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Can eBay stop infringing or counterfeit (replica) goods being sold on its website?

Posted by Steve Vondran | Mar 06, 2018 | 0 Comments

eBay Legal Updates – Case Law You Need to Know by Attorney Steve®

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Introduction

Many eBay sellers believe that eBay could be doing a better job of removing infringing items and counterfeit goods from their website. Here are two lawsuits brought against eBay that shed some light on the “safe harbor” protections afforded to online service providers like eBay.

Hendrickson v. Ebay, Inc., 165 F. Supp. 2d 1082 (C.D. Cal. 2001)

Here is a case from the Central District in California.

“This case involves a matter of first impression in the federal courts: whether one of the “safe harbor” provisions of the Digital Millennium Copyright Act (“DMCA”) affords protection to the operator of the popular Internet auction web service, www.ebay.com, when a copyright owner seeks to hold the operator secondarily *1084 liable for copyright infringement by its sellers. On August 20, 2001, the Court heard Defendants eBay, Inc. (“eBay”), Margaret Whitman and Michael Richter's (collectively, the “eBay Defendants”) motion for summary judgment on the copyright and trademark claims in the consolidated Hendrickson v. eBay, Inc. et al. cases. After the hearing, the Court took the motion under submission. After considering the papers submitted by the parties, the case file and oral argument, the Court hereby GRANTS the motion”

Here were the key facts from the case:

On or about December 20, 2000, eBay received a “cease and desist” letter from  pro se Plaintiff Robert Hendrickson. The letter advised eBay that Plaintiff dba Tobann International Pictures is the copyright owner of the documentary “Manson.” The letter also stated that pirated copies of “Manson” in digital video disk (“DVD”) format were being offered for sale on eBay. However, the letter did not explain which copies of “Manson” in DVD format were infringing copies; nor did it fully describe Plaintiff's copyright interest. The letter demanded that eBay cease and desist “from any and all further conduct considered an infringement(s) of [Plaintiff's] right” or else face prosecution “to the fullest extend provided by law.” Promptly after receiving this letter, eBay sent Plaintiff e-mails asking for more detailed information concerning his copyright and the alleged infringing items.  eBay advised Plaintiff that he has to submit proper notice under the DMCA. For example, on December 20, 2000, eBay sent the following e-mail to Plaintiff: “Recognizing that some posted items may infringe certain intellectual property rights, we have set up specific procedures which enable verified rights owners to identify and request removal of allegedly infringing auction listings. These procedures are intended to substantially comply with the requirements of the [DMCA], 17 U.S.C. section 512. Click on the following link to access the [DMCA].” In that e-mail, eBay also encouraged Plaintiff to join its Verified Rights Owner (“VeRO”) program, by submitting eBay's Notice of Infringement form. As eBay explained, some of the benefits of the VeRO program include, among other things:   (1) access to a customer support group dedicated to servicing the VeRO participants;   (2) dedicated priority email queues for reporting alleged infringing activities;   and   (3) ability to use a special feature called “Personal Shopper,” which allows users to conduct automatic searches for potentially infringing item. On December 28, 2000, Defendant Richter, eBay's Intellectual Property Counsel, followed up with another e-mail: We have tried to contact you numerous times concerning your letter dated December 14, 2000.  We would like to assist you in removing items listed by third parties on our site which you claim infringe your rights. However, in order to do so, we would need proper notice under the [DMCA]. Specifically, we would need you to, among other things, identify the exact items 4 which you believe infringe your rights. In addition, we would need a statement from you, under penalty of perjury, that you own (or are the agent of the owner) the copyrights in the documentary. As you can understand, a statement that we ‘immediately CEASE and DESIST from any and all further conduct considered an infringement(s) of my right granted under Copyright and other laws of the land' gives us no indication of what your rights are, and gives us no indication as to which items infringe such rights.  Plaintiff refused to join eBay's VeRO program and refused to fill out eBay's Notice of Infringement form. Before filing suit, Plaintiff never provided eBay the specific item numbers that it sought. The Court ultimately ruled that the DMCA notice was not sufficient to put eBay on notice thus there was no liability to eBay or its employees:

“Plaintiff's pre-suit “cease and desist” letter and e-mails to eBay do not include several of the key elements for proper notice required by Section 513(c)(3).  None of these writings includes a written statement under “penalty of perjury” attesting to the fact “that the information in the notification is accurate … [and] the complaining party is authorized to act on behalf of the owner” of the copyright at issue. 17 U.S.C. § 512(c)(3)(A)(vi). Additionally, none of these writings includes a written statement that Plaintiff “has a good faith belief that use of the material in the manner complained of is not authorized.” 17 U.S.C. § 512(c)(3)(A)(v). The complete failure to include these key elements in his written communications to eBay, even after eBay specifically asked for these items, renders Plaintiff's notification of claimed infringement deficient under Section 512(c)(3).”

Formal requirements to file a DMCA take down notice

The court discussed the formal requirements: “Under the third prong of the test, the service provider's duty to act is triggered only upon receipt of proper notice.  See  id. Section 512(c)(3) sets forth the required elements for proper notification by copyright holders. First, rights holders must provide  written notification to the service provider's designated agent. 17 U.S.C. § 512(c)(3). In addition, the notification must include “substantially” the following six elements: (1) a physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed; (2) identification of the copyrighted work claimed to have been infringed; (3) identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material; (4) information reasonably sufficient to permit the service provider to contact the complaining party; (5) a statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law; and (6) a statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the copyright owner.”

Unless a copyright holder meets EACH of these requirements there can be no duty on the part of the Online Service Provider.

Filing false Notice of Infringement Claims

It is never good to file or serve a false DMCA or Notice of Infringement claim and it could lead to damages for bad faith.  Here is one case from the Northern District of California.

A requirement that a party have an objectively measured “likelihood of success on the merits” in order to assert claims of copyright infringement would impermissibly chill the rights of copyright owners. At the same time, in requiring a showing of “knowing material misrepresentation,” Congress explicitly adopted a standard different from that embodied in Rule 11, which contains a variety of other requirements that are not necessarily coextensive with those set forth in section 512(f). The Court concludes that the statutory language is sufficiently clear on its face and does not require importation of standards from other legal contexts. A party is liable if it “knowingly” and “materially” misrepresents that copyright infringement has occurred. “Knowingly” means that a party actually knew, should have known if it acted with reasonable care or diligence, or would have had no substantial doubt had it been acting in good faith, that it was making misrepresentations. SeeBlack's Law Dictionary (8th ed.2004) (definitions of “knowledge,” in particular, “actual” and “constructive” knowledge). “Material” means that the misrepresentation affected the ISP's response to a DMCA letter.

See Online Policy Grp. v. Diebold, Inc., 337 F. Supp. 2d 1195, 1204 (N.D. Cal. 2004).

Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2010)

This was another case involving eBay and counterfeit products.  The basic overview of the case is:

“eBay, Inc. (“eBay”), through its eponymous online marketplace, has revolutionized the online sale of goods, especially used goods. It has facilitated the buying and selling by hundreds of millions of people and entities, to their benefit and eBay's profit. But that marketplace is sometimes employed by users as a means to perpetrate fraud by selling counterfeit goods.  Plaintiffs Tiffany (NJ) Inc. and Tiffany and Company (together, “Tiffany”) have created and cultivated a brand of jewelry bespeaking high-end quality and style. Based on Tiffany's concern that some use eBay's website to sell counterfeit Tiffany merchandise, Tiffany has instituted this action against eBay, asserting various causes of action—sounding in trademark infringement, trademark dilution and false advertising—arising from eBay's advertising and listing practices. For the reasons set forth below, we affirm the district court's judgment with respect to Tiffany's claims of trademark infringement and dilution but remand for further proceedings with respect to Tiffany's false advertising claim.”

Here is the key holding of the case:

“Moreover, we agree with the district court that if eBay had reason to suspect that counterfeit Tiffany goods were being sold through its website, and intentionally shielded itself from discovering the offending listings or the identity of the sellers behind them, eBay might very well have been charged with knowledge of those sales sufficient to satisfy Inwood‘s “knows or has reason to know” prong. Tiffany, 576 F.Supp.2d at 513–14. A service provider is not, we think, permitted willful blindness. When it has reason to suspect that users of its service are infringing a protected mark, it may not shield itself from learning of the particular infringing transactions by looking the other way. See, e.g., Hard Rock Café, 955 F.2d at 1149 (“To be willfully blind, a person must suspect wrongdoing and deliberately fail to investigate.”); Fonovisa, 76 F.3d at 265 (applying Hard Rock Café‘s reasoning to conclude that “a swap meet can not disregard its vendors' blatant trademark infringements with impunity”).  In the words of the Seventh Circuit, “willful blindness is equivalent to actual knowledge for purposes of the Lanham Act.” Hard Rock Café, 955 F.2d at 1149.”

In reaching its decision, the Court said: “eBay appears to concede that it knew as a general matter that counterfeit Tiffany products were listed and sold through its website.  Tiffany, 576 F.Supp.2d at 514. Without more, however, this knowledge is insufficient to trigger liability under  Inwood. The district court found, after careful consideration, that eBay was not willfully blind to the counterfeit sales.  Id. at 513. That finding is not clearly erroneous. eBay did not ignore the information it was given about counterfeit sales on its website. See Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 110 (2d Cir. 2010).

Contact a eBay Copyright Infringement Law Firm

 If you are an intellectual property rights owner (ex. copyright, trademark, trade secrets, or trade dress) and are in need of an online copyright infringement lawyer contact us at (877) 276-5084. 

About the Author

Steve Vondran

Welcome to the SHORT BIO page for Attorney Steve®  (Yes, I was able to get a trademark for Attorney Steve®) Click here to go to a more COMPLETE BIO. AZ Bar Lic. #025911 CA. Bar Lic. #232337 Introduction I have done a lot of things in my 15 years of law practice and in my life in general.  ...

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