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Second Circuit Finds No Trademark Infringement for Good Faith Secondary Sales Of Counterfeit Goods
In Tiffany (NJ) Inc. v. eBay Inc., No. 08-3947-cv (2d Cir. Apr. 1, 2010), the Second Circuit affirmed a judgment of the U.S. District Court for the Southern District of New York holding that eBay did not infringe Tiffany's trademarks by facilitating sales of counterfeit Tiffany goods, where eBay had only general, but not specific, knowledge of the counterfeit Tiffany goods and had programs to combat the sales of counterfeit goods.
Tiffany, the well-known maker of high-end jewelry, has historically exercised very tight control over its brand. It sells its jewelry exclusively through its own retail stores, catalogs, Web site, and corporate sales department; it does not use liquidators, sell overstock merchandise, or sell its jewelry at discount prices. eBay, the popular online auction site, hosted many listings for secondhand Tiffany jewelry from April 2000 to the present day. Tiffany conducted two surveys of these listed items in 2004 and 2005, and concluded that over 70% of purported Tiffany items sold on eBay were counterfeit.
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