Tiffany loses eBay battle

A judge in New York has ruled that online auction house eBay cannot be held liable for the sale of counterfeit goods by its users. The decision reaffirmed eBay's argument that trademark holders such as luxury jewellery Tiffany & Co., who made the claim, are responsible for policing the online marketplace for fake products, not eBay.

US District Judge Richard Sullivan in New York rejected Tiffany's claim that eBay wrongfully allowed sales of thousands of fake bracelets and necklaces. Yesterday's decision followed a nonjury trial in which Tiffany called eBay a "rat's nest" of trademark violations.

"It is the trademark owner's burden to police its mark," Sullivan said in the ruling. "Companies like eBay cannot be held liable for trademark infringement based solely on their generalised knowledge that trademark infringement might be occurring on their websites."

The Tiffany case was the first to challenge eBay in the United States over counterfeiting and was being closely watched by other U.S. manufacturers. Almost half of eBay's $7.7 billion in annual revenue comes from its U.S. business.