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The law struggles to keep up with information technology. However, time and again, eBay shines light where others have not gone before. Most recently, eBay secured a significant legal victory in Gentry v. eBay. In that case, eBay convinced the California Court of Appeal that it could not be liable for the sale of faked autographed sports memorabilia on its Web site based on immunity conferred by the Communications Decency Act. ABOUT EBAY EBay describes itself as the world’s largest online marketplace for the sale of goods and services among its users. EBay’s Web site enables member sellers to offer items for sale to member buyers in auction-style or fixed price formats. As part of its service, eBay provides descriptions of items under various categories and subcategories. SPORTS ITEMS With respect to sports items, eBay’s Web site includes a sports category containing the following subcategories: “Sports: Autographs,” “Sports: Memorabilia,” “Sports: Sporting Goods,” and “Sports: Trading Cards.” The “Sports: Autographs” subcategory contains sub-subcategories which differentiate autographed sports collectibles by specific leagues. FAKED SPORTS MEMORABILIA Starting in September 1995, various people commenced a scheme to sell fraudulent autographed sports memorabilia to consumers. As part of the scheme, they purchased sporting good items and photographs from retail stores. They then forged signatures of professional athletes on the items while creating false certificates of authenticity for the items. After that, they sold the forged items to large dealers who used eBay auctions to sell the forged items to consumers. LEGAL ACTION Certain individuals who purchased some of the forged autographed sports items, including baseballs, photographs and autographed papers, filed suit against people engaged in the fraudulent scheme. EBay also was included as a defendant. The plaintiffs argued that eBay should be included as a defendant because eBay allegedly violated California’s Autographed Sports Memorabilia statute by failing to furnish a certificate of authenticity to persons who purchased autographed sports memorabilia through its Web site. The statute generally forbids dealers of collectibles from representing an item as a collectible “if it was not autographed by the sports personality in his or her own hand.” The plaintiffs also argued that eBay was negligent and engaged in unfair business practices under California’s Unfair Competition Law because of its failure to supply such certificates, in addition to its alleged acts of distributing false certificates, permitting false certificates to be placed on its Web site, and making its own false and misleading representations. EBay countered that the immunity afforded by the Communications Decency Act extends to and precludes liability under the California laws cited by the plaintiffs. The operative provision of the Communications Decency Act provides: “No provider or user of an interactive computer service shall be treated as a publisher or speaker of any information provided by another content provider. … No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with the section.” THE APPELLATE DECISION The Court of Appeal agreed with eBay in all significant respects. Namely, the court held that eBay cannot be liable under the Autographed Sports Memorabilia statute because the plaintiffs did not specifically allege that eBay sold or offered to sell the collectibles at issue. EBay simply provided a venue where such sales could take place. Moreover, the court held that the imposition of liability under this statute, as well as for negligence and the Unfair Competition Law would be inconsistent with the immunity afforded by the Communications Decency Act because under that Act eBay cannot be responsible for the “misinformation or misrepresentations originating with other defendants or third parties.” Accordingly, the Court of Appeal affirmed the earlier decision of the trial court which dismissed eBay from the case. WHAT’S NEXT? Undoubtedly, eBay will continue to cut a path in the legal wilderness of Cyberspace. We will have to watch and wait to see how the law next develops from eBay’s lead. Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP where he focuses on technology and litigation matters. His Web site is http://www.sinrodlaw.comand he can be reached at [email protected].

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