New York—In response to a 2nd U.S. Circuit Court of Appeals decision that allows eBay, the online auction site, to continue to sell “Tiffany” products, some of them counterfeit, on its website, Tiffany & Co. criticized the ruling, charging eBay “deliberately misled consumers for profit.”
Michael J. Kowalski, chairman/CEO of Tiffany, blasted the court’s decision, saying that the San Jose, California-based eBay “has the responsibility to protect consumers and promote trust in the marketplace.” Tiffany’s chairman claims eBay “knew that counterfeit merchandise was being sold on its site and took no effective steps to stop it.
Tiffany sued eBay in 2004, saying eBay engaged in trademark infringement, trademark dilution and false advertising because most items that sellers list for sale as genuine Tiffany products on its sites were fakes.
According to Associated Press reports, the three-judge appeals panel upheld that the online auction site did not engage in trademark infringement or trademark dilution in its use of Tiffany’s trademarks. However, the court returned to the lower court judge the issue of whether eBay violated false advertising laws.
The panel wrote that it had difficulty with the lower court’s decision that agreed eBay’s assertions that it did not know which listings offered counterfeit Tiffany goods. The 2nd Circuit noted that eBay advertised the goods sold through its site as Tiffany merchandise.
“The law requires us to hold eBay accountable for the words that it chose insofar as they misled or confused consumers,” the appellate panel wrote. EBay would not necessarily need to stop advertising goods such as Tiffany products if it knows some of them are counterfeit, the appeals court said.
“A disclaimer might suffice,” it said. “But the law prohibits an advertisement that implies that all of the goods offered on a defendant’s Web site are genuine when, in fact, as here, a sizable proportion of them are not.”
EBay general counsel Michael R. Jacobson said in a statement that the ruling validates the company’s work to squash counterfeiting. He said the company is “confident” that the advertising issue will be decided in eBay’s favor. “We continue to support cooperation, rather than litigation, as the best way to address these issues in everyone’s best interests,”
Meanwhile, Tiffany’s attorneys say they plan a full review of appeals court decision and will consider an appeal to the U.S. Supreme Court.