Intellectual Property Advisory - Does eBay Need a Disclaimer? Tiffany v. eBay, The Second Circuit Rules

When a customer only has a gambler’s chance of purchasing a genuine Tiffany product on its site, eBay might not be able to able to advertise that Tiffany merchandise is available. That’s part of what Second Circuit Court of Appeals held in its much anticipated ruling on April 1, 2010, in the Tiffany (NJ) Inc. v. eBay, Inc. case (08-cv-3947).   Click here to view the full decision.  

Tiffany sued eBay on July 15, 2004, for trademark infringement, trademark dilution and false advertising because a sizeable percentage of the Tiffany branded goods sold on eBay were fake. The trial judge in the Southern District of New York held against Tiffany on all its claims.  Tiffany appealed to the Second Circuit.

The Second Circuit agreed with the trial court that eBay was not liable for trademark infringement or dilution, either directly or contributorily, because, after all, there are some eBay sellers offering authentic Tiffany merchandise.   However, the appellate court held that eBay cannot advertise that Tiffany merchandise is for sale on its site when a large percentage, perhaps as high as 75%, were not genuine Tiffany goods. The Second Circuit noted that, “the law prohibits an advertisement that implies that all of the goods offered on a defendant’s website are genuine when in fact, as here, a sizeable portion of them are not.” The Court hinted that “a disclaimer might suffice.” It remanded the case back to the trial court for further evaluation.