|Tiffany & Co Argues eBay is Distribution Network For Counterfeits |
For years, eBay has defined itself simply as an online marketplace that links buyers and sellers.
But in a weeklong bench trial in Federal District Court in Manhattan that ended last Tuesday, lawyers for Tiffany & Company argued that the online auction house was far more than that: it is a distribution network that enables the trading of counterfeit Tiffany items.
If Tiffany wins its case, not only could other lawsuits follow, but eBay’s business model could be threatened because it would be difficult and extremely expensive for the company, based in San Jose, Calif., to police a site that now has 248 million registered users worldwide and approximately 102 million items for sale at any one time.
Tiffany & Co Argues eBay is Distribution Network For Counterfeits [nytimes.com]
Hard to disagree with that. However since Google's not at fault for cached pages it crawls and publishes, Youtube seems to get away with copyrightten content, and forum owners tend not to be at fault for user generated content, I'd expect that ebay will persevere.
If you rented space somewhere and sold counterfeit items the person renting the space to you wouldn't be liable, you would. I don't see why E-Bay should be any different, just like the music industry they are attempting to get someone else to do the work of protecting their products for them.
Here's the part that interested me:
|Mr. Potter [Geoffrey Potter, chairman of the anticounterfeiting practice at Kramer Levin Naftalis & Frankel, a New York law firm.] said that if the judge found that eBay had the same duty as flea markets and traditional retail stores to not sell counterfeit products, “eBay will likely have to either stop auctioning famous luxury products or radically alter the way it does business so that it can precertify the authenticity of those products.” |
eBay sure looks like an online flea-market, especially with the "buy it now" function. Flea markets have individual vendors come in to sell products....
On the auction side... what responsibility do auctioneers have to certify an item's authenticity when something goes on the auction block? Doesn't that come down to the seller?
I think where eBay can come unstuck here is that they have been happy to keep taking money out of their business.
They only really employ technical people.
If they were to employ some 'experts' for each major section they could hugely clean up their auctions.
This would also give them the argument in court that they are showing due diligence and really trying to clean things up.
The area I use is full of blatant fraud and misselling.
I once discussed with an ebay rep just how easily someone could clean that whole category up.
It would also give potential buyers more confidence and help combat the notion amongst serious potential buyers that the site was a joke!
|If you rented space somewhere and sold counterfeit items the person renting the space to you wouldn't be liable, you would. |
Net necessarily so. Flea market owners have in fact been found liable for contributory copyright infringement. I recall one such recent case locally. If you do a search, you will find many.
|On the auction side... what responsibility do auctioneers have to certify an item's authenticity when something goes on the auction block? Doesn't that come down to the seller? |
Do a search. Again, you will find many cases where auctioneers have been found liable.
In both cases, I think the extent of the flea market's or auctioneer's knowledge and involvement is at issue. Do they promote their service, either explicitly or implicitly to fraudsters? What percentage of their business is in fraudulent sales? Is the business dependent on fraudulent sales to an extent that the business would not otherwise be viable, such that it would be impossible for a prudent and aware business to be unaware of this dependency?
I think the latter is eBay's real problem. I doubt they could survive without the sales of fraudulent and misrepresented goods, which seem to represent the majority of goods in some categories.
One reason why I won't buy expensive consumer goods on eBay: one investigator made a buy from multiple eBay vendors of the top 5 Bluetooth headsets. More than half were fakes.
Thanks, I'll stick to $5 charging cables.
Here's a study by the Trademarks and Unfair Competition Committee of the New York City Bar that should be of interest:
Online Auction Sites and Trademark Infringement Liability [abcny.org]
eBay has provided brand owners with a variety of options and services to minimize fraud. It seems some brand owners are happy to do that, while others want to stick eBay with the responsibility.
In some cases, I think the brand owner is using fraud-related legal action to close down the secondary market for legitimate branded products. If you can't buy a Coach purse from someone who used it for a few months, you'll have to go to the store and buy a new one. The case has been made that a vigorous secondary market is GOOD for retailers (I might be more likely to buy a costly item if I knew I could use it gently for a while and get half or more of my money back), but not all manufacturers buy that argument.
I don't see why a manufacturer would care that people were selling used items it had produced. And I do not see where Tiffany complained about used Tiffany items being sold. They're complaining that more the half of the jewelry being sold as Tiffany on ebay is fake. I can see being angry about that if you are a manufacturer.
At the same time, IME there is a huge amount of fakery and lying going on with ebay sellers that ebay cares nothing about. And this is by no means confined to electronic junk or designer handbags. Just stroll around the Antique listings and see how many items were made yesterday from a kit and are being sold as "PRIMITIVE" or "FOLK ART" or even "OUTSIDER ART" antiques. In order to view any actual antiques, you have to exclude all those words from your searches. In popular art pottery subcategories, there are tons of Chinese knockoffs being sold as the real thing. Then there are the enormous numbers of Chinese sellers hawking Tibetan and Chinese "antiques" for 99 cents each. These appear to either be stolen, manufactured yesterday in a sweatshop, or an excuse to collect your credit card details.
Ebay doesn't do anything about this, so it must be okay with them.
as for eBay being compared to a flea market...
I don't know about everyone else, but where I live, the flea market's main purpose is being "The" place to get your fake designer items. So to me, if they are to be considered a flea market, they are doing their job. :P
|I don't know about everyone else, but where I live, the flea market's main purpose is being "The" place to get your fake designer items. |
No kidding. If I had a nickel for every fake pair of Oakleys I saw at a flea market, I'd be able to buy a REAL pair of Oakleys.
Nobody should be buying high priced ANYTHING from Ebay anyway. I've already learned my lesson in spades with that. Feedback or not, it's really hard to get any real kind of feel on whether what you are being sent is either completely operational or authentic. Sometimes you can't even blame the sellers, as they are commonly just re-selling items they get from someplace else.
|If they were to employ some 'experts' for each major section they could hugely clean up their auctions. This would also give them the argument in court that they are showing due diligence and really trying to clean things up. |
On the other hand, maybe they're better off taking a "know what you're buying before you bid approach."
If eBay starts representing itself as a defacto nanny for buyers who want someone to kiss it and make it better after they skin their knees, they will never be able to meet the incredible expectations people will impose. And the lawsuits will arrive by the truckload.
Every second hand store, pawn shop, or consignment shop in the US and Canada is subject to a myriad of laws designed to prevent them from becoming, wittingly or unwittingly, a fencing operation.
eBay should be no different.
For eBay to survive, it must live up to the same reputational guarantees that are afforded pawn shops, second hand stores and consignment shops.
This is an area that is ripe for a new franchise system which combines reputation checks, eBay reselling, and offline consignment/second hand shop.
But the myriad of different legal jurisdictions may well overwhelm such a project.
|Hard to disagree with that. However since Google's not at fault for cached pages it crawls and publishes, Youtube seems to get away with copyrightten content, and forum owners tend not to be at fault for user generated content, I'd expect that ebay will persevere. |
However that's one set of comparisons imo. Right or wrong, I think Tiff&co might be trying to make analogy with music industry. There were bunch of music sharing platforms that got shut down because they were deemed as "enabling distribution network" violating all kinds of terms, even though some of the music networks were user platforms and nothing more. Not sure if they will be able to make that parallel...