Tiffany’s were not best pleased this week after losing their court battle with online auctioneer eBay. A court ruled that eBay were not, in fact, liable for the sale of counterfeit jewellery from the jewellery maker on their site. Thus, it would seem that the retailing giant has won the battle against the brand protectionists, but with internet law so fragmented will it eventually win the war? The decision to award the case to eBay followed a four year long trial. After this laborious process, in which it was concluded that “Companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their websites”, it leaves internet law in rather a fragmented state. Whilst the US District Judge, Richard Sullivan made this ruling, he did offer strong sympathy with Tiffany’s claim. To this end, within his 66-page judgement, he stated, “The court is not unsympathetic to Tiffany and other rights owners who have invested enormous resources in developing their brands, only to see them illicitly and efficiently exploited by others on the Internet.” (Source: www.boston.com) Tiffany’s are understandably disappointed with the decision. A spokesman for them, Mark Aaron said, “We are shocked and deeply disappointed in the district court’s erroneous reading of the law.” To them, the case has been viewed in the wrong way by the legal system and they cannot believe how this has come about, especially going on the fact that a previous ruling has recently swung the other way. Just last month, a court ruling in France ordered that eBay pay $63.6 million to LVMH Moet Hennessy Louis Vuitton SA, over claims the site didn’t do enough to block the sale of fakes. They also commanded eBay to stop all sales of LVMH perfumes on its French site. This seems to depict a clear indeterminacy between countries on a global issue. Europe certainly seems to be taking a more protectionist view. Another French court stated last month, in relation to a case filed by Hermes International, that eBay is a partner to its vendors and must take more action to ban counterfeits. Last year, in a case brought by Rolex group, Germany’s highest court declared the same. This issue seems to centre on whether eBay want to affiliate themselves with commerce for the common people or luxury brands like LVMH and Tiffany’s. eBay’s argument is that the matter of counterfeit goods is a red herring. Luxury brands, according to eBay, are more concerned with keeping a tight leash on circulation of their goods than in keeping fakes off eBay’s website. They contend that a more open marketplace is vital for dynamic Internet commerce. Indeed, internet analysts are tending to agree with this view, predicting that should the decision have gone the other way, this would have resulted in the foreclosure of an entire class of eCommerce. At present, the war over brand protection could go either way as it seems that the US and Europe are willing to battle it out. The issue is far from over and it may well be consumers who will triumph by independently stipulating authentication of goods online. After all, the customer is always right.
Justin Drummond,
Chief Executive - Media Corporation plc
Revolution Magazine
