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<i>Tiffany v. eBay </i>
The recent decision of the Second Circuit in connection with the appeal in Tiffany (NJ) Inc. and Tiffany & Company v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008), represents a thorough and well-considered exploration of the basis for finding secondary liability in the electronic marketplace for those who facilitate the sale of infringing goods without ever selling the goods and, conversely, the way for the maker of the marketplace to avoid liability for infringements by those who sell on its site.
The district court had absolved eBay from liability for false advertising, since it was in fact providing a venue for sale of legitimate Tiffany product. The Second Circuit remanded for reconsideration of the false advertising claim in light of its concern that the advertising might be misleading, granted eBay's general knowledge that counterfeit product was being sold by vendors through the site. In remanding, the court accepted the position of the lower court that there was no literal falsity, legitimate Tiffany product being available, but the promotion of product as Tiffany product might be misleading granted the volume of counterfeit product, suggesting that a disclaimer might become adequate. Suffice to say, the court's language augers little comfort for Tiffany in this partial, potentially pyrrhic, victory.
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