Red Herring reports that American jeweller Tiffany is suing eBay for facilitating the counterfeiting of Tiffany’s goods, false advertising, and trade mark infringement of Tiffany items in violation of the Lanham Act. Tiffany conducted sample purchases of 200 goods sold as having been made by Tiffany during 2004 and claims that 75% of these goods were fakes. eBay’s complaint states that
Tiffany is seeking an injunction against eBay preventing it from selling any items on its site that have not been made, sponsored, or approved by Tiffany and is asking the court to award Tiffany three times the profits eBay made from selling any counterfeit items, or alternatively $1 million for each counterfeit mark for each type of jewellery sold.“The eBay web site is currently, and has been, infested with many thousands of counterfeit Tiffany items, many of poor quality, which ... has directly led to the defrauding of thousands of consumers".
To the IPKat this sounds like a cross between Grokster and cases such as the one in China where the owner of physical premises on which others sell counterfeit goods have been sued for trade mark infringement. If this case was to succeed it would have a catastrophic effect on internet auction sites since it would be unrealistic to expect them to verify if the goods put up for sale by individuals were genuine.