Watermark

In a decision handed down by the US District Court earlier this week, eBay Inc has been found not liable for trade mark infringement through the sale of counterfeit Tiffany branded products on its online auction site www.ebay.com.

Tiffany & Co Inc had sued eBay for contributory trade mark infringement for not be proactive and removing potentially counterfeit merchandise prior to listing the merchandise for sale.  eBay had argued that it had fulfilled its legal obligations by removing merchandise immediately upon receiving notification the merchandise was counterfeit.  Accordingly, eBay argued it was under no obligation to take down listings which it had not been notified by the trade mark owner were in fact counterfeit.

The US District Court judge agreed with eBay, finding that the trade mark owner must bear the burden of monitoring use of its trade mark: “Tiffany must ultimately bear the burden of protecting its trademark. The court finds that when eBay possessed the requisite knowledge, it took appropriate steps to remove [counterfeit] listings and suspend service.”

Interestingly, a French Court just last month found against eBay, ordering the company to compensate Louis Vuitton more than $62 million over the sale of counterfeit goods on its eBay site.  A similar case has not as yet been commenced in Australia, although it is likely an Australian Court would take some note of the US case and follow a similar line.

This case reminds us of the significant role trade mark owners must take in protecting their trade marks.  It is important for trade mark owners to continually monitor the activities of third parties to capture and deal with the infringing activity swiftly.  eBay has policies and procedures in place to remove listings of counterfeit goods immediately a notification of infringing activity is filed by the trade mark or copyright owner, and to block sellers who are suspected of selling counterfeit goods.  Watermark clients have found this procedure is relatively simple and effective in preventing sale of the counterfeit goods on the eBay site.  Information about the eBay policies can be found here.