EFF backs eBay in Tiffany spat

Originally posted 2008-12-05 00:01:56. Republished by Blog Post Promoter

See, we don’t agree with Public Citizen all the time!  Read on, via the Electronic Frontier Foundation (EFF):

[EFF] along with Public Citizen and Public Knowledge urged a U.S. court of appeals Wednesday to reject jewelry-maker Tiffany’s attempt to rewrite trademark law and create new barriers for online commerce and communication. . . .

“Millions of Americans use sites like eBay and craigslist to buy and sell goods,” said EFF Senior Intellectual Property Attorney Michael Kwun. “If Tiffany had its way, sites like eBay would be responsible for figuring out whether items its users are selling — items eBay itself never sees — are authentic or counterfeit. That’s an impossible task.”

It is?  Where are the metrics for “impossible”?  Can we start with nearly half a billion dollars in quarterly profits in the third quarter of this year? How do you get from that to “impossible”?

Here’s the EFF amicus brief.  Lots of talk about “burdens,” and “impossible,” but no data.  Yes, as a general rule the burden of proof is on the plaintiff in civil matters, but hasn’t Tiffany shifted that burden by coming forward with the undisputed claim that massive amounts of counterfeit merchandise is being sold on eBay?

Now take a look at the amicus brief of the International Anti-Counterfeiting Coalition (IACC), written by my friend David Bernstein and his partner Bruce Keller and counsel Michael Potenza. They make the point:

What the District Court failed to realize, however, was that this distinction essentially eliminates the universally accepted constructive knowledge standard and eviscerates the well-settled rule that one cannot avoid contributory infringement liability through willful blindness to prevalent third-party misconduct. That is why swap meet and flea market operators — the brick-and-mortar equivalent of eBay — are subject to contributory liability if they are generally aware of pervasive infringement on their premises, regardless of whether they know the specific identities of the counterfeiters or the particulars of the counterfeiting transactions. . . .

Those same principles are directly relevant here. The evidence of eBay’s awareness of massive infringing activity on its site is overwhelming.  Where, as here, evidence of counterfeiting and infringement is so pervasive, basic common law concepts, endorsed as applicable by the Supreme Court, hold that a reasonable person is chargeable with sufficient knowledge about the conduct to be liable for its assistance. . . .

The District Court actually turned this rule on its head. It held that Tiffany’s duty to police its marks absolved eBay of responsibility for the widespread infringement and counterfeiting on its site.  Tiffany’s efforts to police its marks are irrelevant to eBay’s liability for its own infringing activity; any alleged failure to prosecute unauthorized third party users may be relevant to the strength of the mark, but it is not relevant to whether eBay has done enough to prevent counterfeiting on its site.

Emphasis mine.  As is so often the case in trademark litigation, it is enough merely to float a conceptual premise that “sounds right” to a judge without having to back it up with data or some kind of concrete proof — especially if that premise means, well, less work for, uh, the judge.   In this case, the District Court refused to ask the question rigorously of whether eBay has indeed “done enough” to prevent counterfeiting.   Along with our co-author Roberta Kraus, we tried to argue this point forcefully in drafts of our famous (to LOC readers!) and, well, groundbreaking 2003 article on this topic, but it was committeed down to milquetoasty compromise.

The Second Circuit should remand for proof on this point:  What has eBay done to satisfy the burden on it to avoid “willful blindness” of the illegal activity from which it is profiting so magnificently?  And in doing so, the Circuit should enunciate how that level of prevention is to be weighed when compared to eBay’s overall profitability, and not merely in a vacuous never-never land of “well, gosh, all those sales, that would be really hard, wouldn’t it”?

Well, wouldn’t it?  Or would it?

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Author:Ron Coleman

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6 Responses to “EFF backs eBay in Tiffany spat”

  1. December 5, 2008 at 3:33 pm #

    What, exactly, are you expecting eBay to do? Filter out all items with “Tiffany” in their description, whether the items are real or fake, legitimate or not? And if this even ends up suppressing sales of CDs by the singer Tiffany, so be it?

  2. Pete Madsen
    December 6, 2008 at 2:55 pm #

    I’m an eBay seller who deals primarily in old license plates, which are my hobby. Ebay has a rule that license plates less than three years old may not be sold (probably to keep from having hassles with state dmv’s). I know that eBay makes some efforts to enforce that rule, because I’ve had auctions canceled in the past because of it, and so have other license plate collectors I know. Yet on almost any page of license plate listings one can see items for sale that violate the rule.

    I am certain that if anyone hassles eBay about their lax enforcement of this rule, they will say “1. We say that we’re not responsible for every thing someone listed that might break one of our rules. 2. If someone complains about a listing we’ll look into it and terminate it if it does break a rule. 3. We’ve done so in the past – we’ve shut down listings of Pete Madsen and some of those other guys. 4. There isn’t time and money enough in the world to hire people to look at every listing to make sure it doesn’t break some rule; our site would be so expensive no one would use it.”

    I’d suspect that these objections also apply to the Tiffany spat.

    - Pete

  3. December 7, 2008 at 4:32 pm #

    Pete, you’re right. That’s pretty much what they say.

    Dan, if the law were applied properly, it wouldn’t be “my” problem to figure out “what eBay’s supposed to do.” Any time you do something that makes you liable for infringement, you have a legal obligation to stop doing it, not to say “What am I supposed to do?” You’re supposed to not break the law or provide resources for others to break the law, especially when in the latter case you’re profiting from that activity.

    This provides an excellent incentive for figuring out “what to do”!

  4. January 1, 2009 at 7:09 pm #

    Let me offer another perspective here, that of the Verified Rights Owner. I participate in EBay’s VeRO program, where I have taken down hundreds of EBay auctions, and identified dozens of sellers who I believe are mostly selling either stolen or counterfeit merchandise.

    While EBay claims that its VeRO program provides a safe harbor, protecting it from the law-breaking activities of its sellers, EBay is in fact adversarial and uncooperative towards the VeRO rights owners who, in good faith and under possible penalty for perjury, report violations of copyright and trademark laws to EBAY.

    If you are not as big and as profitable as Tiffany, EBay will simply ignore your claims of trademark violations, responding with endless form letters and “requests for more information” when you send them obvious evidence of trademark or copyright infringement.

    I am often forced to send several increasingly threatening letters to get a copyright infringer taken down. EBay punishes its sellers when they copy from each other, but looks the other way when they copy from legitimate vendors with registered copyrights. Although their auctions expire in as little as 24 hours, it is difficult to get them to act promptly. They present endless stumbling blocks to safeguard their sellers. They never seem to sanction a seller for copyright violations, even after many repeated takedown notices.

    Although EBay often stalls in taking action against trademark and copyright infringers, they do provide the private account information of their sellers to VeRO participants. They do so quite promptly. Never mind that many of these sellers provide false names and account information. The use of PayPal generally insures that there is a long paper trail for illegal activities.

    As a VeRO program participant, I have sometimes sent the names (real identities) of EBay sellers on to their local police departments. U.S. Police Departments simply send back form letters telling you that they don’t believe the case is in their jurisdiction.

    GOD BLESS CANADA. When I sent information to the Edmonton (Alberta) Police Department about EBay seller ProRSumGurl, she was immediately busted, ending a four year crime spree against her employer. A police detective from Edmonton called me up and thanked me for my help. ProRSumGurl’s account on EBay has been inactivated, but you can still see that she had 100% positive feedback on EBay and was a Power Seller. According to the Edmonton police detective, she is a first offender, but is likely to serve time in prison.

    Although I have heard nothing from EBay to confirm this, my activities to identify sellers of stolen and counterfeit art materials on EBay seem to have brought some action from EBay itself. Since the arrest of ProRSumGurl in October of 2008, many of the largest sellers of art supplies on EBay, sellers who I believe are running large fencing operations, have disappeared from EBay listings. I believe that my identification of this Canadian seller and the cooperation of Canadian law enforcement prompted EBay to pay attention to my claims about other EBay sellers of art materials.

    • January 1, 2009 at 8:59 pm #

      Howard, thank you for this great comment, which deserves its own post (and may yet get it). The experiences you describe are entirely consonant with what I saw in the past as counsel for probably the largest two victims of trademark counterfeiting on eBay — fundamentally, the appearance of cooperation, but mainly evasion, stalling and avoidance of responsibility.

  5. January 3, 2009 at 8:41 pm #

    Ron, I certainly appreciate the opportunity to express myself here, to the audience you have. I have a lot of stories to tell about EBay.

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