Tag Archives: Tiffany

Costco neko wo kamu

Originally posted 2013-03-15 09:57:30. Republished by Blog Post Promoter

BrozikIf Tiffany was miffed at Costco before, it’s positively infuriated now.

You will recall that on February 14 the high-end jeweler Tiffany & Co. sued the decidedly-not-high-end warehouse club Costco, alleging that the latter was describing certain diamond rings as “Tiffany” rings in at least one of its locations, thus infringing upon the trademark rights of the former. For a refresher, see here.

What struck this writer as interesting about the otherwise not especially remarkable matter is the barely-concealed disdain for the defendant and its merchandise-for-the masses business model permeating the federal court complaint of the elite plaintiffs. Tiffany made an effort at civility in its initial filing… but now the kid gloves are off. Costco has asserted a counterclaim—and that counterclaim has already gotten Tiffany’s goat.

tiffany_130216_wgThe gist of Costco’s counterclaim is that notwithstanding the registrations held by Tiffany & Co. for various trademarks that include the name Tiffany for use with regard to jewelry products, the term “Tiffany” is generic for a type (or set of types; it’s not quite clear)  of diamond ring setting, such that anyone must be permitted to use the term (inasmuch as anyone may sell a diamond ring with that certain kind of setting). Costco’s Answer and Counterclaim reads, in pertinent, unrepentant part:

Costco asks the court to order that the Plaintiffs [Tiffany and Company and Tiffany (NJ) LLC] be prohibited and enjoined from ever again asserting false claims of right to exclude use of Tiffany as a generic term for a style or type of ring setting. *** Costco seeks a judgment declaring invalid, and ordering modified or partially cancelled, federal trademark registrations which the Plaintiffs have put forward as purportedly evidencing or supporting false claims of right to prevent Costco and other retailers from using the word Tiffany to indicate that a ring has a Tiffany setting, i.e., a setting comprising multiple slender prongs extending upward from a base to hold a single gemstone….

There’s a Japanese proverb—kyuuso neko o kamu: A cornered rat will bite the cat. Tiffany put Costco in the corner, and now Costco is attempting to bite off part of Tiffany’s trademark portfolio. Tiffany might come to find that it would have been better off letting sleeping dogs… er, you know what? Enough with the animal metaphors. Tiffany could regret suing Costco, if Costco’s possibly-desperate defense holds water.

Tiffany replied a couple of days ago, March 14, to Costco’s answer and counterclaim, filed on March 8th. Tiffany asserts in its answer to Costco’s counterclaim that Costco’s signage did not indicate that the offending rings sold in Costco warehouses (not manufactured by Tiffany) had “Tiffany settings” but rather appeared to describe each ring as a “TIFFANY… DIAMOND RING.” A good point—but now there are two issues. Read More…

Poor eBay!

Originally posted 2011-04-27 17:02:13. Republished by Blog Post Promoter

ebay-logo-02News 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.

 

Best of 2011: Poor eBay!

First posted April 27, 2011.ebay-logo-02

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.

10 Years of LIKELIHOOD OF CONFUSION®

10 Years of LIKELIHOOD OF CONFUSION®

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: Read More…

We can infringe upon you wholesale

Brozik

[Editor’s note:  When this was first posted, I — not Matthew, I, Ron Coleman — failed to utilize the drop-down box and make sure that MDB showed as the author of this piece, probably thinking that the picture at left would do the trick.  Based on some blog posts, um, it didn’t.  Sorry to all concerned!]

On Valentine’s Day, appropriately enough perhaps, Tiffany (the jeweler, not the singer) filed a complaint against Costco in the United States District Court for the Southern District of New York, asserting a variety of trademark-related causes of action. The lawsuit is not extraordinary by any means. The alleged facts, summarized below, are not scandalous, even if they describe an underhanded practice:

A woman complained to Tiffany & Co. about something she had seen at a Costco warehouse in Huntington Beach, California—to wit: diamond rings for sale, described in signage at the display case as “Tiffany” rings. (The woman was reportedly “disappointed” by her “observ[ation].”)  Costco investigated and confirmed what the woman had described: Costco was selling jewelry (mis)labeled as Tiffany items. (A saleswoman referred to the rings as “Tiffany” rings, and said that the store generally carries only one of each at a time.)

But Tiffany has never permitted its merchandise to be sold by Costco; apparently, something was amiss. The items sold by Costco were not in fact Tiffany items—not even in the way that other higher-end watches, for instance, sold by Costco are the real things (even if not every higher-end watchmaker is happy about it; see Omega S.A. v. Costco Wholesale Corp., the Ninth Circuit matter addressing whether the first-sale doctrine is a defense against claims of infringing distribution and importation for unauthorized sale of authentic items incorporating designs protected by copyright.) Tiffany found that Costco was selling the items in question online as well, but not labeled “Tiffany” there.

Tiffany confronted Costco with its discovery, and Costco immediately removed all misleading signage. The damage had been done, however. The complaint alleges (or at least suggests) that the offending practice was not limited to the Huntington Beach warehouse, but rather was widespread throughout Costco’s locations nationwide, for many years. “There are now,” according to the complaint, “hundreds if not thousands of people who mistakenly believe they purchased and own a Tiffany engagement ring from Costco.”

So what makes this case interesting? A few minor things, to my mind, and one more significant. Read More…

Best of 2011: Poor eBay!

First posted April 27, 2011.ebay-logo-02News 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

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.

Forget breakfast — eBay eats Tiffany’s lunch

Tiffany's NYCThe 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…