05/23/2006
According to newspaper reports, that venerated jewelry seller Tiffany & Co. is suing eBay for "facilitating the trade of counterfeit Tiffany items" on eBay's web auction site. Tiffany, says the article, secretly purchased about 200 items from eBay in 2004 in its investigation of how eBay was dealing with the thousands of pieces of counterfeit Tiffany jewelry offered on its site and found that three out of four pieces purchased were fakes.
Small and individual jewelry buyers are also ending up with fakes and are incensed about it.
For its part, eBay says it does everything it can to stop fraud and that only a minute portion of items sold at any given time are frauds. It acknowledges its obligation to investigate counterfeiting claims lodged by trademark and copyright owners, but not by buyers. And it holds that it has no responsibility for fakes sold through its website because it is only a marketplace to link buyers and sellers.
Tiffany's isn't the first lawsuit to be filed against eBay. Although there may be others we're not aware of, one similar suit was filed several years ago by a small group of people who had unknowingly purchased fraudulent sports memorabilia through eBay. In that case, the purchases consisted of autographed baseballs, photographs, and pieces of paper or "cuts." The sellers of the fraudulent memorabilia had not only forged the autographs, but enlisted others to produce fake certificates of authenticity for the phony merchandise before selling it to two dealers who then sold it on eBay auctions.
Briefly, in their lawsuit, the plaintiffs' allegations against eBay were, among others, that it had violated various California statutes by failing to furnish its own certificate of authenticity for the autographed sports-related collectibles purchase through its website and that it was negligent and had engaged in unfair business practices by distributing false certificates and permitting false representations to be placed on its website.
The trial court found that eBay was not a "dealer" of collectibles, as that term is defined by statute, and had not performed or failed to perform the actions that would constitute violations on the part of a dealer. Additionally, federal law grants immunity to interactive computer service providers and users against being treated as "publisher or speaker of any information provided by another information content provider." The federal law also provides that no state law that is inconsistent with its provisions may be enforced.
The trial court dismissed the lawsuit, and an appellate court affirmed the decision.
In this lawsuit, the plaintiffs/appellants alleged that as early as 1996, eBay "received numerous complaints from consumers and warnings from governmental agencies that a substantial amount of forged sports memorabilia was being auctioned off on eBay." They also alleged that eBay "ignored the warnings and allowed the forged sports memorabilia scheme to continue in order to continue to reap millions of dollars in profits for itself."
One of the eBay customers in the recent article about the Tiffany suit was refused a refund for the $360 she paid for counterfeit jewelry until she filed a complaint with PayPal, who had processed her payment. Yet the customer says that the seller of the fake is still in business and only recently offered another piece of jewelry for sale on eBay.
One online newspaper claims that eBay makes "a lot of money from a lot of small unhappy transactions." And Tiffany alleges charges by eBay of "hundreds of thousands of dollars in fees" for the counterfeit sales.
A Boston lawyer who specializes in intellectual property is quoted as saying that even settling the lawsuit would mean eBay would have to begin policing merchandise sold from their website, which has some 180 million members and 60 million items for sale at any one time, and that the could would be "tremendous."
No winners may emerge from the lawsuit, for eBay certainly can't investigate the authenticity of every item sold on its website and the honesty of every seller. Nor can every consumer buy from eBay with certainty that he or she will get what they paid for -- or that they'll get anything at all.
What to do? The best option for shopping on eBay with some assurance that you won't end up losing money for fake or unsatisfactory merchandise -- or no merchandise at all -- probably lies in how you pay for it. If you can pay by credit card, you will be able to dispute the charge if you need to, as long as you do it within the time period allowed. If PayPal is offered, you will be able to file a claim for a refund with them if what you received is substantially different from what was described. Be sure to read PayPal's policy material carefully so you know exactly what to expect should you have a complaint.
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