Judge Sullivan’s opinion describes in detail the procedural history of the case, which was filed in June 2004, and the parties’ respective activities. He then concludes that Tiffany had failed to meet its burden on any of its six causes of action.

Direct Trademark Infringement

Tiffany claimed that use of TIFFANY on the eBay Web site and in “its sponsored links” on the Google and Yahoo! search engines constituted direct trademark infringement. Tiffany argued that eBay directly infringed its trademark in three ways: (1) by advertising the availability of Tiffany jewelry on the eBay Web site; (2) by advertising on Google and Yahoo! through sponsored links; and (3) through joint and several liability with counterfeiters who sell through eBay. In response, eBay argued the fair use defense, i.e., that it was entitled to inform third parties of the availability of Tiffany products on eBay, and that, because it does not directly sell any counterfeits, there can be no joint and several liability.

The court concluded “that eBay’s use of the TIFFANY marks is a protected, nominative fair use” and that there was no joint and several liability because eBay does not take possession of goods sold through its Web site, nor does it directly sell any merchandise. Thus, the Court found in eBay’s favor on Tiffany’s direct infringement claims.

Contributory Infringement

Judge Sullivan devotes 18 pages of his opinion to the contributory infringement claim. The court first concludes that the Supreme Court’s test for contributory infringement, articulated in Inwood Laboratories Inc. v. Ives Laboratories Inc. was applicable:

[I]f a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit. 2


The opinion then discusses at length the elements of the Inwood test, and concludes:

that (1) eBay exerted sufficient control over its Web site such that the Inwood test applies; (2) under the Inwood test, the appropriate measure is whether eBay knew or had reason to know of, not whether eBay could reasonably anticipate, the infringement; (3) generalized knowledge is insufficient to impute knowledge of any and all instances of infringing activity to eBay; (4) Tiffany’s demand letters, the Buying Programs, and the volume of reporting provided only generalized [Notice of Claimed Infringement] knowledge to eBay, which is insufficient to establish a duty to act; (5) eBay was not willfully blind to infringement; (6) when eBay had knowledge of specific infringing listings, eBay promptly terminated those listings; (7) when eBay had knowledge that a seller was repeatedly engaging in counterfeit activity, eBay’s pattern was to suspend that seller and then take further corrective action; and, finally, (8) to the extent Tiffany challenges the [Verified Rights Owner] Program on the grounds that it is too time-consuming, the burden of policing the Tiffany mark appropriately rests with Tiffany.