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  • 1. Tiffany (NJ) v. eBay, Inc. 2010 WL 1236315 (2d Cir. April 1, 2010)
  • 2. Facts:
    • Tiffany sued eBay, claiming that eBay should be held liable for trademark infringement when sellers offer counterfeit Tiffany goods on the eBay site
    • Evidence established that eBay quickly takes down listings when Tiffany sends notice that it believes a specific item is not genuine
    • However, Tiffany want eBay to police listings on its own, and to be held responsible for any counterfeit items it missed - attempting to expand trademark law
  • 3. District Court Decision
    • eBay preserved most of its 2008 district court victories
    • Judge endorsed eBay’s various efforts to reduce the sale of counterfeit goods on its site and provide extrajudicial recourse to brand owners
    • Tiffany didn’t invest enough in its police efforts
    • Prescribes a notice-and-takedown regime similar to DMCA system (eBay specific)
  • 4. District Court Decision - Cont’d
    • Tiffany’s trademark infringement claim
    • Focused on nominative use defense
    • eBay is free to tell people that it sells legitimate Tiffany goods
    • Buying “Tiffany” as the keyword trigger for ads doesn’t constitute a trademark use in commerce
  • 5. Second Circuit’s Decision
    • eBay isn’t directly liable for trademark infringement based on its advertisement activities due to the normative use doctrine (even though the Court did not adopt the doctrine)
    • eBay isn’t secondarily liable for counterfeit sales because generalized knowledge is not enough and eBay followed a notice-and-take down procedure
    • eBay isn’t liable for direct trademark dilution on the unadopted nominative use doctrine
    • Rejected the lower courts reliance on a nominative use defense to the false advertising claim
    • Remanded the case for further proceedings for re-examination of the false advertising claim
  • 6. Direct Trademark Infringement
    • Never expressly adopted the nominative use defense
    • Similar to 9th Cir. standard: “a defendant may lawfully use a plaintiff’s trademark where doing so is necessary to describe to plaintiff’s product and does not imply a false affiliation or endorsement by the plaintiff of the defendant”
    • eBay referenced Tiffany to describe accurately the genuine goods offered for sale on its website
  • 7. Contributory Trademark Infringement
    • Lockheed v. NSI (9th Cir.) - articulated an online standard
    • 2d Cir. punted and said that parties agreed to use the Inwood standard : two ways in which a defendant can become liable: (1) if the service provider intentioanlly induces another to infringe; or (2) if the service provider continues to supply its service to one whom is knows or has reason to know is engaging in trademark infringement
    • Inducement is not an issue
    • Take down notices provided generalized knowledge and that was not enough
    • Court defined “willful blindness” - “when a service provider has reason to suspect that users of its service are infringement a protected mark, it may not shield itself from learning of the particular infringing transactions by looking the other way”
  • 8. Dilution
    • There cannot be blurring or tarnishment when the defendant makes a nominative use
    • eBay didn’t sell the goods itself, so it did not commit that dilution
  • 9. False Advertising
    • eBay provided hyperlinks, purchased advertising space on search engines, and sometimes provided a link to eBay’s site
    • These statements are not literally false because genuine Tiffany merchandise was available on eBay - but District Court must conclude that these ads are not likely to mislead or confuse consumers
    • Court rejected nominative use defense
  • 10. Implications of this Ruling
    • Trademarks are subject to notice-and-takedown rule
    • Leaves the door open for Tiffany to challenge eBay’s advertising policy
    • 2d Cir. does not address whether it adopted the nominative use defense or the standard for contributory trademark infringement
    • eBay specific case