Tag Archives: eBay

Lady calls me up…

Did you ever wonder what happened in the Val Colbert declaratory judgment action against Chanel?  Yeah, I forgot about it too, and evidently I was not alone.  Because something did happen, and no one seemed to notice.

But more about that in a minute.  Here’s why I even thought of it.

Lady calls me up — can I do anything for her?  She sells, or some else sells but she sells them for her, or the other way around — anyway, they were these listings on eBay.  For buttons that were removed from authentic designer clothing.  In other words, authentic designer buttons, being sold detached from the clothing they came in with.

And eBay, it appears, removed these listings, and there ought to be a law!

There is a law, actually.  It’s the law of contracts, and, all things being equal (yes, they never are, but let us say it), it’s the law that governs almost everyone’s relationship with eBay, which is a private company.  Your contract with eBay, as a seller or a buyer, is of course subject to its rules and regulations.  And just like Mom’s and Dad’s rules and regulations, and those of almost any private party that are not restricted by the criminal law or civil rights concerns, those rules can be whatever the parties agree to.  Or, in the case of eBay, whatever anyone who wants to play has to agree to, because for most of us, eBay will not negotiate.

eBay will negotiate with others, however — others who are not like you and me because they are rich , if only (though seldom only) in brand equity.  These parties have, at least in theory, the ability to upset the nice way it’s going for eBay, litigation-wise, on IP issues such as secondary liability for trademark infringement.

And these parties, many of whom are designers, really really really hate it when people do anything — anything! — well, anything other than burn it up or shoot it into outer space — with the hardware, buttons or other stuff bearing their logos but not the stuff they were originally attached to.  I should not have to explain why they hate this.  And by all indications, they have made this fact clear to eBay, which, despite what you think, mostly wants to work with these outfits.  For the goose does continue to lay very nicely the golden eggs.

ebay-logoAnd eBay hears it.

So, we know, again, that eBay can remove your listing for any reason or for no reason, almost all the time.  Many of the reasons it does have for such removals do exist, however, and they have to do with intellectual property — and not always with infringement, much less counterfeiting.  No, your authentic stuff may be pulled from eBay even though it is authentic, as eBay explains:

If we removed your listing, it’s probably because it either violated the law or one of our policies. Or, it may have been removed because the item’s rights owner (for example, Coach or Louis Vuitton) asked us to remove it. This can happen even if your item is genuine.

So how about the buttons, the ribbons, the hardware?  For your non-listing pleasure,  here is the specific rule that you agreed to when you agreed to sell on eBay which addresses that question: Read More…

Best of 2010: Forget breakfast — eBay eats Tiffany’s lunch

Originally posted 2010-12-23 08:00:54. Republished by Blog Post Promoter

Tiffany's NYC The Second Circuit, unsurprisingly according to most commentators, has affirmed the decision of the Southern District of New York refusing to find eBay liable for contributory trademark infrintgement in the Tiffany v. eBay case.  I have been following the case since before it was filed (yeah, bitter as usual!) and have written bunches of posts on it — see, look?

In terms of the Second Circuit opinion itself, you can find that here.  If at some point I have something really original to say about it–after all the blogging is done by everyone else–you’ll be the first to know.  But here’s a little roundup of “takes.” First, the WSJ Law Blog on the thrust of the story:

So long as eBay takes steps to remove listings it knows are bogus — and isn’t otherwise willfully blind to fraudulent sales — it can avoid liability, the court ruled.  Judge Robert Sack, writing for the three-judge panel, seemed to hang his hat on the “market”:

We are disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their Web sites . . .

EBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay. The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort. . . .

Tiffany had argued that eBay knew it had a problem with counterfeit items being listed on its Web site and did little to clean it up. EBay insisted the obligation rested with the New York jeweler to identify and alert it to auctions of counterfeit Tiffany silver jewelry.

But that’s not the whole story, exactly, though it mostly is.  As Law.com’s Corporate Counsel explains:

The court sent the case back to the district level for more discussion of whether eBay may be guilty of false advertising because it promotes the presence of “Tiffany” products on its site in both direct advertisements and paid ads that pop up when users search for Tiffany on Google and other search engines.

Those ads could be deemed false, because eBay is aware that “a significant portion” of goods advertised as Tiffany items on eBay are actually counterfeit, the court said. (The exact percentage of counterfeit Tiffany items among all those advertised is in dispute). EBay has pointed out that its site contains a special “About Me” page for Tiffany (and controlled by Tiffany) in which users are told that any Tiffany item advertised for sale on eBay is likely to be a fake.

To win a false advertising claim, Tiffany will have to produce evidence that consumers were confused by the advertisements, the court said. So far, Tiffany has not produced that sort of evidence, which usually comes in the form of consumer surveys.

Usually?  Well, usually if anyone’s actually watching, I guess.  Anyway, some more–here’s a great article by a partner at Pattishall McAuliffe (the law firm that bears the name of my late trademark law prof)  named Uli Widmaier that gets to the heart of the matter (I’ve removed the citations for bloggy reading and added a link or two):

In other words, for a defendant to be liable for contributory trademark infringement, the defendant must have knowledge of specific individuals engaged in infringing activities. General knowledge that infringing activity might take place is not enough. This is an application of the “narrow standard” of contributory liability articulated in Inwood Laboratories, Inc. v. Ives Laboratories, Inc. eBay argued in the district court that this standard did not apply, but accepted the Inwood standard for purposes of the appeal.  Thus, the Court “assume[d] without deciding that Inwood’s test for contributory trademark infringement governs.

Tiffany had also argued that eBay was “willfully blind” as to the sale of counterfeit Tiffany goods on eBay’s website. The Court stated that, as a general matter, “[a] service provider is not, we think, permitted willful blindness. When it has reason to suspect that users of its service are infringing a protected mark, it may not shield itself from learning of the particular infringing transactions by looking the other way.” However, the Court declined to impose liability for contributory trademark infringement on this ground because “eBay did not ignore the information it was given about counterfeit sales on its website.”

In sum, the Second Circuit affirmed that a service provider is not permitted to be willfully blind to alleged trademark infringement. But eBay’s removal of listings identified as counterfeit by Tiffany, as well as eBay’s affirmative steps to police its website for counterfeiters were enough to render eBay not willfully blind. Had eBay done less, it might have been found liable. Unfortunately, the decision gives very little guidance as to the dividing line between “willful blindness” and sufficient vigilance.

Great point.  There’s something about trademark law that, for some reasons, makes judges want to make lawyers and businesses guess about liability until it’s too late.  As usual, Eric Goldman gets that, too: Read More…

eBay appeal: The gang’$ all here

Originally posted 2008-12-09 14:37:21. Republished by Blog Post Promoter

Eric Krangel reports that Amazon and Google join in on the Tiffany v. eBay appeal:

It’s not hard to see where the interest is coming from: A ruling against eBay could have ramifications for Amazon Marketplace or Google Checkout as well.

Yes, ramifications indeed.  We contentiously reported earlier developments here.  Thinking this morning about the issues discussed at that first post, as well as subsequent discussion in the comments, we formulated the following possible way of stating our problem with the “what do you want eBay to do, anyway?” argument:

If you have a small business such as a flea market or are the landlord of a retail establishment, and are “willfully blind” to infringement taking place on your premises, and you profit from that activity, you may be held liable for indirect infringement.

But if you build a large enough business, in whole or part, on infringement — no problem!  What do you want us to do, anyway?

Best of 2011: Poor eBay!

First posted April 27, 2011.

News item:

eBay just reported first quarter earnings today posting revenue of $2.5 billion, an increase of 16% from the same period of 2010. eBay’s net income on a GAAP basis of $475.9 million, or $0.36 per diluted share, and non-GAAP net income of $619.0 million, or $0.47 per diluted share, representing a 12% increase compared to the same period of 2010. The retail giant narrowly beat analyst expectations, which were 46 cents per share on revenues of $2.48 billion. eBay says that the first quarter increase in earnings was due primarily to sales growth and a lower effective tax rate.

Nice!  I wish I had one of those.

But it does bring to mind the following bunch of words I do have, and which I wrote on this very place in space, on the topic of eBay’s essentially unconditional non-liability for contributory trademark infringement in connection with the sale on eBay of counterfeit goods:

Willful blindness, evidently, is a good standard to spank flea market zhlubs who “should have known” vendors who rent tables from them are selling counterfeit goods.   It doesn’t apply, however, to billion-dollar companies that are “too big to be liable” as contributory infringers or even  accountable after the fact on some level (disgorgement?)  for the millions they rack up in commissions on counterfeit sales.

Ah, yes, but doesn’t the Circuit say, as quoted above?:

But we are also disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their websites. eBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay.  The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort.

 

I’m disposed to think exactly the opposite–because:

  1. the law will not punish them for failing to do so;
  2. notwithstanding “many complaints” (it’s that Lanham Act “rigor” at work once again!),  most buyers of counterfeits want to buy counterfeits.  It’s not a matter of quality control:   These days, everyone except Archie Bunker who spends $45 for a “Romex” knows exactly what he’s buying.  But unless and until “private market forces” eliminate trademark law, notwithstanding that the sale of a fake Rolex or Tiffany item is entirely between “consenting adults,” it’s still an unlawful transaction;
  3. the “millions of dollars” spent by eBay was spent precisely to obtain an opinion like this by a court that doesn’t really “get it”; and
  4. eBay makes money selling counterfeits!  Even the Circuit had to acknowledge this fact, which it does in a little-bitty footnote and then completely ignores.

Yes, they make a lot of money, they do, at eBay.  Why the company is exempt from any responsibility to compensate victims of trademark infringement via a system it has established — notwithstanding their notice-and-takedown system — merely because it has spent “millions” on trying, a number that is both vague and which the court made no attempt to relate to the profits or the damages involved, remains beyond my understanding.

 

eBay beats the gripe rap

Originally posted 2006-08-10 23:24:50. Republished by Blog Post Promoter

Eric Goldman reports on a California case that holds eBay not liable for bum feedback:

This risk of liability is the dark side of the “Web 2.0″ and the emphasis on “user-generated content.” It’s all fun and games until someone serves a subpoena–and when users realize that responding candidly to those seemingly innocuous requests for feedback might lead to the courthouse, we should expect to see either platitudes or silence.

As usual I like Eric’s comment, but I don’t understand this one.  It’s when the subpoena is served that the fun and games start!
Essex County Hall of Records
Maybe he just doesn’t know what fun is.

Poor eBay!

News item:

eBay just reported first quarter earnings today posting revenue of $2.5 billion, an increase of 16% from the same period of 2010. eBay’s net income on a GAAP basis of $475.9 million, or $0.36 per diluted share, and non-GAAP net income of $619.0 million, or $0.47 per diluted share, representing a 12% increase compared to the same period of 2010. The retail giant narrowly beat analyst expectations, which were 46 cents per share on revenues of $2.48 billion. eBay says that the first quarter increase in earnings was due primarily to sales growth and a lower effective tax rate.

Nice!  I wish I had one of those.

But it does bring to mind the following bunch of words I do have, and which I wrote on this very place in space, on the topic of eBay’s essentially unconditional non-liability for contributory trademark infringement in connection with the sale on eBay of counterfeit goods:

Willful blindness, evidently, is a good standard to spank flea market zhlubs who “should have known” vendors who rent tables from them are selling counterfeit goods.   It doesn’t apply, however, to billion-dollar companies that are “too big to be liable” as contributory infringers or even  accountable after the fact on some level (disgorgement?)  for the millions they rack up in commissions on counterfeit sales.

Ah, yes, but doesn’t the Circuit say, as quoted above?:

But we are also disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their websites. eBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay.  The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort.

 

I’m disposed to think exactly the opposite–because:

  1. the law will not punish them for failing to do so;
  2. notwithstanding “many complaints” (it’s that Lanham Act “rigor” at work once again!),  most buyers of counterfeits want to buy counterfeits.  It’s not a matter of quality control:   These days, everyone except Archie Bunker who spends $45 for a “Romex” knows exactly what he’s buying.  But unless and until “private market forces” eliminate trademark law, notwithstanding that the sale of a fake Rolex or Tiffany item is entirely between “consenting adults,” it’s still an unlawful transaction;
  3. the “millions of dollars” spent by eBay was spent precisely to obtain an opinion like this by a court that doesn’t really “get it”; and
  4. eBay makes money selling counterfeits!  Even the Circuit had to acknowledge this fact, which it does in a little-bitty footnote and then completely ignores.

Yes, they make a lot of money, they do, at eBay.  Why the company is exempt from any responsibility to compensate victims of trademark infringement via a system it has established — notwithstanding their notice-and-takedown system — merely because it has spent “millions” on trying, a number that is both vague and which the court made no attempt to relate to the profits or the damages involved, remains beyond my understanding.

 

eBay wins Tiffany case

Originally posted 2008-07-14 16:10:07. Republished by Blog Post Promoter

Reuters reports that Tiffany’s gamble has not paid off:

EBay Inc scored a major legal victory on Monday, when a federal judge ruled that Tiffany & Co failed to prove the online auctioneer was responsible for the sale of fake Tiffany jewelry on its website.

“The Court concludes that Tiffany has failed to meet its burden in proving its claims,” wrote U.S. District Judge Richard Sullivan in his opinion.

“Given Tiffany’s choice to sue eBay, rather than individual sellers, and this Court’s conclusion that eBay does not continue to supply its services to those whom it knows or has reason to know are infringing Tiffany’s trademarks, Tiffany’s claims against eBay must fail,” wrote the court.

The decision is here.

UPATE:  An eBay liability roundup here.

UPDATETER:  And a post-affirmation summary, and assessment, here.

Home cookin’ a la mode, with a most undeserving dessert

Originally posted 2008-07-01 02:15:56. Republished by Blog Post Promoter

From the WSJ Law Blog:

A French court today cracked down on counterfeits — and an outlet that sells them — ordering eBay to pay Louis Vuitton and other luxury brands — Kenzo, Guerlain, Dior and Givenchy — $63.1 million in damages for auctioning fake goods. Here’s the early story from WSJ. . . .

“I was really surprised by the number,” J. Michael Huget, the head of IP at Butzel Long, told the Law Blog. “There’s definitely a hometown flavor to it. I don’t know how you get there on a disgorgement of profit basis, unless there’s some unique penalty provision that exists under French law. But even with that, it’s not like it’s a company that’s gone over there and hurt people. You don’t want to discount the value of a brand, but that’d be a huge number even in our system.”

Well, unless there’s some, like, Frenchie legal reason for it, yeah? I’d run that down. Genuine expertise demonstrated by Butzel Long, and crack reporting there by the WSJ! I blame the reporter more than I do Michael Huget. Wouldn’t want to have to dial another number and risk finding out that law part.

On the other hand… “it’s not like it’s a company that’s gone over there and hurt people”? Oh, is that the test, then, given what we… know? … about French law? Remember, Michael, what our teeny dollars look like to Europeans!

Oh, all right. It does sound like a huge number. Yet on the other hand — hometown-wise, frankly I couldn’t blame the French (yes, I did just write that) for getting the impression that there’s only one way to get eBay’s attention?

Having said all that — this is actually really troubling:

As for perfumer-plaintiffs Kenzo, Guerlain, Dior and Givenchy, the judge ruled that, even though the perfumes sold by eBay were legitimate, the company was liable for unauthorized sales. LVMH strictly limits their distribution to authorized dealers such as perfume chains and department stores.

Oh no. No!!!!!!  Now what do I do?!

(Jaunty beret-tip to Marty.)

Forget breakfast — eBay eats Tiffany’s lunch

Tiffany's NYC The Second Circuit, unsurprisingly according to most commentators, has affirmed the decision of the Southern District of New York refusing to find eBay liable for contributory trademark infrintgement in the Tiffany v. eBay case.  I have been following the case since before it was filed (yeah, bitter as usual!) and have written bunches of posts on it — see, look?

In terms of the Second Circuit opinion itself, you can find that here.  If at some point I have something really original to say about it–after all the blogging is done by everyone else–you’ll be the first to know. But here’s a little roundup of “takes.” First, the WSJ Law Blog on the thrust of the story:

So long as eBay takes steps to remove listings it knows are bogus — and isn’t otherwise willfully blind to fraudulent sales — it can avoid liability, the court ruled.  Judge Robert Sack, writing for the three-judge panel, seemed to hang his hat on the “market”:

We are disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their Web sites . . .

EBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay. The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort. . . .

Tiffany had argued that eBay knew it had a problem with counterfeit items being listed on its Web site and did little to clean it up. EBay insisted the obligation rested with the New York jeweler to identify and alert it to auctions of counterfeit Tiffany silver jewelry.

But that’s not the whole story, exactly, though it mostly is.  As Law.com’s Corporate Counsel explains:

The court sent the case back to the district level for more discussion of whether eBay may be guilty of false advertising because it promotes the presence of “Tiffany” products on its site in both direct advertisements and paid ads that pop up when users search for Tiffany on Google and other search engines.

Those ads could be deemed false, because eBay is aware that “a significant portion” of goods advertised as Tiffany items on eBay are actually counterfeit, the court said. (The exact percentage of counterfeit Tiffany items among all those advertised is in dispute). EBay has pointed out that its site contains a special “About Me” page for Tiffany (and controlled by Tiffany) in which users are told that any Tiffany item advertised for sale on eBay is likely to be a fake.

To win a false advertising claim, Tiffany will have to produce evidence that consumers were confused by the advertisements, the court said. So far, Tiffany has not produced that sort of evidence, which usually comes in the form of consumer surveys.

Usually?  Well, usually if anyone’s actually watching, I guess.  Anyway, some more–here’s a great article by a partner at Pattishall McAuliffe (the law firm that bears the name of my late trademark law prof)  named Uli Widmaier that gets to the heart of the matter (I’ve removed the citations for bloggy reading and added a link or two):

In other words, for a defendant to be liable for contributory trademark infringement, the defendant must have knowledge of specific individuals engaged in infringing activities. General knowledge that infringing activity might take place is not enough. This is an application of the “narrow standard” of contributory liability articulated in Inwood Laboratories, Inc. v. Ives Laboratories, Inc. eBay argued in the district court that this standard did not apply, but accepted the Inwood standard for purposes of the appeal.  Thus, the Court “assume[d] without deciding that Inwood’s test for contributory trademark infringement governs.

Tiffany had also argued that eBay was “willfully blind” as to the sale of counterfeit Tiffany goods on eBay’s website. The Court stated that, as a general matter, “[a] service provider is not, we think, permitted willful blindness. When it has reason to suspect that users of its service are infringing a protected mark, it may not shield itself from learning of the particular infringing transactions by looking the other way.” However, the Court declined to impose liability for contributory trademark infringement on this ground because “eBay did not ignore the information it was given about counterfeit sales on its website.”

In sum, the Second Circuit affirmed that a service provider is not permitted to be willfully blind to alleged trademark infringement. But eBay’s removal of listings identified as counterfeit by Tiffany, as well as eBay’s affirmative steps to police its website for counterfeiters were enough to render eBay not willfully blind. Had eBay done less, it might have been found liable. Unfortunately, the decision gives very little guidance as to the dividing line between “willful blindness” and sufficient vigilance.

Great point.  There’s something about trademark law that, for some reasons, makes judges want to make lawyers and businesses guess about liability until it’s too late.  As usual, Eric Goldman gets that, too: Read More…

“Just taking orders” doesn’t cut it for eBay in Germany

eBay evidently got rocked by Rolex* in its German litigation this year, and we may never have heard about it if not for a securities filing by the online auctioneer. The claim, of course, was for contributory infringement.

“The court’s decision found that eBay must take reasonable measures to prevent recurrence once it is informed of clearly identified infringement,” eBay said in a quarterly regulatory filing with the U.S. Securities and Exchange Commission.

“eBay may in certain circumstances be liable upon first notice of infringement,” the filing added.

The Europeans are a lot less the surrender-monkeys we make them out to be when it comes to this stuff — and a lot less the surrender monkeys than our own courts are.

* A LOC client, but I was not at all involved in this European litigation.