Tiffany appeals eBay counterfeit ruling

Company argues that trademark law does not impose a duty on Tiffany to police eBay's site.

At the time, an eBay spokeswoman said the decision affirmed that eBay's efforts to stop counterfeit sales were reasonable.

"Unfortunately, the trial court incorrectly held that trademark holders and not eBay are responsible for policing the eBay site. The effect of this is that eBay can continue to profit at the expense of consumers and trademark holders," said Patrick Dorsey, general counsel, Tiffany & Co., in Monday's statement. "In our view, this approach makes no sense as a matter of law or policy. Once eBay has reason to know that a specific brand like Tiffany & Co. is being widely counterfeited and sold, eBay should be compelled to investigate and take action to protect its customers and stop the illegal conduct."

Ethan Horwitz, a partner in Atlanta-based King & Spalding LLP's Intellectual Property division, said he would be surprised if the second circuit court ruled differently than the district court.

"The district court decision was a well-reasoned decision with a good basis for what it said, [which was that] Tiffany had done very little, if anything, to protect its own mark while eBay, which might not have been perfect, took care of the problem whenever Tiffany, or anybody else, pointed out a problem," Horwitz said. "So the question is are you going to put the burden on eBay to watch out for Tiffany's trademarks when it's really Tiffany's problem?"

Horwitz said he was pretty surprised that Tiffany was appealing the decision.

"I don't think the second circuit is going to change anything," he said.

If Tiffany were to win this appeal, the circuit court could remand it to the district court for reconsideration on the grounds that the district court had ruled incorrectly, said Heather McDonald, an attorney at Cleveland-based Baker & Hostetler LLP, who specializes in intellectual property enforcement and anti-counterfeiting litigation,

"Or the circuit court could find that [the district court judge's] arguments were clearly erroneous in order to overrule the district court decision - but Tiffany is going to have to make a pretty compelling argument to get the circuit court to see it that way," she said.

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