eBay defeats Tiffany in counterfeit jewelry lawsuit

A judge has dismissed a claim by Tiffany that online auctioneer eBay deceived customers by allowing the sale of counterfeit Tiffany jewelry on its website.

U.S. District Judge Richard Sullivan in Manhattan rejected Tiffany's assertion that eBay engaged in false advertising, the last remaining claim after a federal appeals court on April 1 dismissed the rest of Tiffany's trademark infringement case.

Other internet companies had been watching the case to see if the courts ruled that hosts like eBay were responsible for users' trademark violations.

"Tiffany failed to establish that eBay intentionally set out to deceive the public, much less that eBay's conduct was of an egregious nature sufficient to create a presumption that consumers were being deceived," the judge wrote.

Sullivan agreed with Tiffany that eBay knew "a portion" of the goods being sold were fake, but said Tiffany failed to show that eBay's advertisements misled customers or implied that all Tiffany products sold on its website were genuine.

In its April 1 ruling, the U.S. Second Circuit Court of Appeals upheld Sullivan's July 2008 dismissal of most of Tiffany's lawsuit, saying that "eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did."