Tiffany (Nj) Inc. v. Ebay Inc.

600 F.3d 93 (2nd Cir. 2010)

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Nature of the Case

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Facts

D allows those who register with it to purchase goods from and sell goods to one another. D 'provides the venue for the sale [of goods] and support for the transaction[s], [but] it does not itself sell the items' listed for sale on the site, nor does it ever take physical possession of them. D allows those who register with it to purchase goods from and sell goods to one another. D 'provides the venue for the sale [of goods] and support for the transaction[s], [but] it does not itself sell the items' listed for sale on the site, nor does it ever take physical possession of them. P is a world-famous purveyor of branded jewelry. All new P jewelry sold in the United States has been available exclusively through P's retail stores, catalogs, and website, and through its Corporate Sales Department. P cannot control the 'legitimate secondary market in authentic Tiffany silver jewelry.' P merchandise was being sold on D's site. P bought various items on D and then inspected and evaluated them to determine how many were counterfeit. From 73.1% to 75.5% of purchased samples were counterfeit. The district court concluded that the Buying Programs were 'methodologically flawed and of questionable value,' and 'provide[d] limited evidence as to the total percentage of counterfeit goods available on eBay at any given time.' The court decided that during the period in which the Buying Programs were in effect, a 'significant portion of the 'P' sterling silver jewelry listed on the eBay website was counterfeit.' D spends 'as much as $20 million each year on tools to promote trust and safety on its website.' D also established a 'Trust and Safety' department, with some 4,000 employees 'devoted to trust and safety' issues, including over 200 who 'focus exclusively on combating infringement' and 70 who 'work exclusively with law enforcement.' D has computer algos that alert it to potential fraud in listings. It has also maintained and administered the 'Verified Rights Owner ('VeRO') Program' -- a ''notice-and-takedown' system' allowing owners of intellectual property rights to 'report any listing offering potentially infringing items, so that they may be removed.' D has allowed rights owners such as P to create an 'About Me' webpage on eBay's website 'to inform users about their products, intellectual property rights, and legal positions.' P maintains the Tiffany 'About Me' page. P is also given 6 to 12 hours to review listings; developing the ability to assess the number of items listed in a given listing; and restricting one-day and three-day auctions and cross-border trading for some brand-name items. The district court concluded that 'D consistently took steps to improve its technology and develop anti-fraud measures as such measures became technologically feasible and reasonably available.' D also embarked on a campaign to increase its jewelry sales and openly advertised P in that campaign. P sued D claiming that by facilitating and advertising the sale of 'Tiffany' goods that turned out to be counterfeit -- constituted direct and contributory trademark infringement, trademark dilution, and false advertising. The court decided for D and P appealed.