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Tuesday, September 14, 2010

Judge Rejects Tiffany’s False Advertising Claim Against eBay

For the second time in two years, luxury jewelry retailer Tiffany & Co. failed to persuade a federal court that eBay deceived its customers when they bought counterfeit Tiffany jewelry from the online auction site.

U.S. District Judge Richard Sullivan in New York dismissed Tiffany’s final claim of false-advertising, saying “there is no extrinsic evidence indicating that the challenged advertisements were misleading or confusing,” Bloomberg News reports.

The same judge in 2008 rejected Tiffany’s trademark infringement and false-advertising claims. An appeals court in April upheld most of the judge’s ruling while reinstating a single false-advertising claim. Tiffany first brought on the lawsuit in 2004.

“We are pleased with today’s ruling, which settles the last remaining claim before the trial court in this case,” Michelle Fang, eBay’s associate general counsel, reportedly said in a statement.

The case has been viewed as a benchmark challenge in the United States to Internet-based companies such as eBay, Google Inc and others that may claim merely to be hosting services, and not responsible for users' trademark violations.

Tiffany accused eBay of advertising the sale of its goods through ads on its Web site, and through sponsored links on search engines, which would sometimes link to its own website and exhort readers to "Find Tiffany items at low prices," Reuters reports.

Sullivan agreed with Tiffany that eBay knew "a portion" of the goods being sold were fake. But he said Tiffany failed to show that eBay's advertisements actually misled customers or necessarily implied that all Tiffany products sold on its Web site were genuine, Reuters reports. Sullivan also pointed to eBay efforts to combat fraud, which the company has said costs up to $20 million a year.

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