On-line auction sites have become a popular method for selling, buying or bidding for many consumer items. This raises questions about the sale of counterfeit or infringing goods being provided by anonymous sellers via on-line auction sites. Often the on-line auction site is sued for direct and contributory trademark infringement.
However, this raises concerns about shutting down an entire on-line auction site due to a few bad actors or anonymous sellers. In Tiffany v. E-bay, the court dealt with this scenario and found that E-bay was not liable to Tiffany on its claims of direct trademark infringement, contributory trademark infringement, dilution, unfair competition or false advertising.
The Court focused on E-bay’s extensive policies for investigating, reporting and removal of infringing or counterfeit goods from its sites. The Court also went to on to find that the sale of actual Tiffany goods was protected under the nominative fair use defense. Thus, on-line auctions sites were protected assuming they met their affirmative duty to police the sale of infringing and counterfeit goods.
This ruling will provide for an increase in the number of on-line auction sites and allow for numerous resell opportunities. Whether you are the trademark owner, a consumer or an on-line auctioneer, understanding trademark law and how it impacts your business practices or purchasing behavior is crucial to avoiding liability for trademark infringement.
If you have any concerns or questions regarding these matters, then please feel free to contact us.