In what would appear to be the final chapter of the battle between online giant eBay and luxury jeweler Tiffany, a Southern District of New York judge has bounced Tiffany’s false advertising claim, the only claim remaining following a Second Circuit decision earlier this year.
On remand, the district court focused on whether eBay’s advertisements about the availability of Tiffany merchandise on its site misled or confused customers since at least some purportedly Tiffany products were counterfeit. Tiffany conceded that there was no extrinsic evidence measuring the effect of eBay’s ads on consumers, but argued that instances in which customers unwittingly purchased counterfeit Tiffany merchandise or complained to eBay about counterfeit Tiffany goods demonstrated that consumers were actually misled. The court disagreed (PDF), reasoning that that evidence did not show the effect of eBay’s ads on consumers in general, and more importantly, failed to demonstrate that eBay’s ads actually misled any consumer. Tiffany (NJ) Inc. & Tiffany and Co. v. Ebay, Inc., No. 04 Civ. 4607 (RJS) (S.D.N.Y. September 10, 2010).
In an effort to resuscitate its false advertising claim, Tiffany also argued that the ads were false by necessary implication and that eBay intentionally misled customers by circulating its ads knowing that its site contained many listings for counterfeit Tiffany goods. Those contentions fared no better. The false by necessary implication doctrine, the court held, did not apply because that doctrine only applied to assertions that an advertisement was literally false, a proposition previously rejected by the district court and the Second Circuit. The court further ruled that Tiffany waived its argument that eBay intentionally misled or confused customers by not raising it at trial or on appeal. Even if it hadn’t waived that argument, the court continued, Tiffany’s assertion was meritless because it failed to show that eBay engaged in the sort of egregious misconduct necessary to show an intent to deceive as nothing in the record suggested eBay knew that its advertisements were misleading consumers, and eBay had, in fact, employed a number of anti-counterfeiting measures to prevent the sale of Tiffany knock-offs.
While the district court’s decision focused on the dearth of evidence indicating that consumers had been misled by eBay’s ads, eBay’s extensive anti-counterfeiting efforts doubtlessly placed eBay in a better position to avoid false advertising liability.