eBay fights off Tiffany lawsuit over knock-offs

The Southern District of New York issued an order today in the Tiffany v. eBay case, where Tiffany had sued eBay under a variety of trademark theories over the actions of users who sold knock-offs using the "Tiffany" name in their auction titles or descriptions.

There's lots to write about this 66-page decision, including the standard for contributory trademark infringement, duties to police, etc., but I thought I would post a little on the issue of nominative fair use, since I thought the court's analysis was rather on point with some of the thinking I've been doing about information economics lately.

Nominative fair use is the doctrine that allows people to use trademarks when they are speaking or writing about those marks.  So, for example, if I review the new Harry Potter movie, I can use the trademark "Harry Potter" in my review without fear of liability because it is both descriptive of the source of the film (the Harry Potter franchise co-owned by Warner Brothers and J.K. Rowling) and necessary in order for people to know what I am describing.  Without the name, referencing the good or service you are describing become cumbersome at best and impossible at worst.

In the Tiffany case, Tiffany had accused eBay of infringing its "Tiffany" mark because the name appeared in various places on its home page, in its emails, and in search results.  (Apparently, this was even for legitimate Tiffany goods, not just knock-offs).  eBay defended this, saying that when Tiffany notified them that use of the name was associated with a knock-off, they removed it entirely and when it was associated with sale of a legitimate Tiffany item, the use of the name was necessary under the doctrine of nominative fair use because, as far as they were concerned, there was no other way to let users know something was a Tiffany good without using the name.

The Court sided with eBay.  In doing so, it held:

[T]he Tiffany name is what gives the jewelry the cachet it enjoys.  Absent the Tiffany brand, a silver heart necklace or a silver bracelet with an ID chain would simply be a piece of jewelry instead of a symbol of luxury.  Indeed, were eBay precluded from using the term “Tiffany” to describe Tiffany jewelry, eBay would be forced into absurd circumlocutions.  To identify Tiffany jewelry without using the term Tiffany — perhaps by describing it as “silver jewelry from a prestigious New York company where Audrey Hepburn once liked to breakfast,” or “jewelry bearing the same name as a 1980s pop star” — would be both impractical and ineffectual in identifying the type of silver jewelry available on eBay.

Besides showing a sense of humor (not to mention some good 80s pop culture trivia skills), the Court gets it exactly right here.  Network architecture is premised on efficient descriptions of objects. Both people and machines like short, direct, and accurate names for files, images, links, etc. These can come both from the host of a site, but also from users in the form of tags, comments, and titles.  Thus, one of the most efficient ways to describe something on the web that is trademarked is to use the trademark as the descriptor.  To force web companies and users into "circumlocutions" -- as the Court suggests -- is not only inefficient but also obfuscating.  No one searching the web wants to search for something using 1,000 different descriptions; they want to search for it using a single description, taking advantage of the network effects a single descriptor enables. Here, as the Court recognizes, that single best description is the brand name of the product line. Wisely, it holds that trademark law cannot and should not stand in the way.

Eric Goldman has his preliminary write-up here.

(Image from TulipFleurs)

Comments

[Cathy]

I'm confused as to what Tiffany's objection is in the first place. I mean I understand they don't want knock-offs being made or sold, but why would they object to using the name Tiffany for legitimate Tiffany products? Is is that they really don't want their stuff resold on eBay, period?

[Jason Schultz]

Exactly. They don't want any Tiffany products sold on eBay, period. They want to control their distribution through their own outlets. So they objected to both the sale of knock-offs and legit products.

[Riana]

Brian and I gave a presentation to the media practice group at work today about last month's Creative Commons Technology Summit - more specifically, about promoting ccREL and RDFa to key metadata to CC-licensed works on the web (since licenses = metadata anyway). And I think your comments about network architecture are very applicable to that situation as well - "adding flavor" to webpages using RDFa makes it easier to find CC-licensed works and figure out who owns them, what others can do with them, etc., reducing search costs for those who want to make and build on CC-licensed works.

I didn't explain it that well, though, so Brian put a picture of a puppy biting another puppy's nose (om nom nom) on the screen and we moved on to Q&A.

[anebayseller]

I think it is ridiculous that Tiffany & Co. thinks that they completely have the right to stop consumers from selling their jewelry that they legally purchased from Tiffany & Co. Tiffany & Co. made their money when the item was bought (and at a very expensive price because of the trademark name) and it should then be the consumer's right to sell the jewelry on eBay if they need to or want to. If Tiffany & Co. is allowed to stop consumers with authentic pieces to sell on eBay because they are not allowed to use the Tiffany & Co. name then how many other companies will then join in this kind of lawsuit saying no one but them has the right to use their name in a title of a sale whether it be eBay or some other selling site?

Because of the continious lawsuit Tiffany & Co. has had against eBay it has been increasingly difficult for sellers to sell the Tiffany & Co. product. eBay is excessively restricting the number of Tiffany & Co. items you can sell to only one at a time in many cases and sometimes suspending a seller for 3 months at a time or more from selling any name brand products with no warning even when the seller is selling legitimate Tiffany & Co. pieces. Even if the seller goes through all the proper channels on eBay they get no real resolution and can't speak with an actual eBay representative at a call center since eBay doesnt have one and eBay also refuses you the right to speak with a person by phone when you ask for a number to call eBay directly. Your only choice is to go to the eBay live chat and then be directed to a link to file a complaint and receive a "canned e-mail". It is extremely frustrating and I am sure that these restrictions are so extreme because of the Tiffany & Co. lawsuit which in turn hurts the sellers and eBay itself when sellers leave out of frustration because of the unfair restrictions put upon them.

I can understand restrictions being needed to keep fake Tiffany & Co. pieces off of eBay but the restrictions have become ridiculous. It seems this has happened because eBay is so scared of further action against them from Tiffany & Co. Just read the discussion boards on eBay regarding Tiffany & Co. products and you will see many complaints and many people who have left or are leaving eBay simply because of this rediculious lawsuit which is infringing on a consumers right to sell personal items on eBay.

Well if Tiffany wants to sue eBay for that! maybe they should go after www.Tiffanyjewelry.us, www.Tiffany.TCOJewelrysale.com and Tifany-Silver.com to name a few counterfeiters... that would be a smarter move in my opinion.

j.