April 7, 2010, 12:00 AM

Tiffany considers a Supreme Court appeal in eBay counterfeiting case

Tiffany & Co. is considering an appeal to the U.S. Supreme Court over a ruling this month that said eBay is not legally liable for sales of counterfeit Tiffany items on the online auction site.

Tiffany & Co. is considering an appeal to the U.S. Supreme Court over a ruling this month that said eBay Inc. is not legally liable for sales of counterfeit Tiffany items on the online auction site.

Tiffany & Co., No. 107 in the Internet Retailer Top 500 Guide, lost an appeal on April 1 before the U.S. Court of Appeals for the Second Circuit. Tiffany, which sells high-end jewelry, initially filed a lawsuit in 2004. Tiffany eventually claimed hundreds of thousands of counterfeit silver jewelry items were sold on eBay between 2003 and 2006. Tiffany said that eBay did not do enough to prevent those sales. Tiffany also said eBay infringed upon Tiffany’s trademark, in part by claiming that eBay was selling Tiffany items.

In a statement, Tiffany says this month’s appeals court ruling allows Tiffany to pursue the claim for false advertising but that eBay still can profit from what Tiffany says are the sales of counterfeit goods. Neither eBay nor Tiffany responded to requests for comment.

“As an e-commerce leader, eBay has a responsibility to protect consumers and promote trust in its marketplace,” says Michael Kowalski, Tiffany’s chairman and CEO. “EBay knew that counterfeit merchandise was being sold on its site and took no effective steps to stop it.”

EBay said the appeals court ruling showed that the online auction site is meeting its responsibilities to fight counterfeiting. “The ruling validates eBay’s leading efforts to fight counterfeiting and its commitment to providing consumers with choice and value in a safe and trusted marketplace,” says Michael Jacobson, eBay’s general counsel. “We continue to support cooperation, rather than litigation, as the best way to address these issues in everyone’s best interests, and we remain confident that the one remaining issue in the case will be decided favorably on remand.”

Tiffany says its attorneys are reviewing the appeals court decision but gave no indication about when it would decide whether to appeal to the U.S. Supreme Court.

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