Whiteflash-Diamond Playground

From the Wall Street Journal - A lawyer for New York luxury jeweler Tiffany & Co. said eBay Inc. has failed to properly police its online auction Web site to stop the sale of counterfeit Tiffany silver jewelry. In his opening statement, James Swire, a lawyer for Tiffany, said the San Jose, Calif., company has been on notice since 2003 that counterfeit Tiffany merchandise is being sold on the auction Web site and eBay has failed to take the appropriate steps to keep people from selling such merchandise. Bruce Rich, eBay’s lawyer, said the company is always working to improve its efforts to root out sellers of counterfeit items and has responded when Tiffany has specific complaints. “EBay simply turned a blind eye,” Mr. Swire said. “Because of that, it’s liable for contributory infringement.” Tiffany sued eBay in 2004, alleging that eBay should engage in automatic screening of its listing for counterfeit products on its Web site, instead of requiring trademark holders to bring counterfeit items to its attention. The case is being heard before U.S. District Judge Richard J. Sullivan in Manhattan. It is expected to continue through Nov. 21. Mr. Swire said that 75% of 325 items advertised on eBay’s Web site that were purchased under a buying program Tiffany began in 2004 were counterfeit. In his opening statement, Mr. Rich countered that eBay has responded at a rate of better than 99.9% to specific complaints about sellers hawking counterfeit Tiffany items. Mr. Rich said the trademark holder has the responsibility under federal trademark law and the better expertise to identify counterfeit items. The company spends $10 million a year on its anticounterfeiting efforts, Mr. Rich said. He noted that eBay works with trademark holders through its Verified Rights Owner Program to report and take down listings for counterfeit items. “There’s an enormous effort to root it out and eBay is getting better all the time,” Mr. Rich said. Mr. Rich said hundreds of thousands of sellers have been suspended after reports of counterfeit sales and a number have been banned permanently.