 2008)

In a 66 page ruling that I haven’t had time to digest, the judge appears to have completely accepted eBay’s arguments in the Tiffany v. eBay lawsuit over sales of counterfeit Tiffany goods on eBay, issuing a clean sweep for eBay and dismissing the case in its entirety. The most interesting parts from the introduction:

* “the Court finds that 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.”

* on the contributory liability question, the court reiterates that the standard is “whether eBay continued to supply its services to sellers when it knew or had reason to know of infringement by those sellers.” eBay’s response to take down notices satisfied this standard. “The law does not impose liability for contributory trademark infringement on eBay for its refusal to take such preemptive steps in light of eBay’s “reasonable anticipation” or generalized knowledge 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 court brushed aside Tiffany’s complaints about the policing costs it had to bear.

* The court rejects dilution because Tiffany hasn’t shown a likelihood of dilution; and even if it did, eBay’s use would be protected as a nominative use.

I need to read this ruling with more care, especially the judge’s interesting reliance on the shaky nominative use doctrine. I’ll try to update this post after I do. For now, this is a major win for eBay specifically, but it’s also a win generally for online service providers who have been receiving trademark takedown notices and haven’t known what to do about them. Unfortunately, a nice clean win like this also invites a challenge, and I’d be surprised if this ruling were the end of it. Instead, the battleground might just shift to the Second Circuit or Congress.

UPDATE: I have posted a comprehensive critique of the case here.