Facts: Tiffany Inc. authorized eBay Inc. to list its trademark on the e-market website. Many of these listings are authentic but a large number are also counterfeit. Ebay makes substantial investments in anti counterfeiting initiatives. It has developed and uses a fraud engine that finds listings containing obvious indicia of infringing activity. It also has established its Verified Rights Owner (VeRO) program that utilizes a notice-and-takedown system under which trademark owners can report infringing listings. eBay never refused to remove a listing after receiving an NOCI from Tiffany, and has taken appropriate steps to warn sellers and then suspend them when the conduct persisted. For sometime Tiffany brought lawsuits against the individual counterfeiters, but then decided to try to address the problems directly with eBay. Although eBay implemented a number of initiatives to reduce the opportunities for counterfeiting, it did not adopt all the measures that Tiffany sought. Tiffany sued eBay for direct and contributory trademark infringement. Issue:
1.While advertising to the buyers, if one uses another’s trademark in good faith to make the products identifiable, can it constitute direct trademark infringement? 2.Can a company still be liable for contributory infringement when it has certain measure in place to curb it but is aware of infringing activities on its business platform? Holding:
The rapid development of websites like ebay’s had created new ways for sellers and buyers to connect to each other. These new markets have also given counterfeiters new opportunities to expand their reach. The court is not unsympathetic to the defendant and other trademark owners who have invested enormous resources in developing their brands. Nevertheless, it is the trademark owner’s burden to police its mark, and companies ebay cannot be held liable based solely on their generalized knowledge that trademark...