(CN) – eBay is off the hook on claims that it deceived customers by allowing counterfeit Tiffany jewelry to be sold on its website, a federal judge in Manhattan ruled.
The famous jeweler claimed that hundreds of thousands of counterfeit Tiffany silver jewelry items were offered for sale on eBay from 2003 to 2006.
U.S. District Judge Richard J. Sullivan dismissed most of Tiffany & Co.’s claims in 2008, saying the case centered on who should bear the burden of policing valuable trademarks online.
The 2nd Circuit upheld most of Sullivan’s opinion, but sent part of the case back to the federal judge to re-examine Tiffany’s false advertising claim, which was based on the claim that eBay advertised selling Tiffany goods on its website, despite knowing that “a substantial portion” of the merchandise was counterfeit.
“Although eBay was aware that a portion of the Tiffany’s goods sold on its website were counterfeit, nothing in the record indicates that eBay was aware that consumers were being misled by eBay advertisements,” Sullivan determined on remand.
Sullivan found “insufficient evidence in the extensive trial record” to back up Tiffany’s post-appeal argument.
“Plaintiffs cite only three categories of evidence as proof that customers were actually misled by eBay’s advertisements,” the judge wrote. “The declarations of three eBay customers who believed that they bought counterfeit Tiffany goods on eBay, testimony from a Tiffany employee that Tiffany had received numerous emails complaining of counterfeit Tiffany goods of eBay, and 125 emails sent by customers to eBay complaining of counterfeit Tiffany goods.
“Even this evidence – deficient as it is to show the effect of the advertisements on consumers in general – does not reveal that any consumer was misled by eBay’s advertisements (emphasis in original).
“In fact, none of the three declarations submitted by the eBay customers refers to any eBay advertisements for Tiffany goods,” the ruling states.
In his ruling two years ago, Judge Sullivan noted that the online auctioneer made substantial investments in anti-counterfeiting initiatives.
“EBay has invested as much as $20 million each year on tools to promote trust and safety on its website,” Sullivan wrote.
Tiffany, on the other hand, “invested relatively modest resources to combat the problem” of online counterfeiting, he wrote.
In 2003, he said, Tiffany budgeted about $763,000 to the issue, representing less than 0.05 percent of its net sales for that year.