Business
Tiffany: eBay is Rat’s Nest for Counterfeiting
Tiffany, the world’s second-biggest luxury jeweler, said eBay is a “rat’s nest” for counterfeiting and urged a judge to rule that the biggest online auctioneer was liable for infringement.
Tiffany assailed eBay in a legal brief submitted Dec. 7 to U.S. District Judge Richard Sullivan in Manhattan, as the companies await his ruling in a trademark infringement trial. EBay said in its brief that it’s a “model citizen” in the fight against counterfeiting.
At issue is whether eBay must pay damages for failing to make adequate efforts to block sales of counterfeit silver jewelry. New York-based Tiffany and other retailers claim online sales of counterfeit clothes, bags and jewelry cost them about $30 billion a year.
“At some point, eBay had to have realized that counterfeiting was rampant” on its site, lawyers for Tiffany wrote in their brief. “Indeed, it was a proverbial ‘rat’s nest.’ ”
In its brief, eBay said an adverse ruling might “wreak havoc” on some Internet-based businesses. It didn’t elaborate.
Testimony concluded Nov. 20 after Tiffany Chief Executive Officer Michael Kowalski said the only effective way to fight online sales of fakes is to go after the distribution network. Sullivan said he would rule shortly.
In its brief, Tiffany said EBay, of San Jose, was legally bound to fight counterfeiting after Tiffany and other retailers notified the auctioneer about sales of hundreds of thousands of fakes from 2003 to 2005. EBay should have taken “all feasible steps” to block such sales, Tiffany said.
In response, EBay said the law places the primary burden to fight counterfeiting on retailers like Tiffany, which has devoted “relatively few resources” to the fight.
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