Opinion: EBay deflects another claim related to counterfeit goods

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EBay won another victory today in its far-flung legal battles with trademark owners. According to the wire service AFP, a Belgian court ruled that the auction house was not required to police its site to prevent counterfeit goods from being sold. The ruling, which came on a lawsuit by cosmetics maker L’Oreal, mirrors a decision last month by a federal judge in New York to reject Tiffany and Co.’s claims against eBay. By contrast, a Paris court held in June that eBay was liable for the sale of counterfeit Louis Vuitton goods and other luxury items. (EBay is appealing.)

Tiffany, which filed an appeal this week of U.S. District Judge Richard Sullivan’s ruling, argued that eBay was liable for the sale of counterfeit goods because it didn’t take the initiative to block suspect sales — e.g., someone offering multiple ‘Tiffany’ items at a deep discount. EBay countered that its only duty was to block the auctions that Tiffany fingered. Sullivan agreed, saying the enforcement burden was on trademark owners, not middlemen such as eBay.

Rulings by Sullivan and the Belgian commercial court offer an important bit of clarity about the duties of online intermediaries whose platforms and services become a vehicle for violating intellectual property rights. As the editorial board noted in July, copyright and trademark owners have pressed lawmakers and the courts to force those intermediaries to do more to stop infringement. But such burden-shifting could crimp the development of technologies that, in the long run, benefit both rights holders and consumers. For example, people may be more willing to buy expensive jewelry from Tiffany because the secondary market established by eBay takes some of the risk out of their investment. Granted, from Tiffany’s perspective, eBay looks more like a parasite that increases the competition by offering used and fake goods. And there’s a lot of legal skirmishing yet to come on this issue. In addition to the appeals in the Tiffany and Vuitton cases, L’Oreal has claims pending against eBay in four more European countries.