All That Glitters Isn’t Legit

Tiffany, the legendary jeweler, claims eBay encourages the sale of bogus baubles.
John P. Mello Jr.March 20, 2006

A lawsuit by Tiffany & Co. against eBay Inc., seeking stronger brand protection for goods bearing the famous jeweler’s name, could have consequences that extend far beyond the online mega-merchant.

Indeed, this is one of a series of cases that will determine “what kind of burden and liability we are going to place on the people who are the framework of the Internet,” says Joseph Berghammer, an intellectual property attorney with Banner & Witcoff in Chicago. “It could make a watershed difference in electronic commerce.”

As we noted at the height of the dotcom days in our cover story “Sittin’ on the Dock of eBay,” the company made its fortune by cutting itself out of the loop and letting its customers do the heavy lifting; eBay “doesn’t manufacture a thing, hold inventory, move goods, or transfer payment.” Now Tiffany, it seems, would have eBay take a more personal interest in what’s selling on the auction website.

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The lawsuit — filed in July 2004 in U.S. District Court in New York but still awaiting a trial date — accuses eBay of “facilitation and participation in the counterfeiting, infringement, and false advertising” of Tiffany’s trademarks. The Parsippany, New Jersey-based jeweler contends that “the eBay website is currently, and has been, infested with many thousands of counterfeit Tiffany items, many of poor quality, which, upon information and belief, has directly led to the defrauding of tens of thousands of consumers who mistakenly believed they were purchasing genuine Tiffany jewelry.”

The complaint argues that eBay promotes their sale of bogus goods by touting them on “welcome” pages and through Internet search-engine advertising linked to the keywords “Tiffany & Co.” or “Tiffany.” Further, the suit maintains that “eBay’s grouping of counterfeit Tiffany items under the Tiffany & Co. trademark…actively encourages the sale of counterfeit merchandise by suggesting that the items in question are genuine Tiffany goods.”

Although eBay serves as a meeting place for buyers and sellers but does not participate in transactions itself, the Tiffany lawsuit seemingly seeks to hold eBay responsible for its users’ behavior. Together, the two companies did crack down on counterfeits in 2003 and 2004, shutting down some 19,000 auctions, but apparently the jeweler remains unsatisfied. “We have worked with Tiffany for a long time on their brand protection efforts,” observes eBay spokesperson Hani Durzy. “That’s why we’re surprised and disappointed that they chose to take the course of action that they did.” was unable to reach a Tiffany spokesperson for comment.