Thursday, February 02, 2006

Tiffany sues eBay

Apart from eBay's problems with MercExchange, eBay has been sued by Tiffany & Co., concerning allegations that eBay is selling a large fraction of counterfeit merchandise.

From yahoo.news:

The landmark lawsuit also alleges that eBay, in addition to facilitating sales of fake Tiffany goods, also makes millions of dollars from fees charged for counterfeit sales.

Two years ago, Tiffany bought several hundred items on eBay and found that three quarters of the items purchased were counterfeit.

The Tiffany lawsuit, which originally was filed in 2004 in a New York State court, is expected to go to trial by the end of this year, according to press reports.

Death Blow

If Tiffany wins its case, eBay's business model could suffer a severe blow, as this would open the door for other brand owners to sue it over counterfeit sales.

But eBay claims it is only a marketplace that brings together buyers and sellers, and cannot be held responsible for sales of counterfeit items.

"We are disappointed that Tiffany filed the suit, given that we have cooperated with their brand-protection efforts for several years through our Verified Rights Owner (VeRO) program," said Hani Durzy, an eBay spokesperson. "Through VeRO, we have worked with Tiffany to develop substantial proactive monitoring efforts and given them the tools to report problem listings, which we promptly remove."


It's somewhat ironic that the eBay brief in the MercExchange case (page 40) contains a "fake" reference, alleging that Quillen and Webster estimated the patent approval rate to be 97%. In fact, Quillen and Webster proposed a range of possible approval rates, from 80 to 97%. Footnote 17 of the Quillen and Webster paper made clear that the upper bound of 97% was not correct.

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