TRADEMARK CASE STUDY

TIFFANY , INC. v. eBAY, INC.

FACTS:A significant number of items bearing the Tiffany trademark are sold on eBay.Many of these are authentic, but a large number also are counterfeit.

Since eBay's revenues are dependent on sales, eBay takes numerous steps to help sellers market their products.For instance, eBay provides users with a Holiday Hot List, which included Tiffany, and recommends that they use "Tiffany & Co" as a keyword in their pages to boost sales.eBay also advertises the availability of Tiffany merchandise on its website, and purchases sponsored advertising keyed to Tiffany on Google and Yahoo!

eBay makes substantial investments in anti-counterfeiting initiatives.It has developed and uses a fraud engine that finds listings containing obvious indicia of infringing activity.It also has established its Verified Rights Owner (VeRO) program that utilizes a notice-and-take down system under which trademark owners can report infringing listings.When eBay receives a good faith notice of claimed infringement (NOCI), it removes the listing and reviews the seller's account to determine if further remedial action is needed, such as suspension.eBay has never refused to remove a listing after receiving a NOCI from Tiffany, and has taken appropriate steps to warn sellers and then suspend them when the conduct persisted.

For a while, Tiffany brought lawsuits against the individual counterfeiters, but then decided to try to address the problem directly with eBay.Although eBay implemented a number of initiatives to reduce the opportunities for counterfeiting, it did not adopt all the measures that Tiffany sought.

Tiffany sued eBay for direct and contributory trademark infringement, among other claims.

Question Number 1: Direct Trademark Infringement.Tiffany argued that eBay directly infringed its trademark by advertising Tiffany jewelry on its website and by buying sponsored links, among other actions.Should Tiffany prevail on its claim for direct infringement?Why, or why not?

Question Number Two:Contributory Trademark Infringement.Tiffany did not allege that eBay intentionally induced infringement of Tiffany's marks.However, Tiffany argued that eBay continued to provide it service when it had a reason to know that its customers were engaging in trademark infringement, citing the large number of NOCIs that it submitted to eBay, along with complaints from customers.Should Tiffany prevail on this claim for contributory infringement?Why, or why not?