eBay slammed over its 'rat's nest' of fakes

eFAKE: Jewellery giant Tiffany & Co says eBay isn't doing enough to stop the sale of fakes. Pictured is a diamond Tiffany Novo ring with bands

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High-class jeweller Tiffany & Co has labelled eBay a "rat's nest" for counterfeiting in a hostile attack on the auction site's apparent reluctance to prevent users selling fakes.

Tiffany, the world's second largest luxury jeweller, is suing eBay in a US court, claiming it has turned a blind eye to reports of counterfeit items being sold on the site.

In the same way file sharing programs like KaZaA provided a market for copyright infringers, Tiffany claims eBay is an online flea market infested with thousands of counterfeit items.

The judge hearing the case, Richard Sullivan, is expected to give a ruling shortly - a loss for eBay could force a dramatic change to its business model, as the auction site could be lumbered with the burden of screening the millions of goods sold there to ensure they are not counterfeit.

eBay strongly rejects the claim, saying it goes above and beyond what is required by the law and will take down fakes when notified by the rights owner.

Further, eBay says it would be impossible for it to take responsibility as it never takes possession of items offered for sale on the site.

In a legal brief filed with the court this month, eBay said a ruling against it would "wreak havoc" on internet commerce, but did not elaborate.

Tiffany, in its own legal brief, said eBay had reason to know there was pervasive and fundamental misuse of its system for the sale of counterfeit Tiffany goods, which include bracelets, necklaces, rings and watches.

"Indeed, it was a proverbial 'rat's nest.'," Tiffany's brief said, urging the judge to find eBay liable for trademark infringement.

Tiffany claims most of the Tiffany products sold on eBay are fake. It says it notified eBay of almost 300,000 counterfeit items between 2003 and 2006, however, the site did not take all "feasible" steps to block the sales.

The legal proceedings began last month and testimony concluded on November 20, but the suit has been pending since 2004.

"Counterfeits are illegal and not welcome on eBay," said eBay Australia spokesman Daniel Feiler.

"eBay is disappointed that it has come to this given that we have been actively supporting Tiffany's brand protection efforts. eBay will aggressively defend itself as we believe Tiffany's claims are without merit."

Feiler said eBay's "Verified Rights Owners" program, which began in 1998 and now works with 18,000 rights owners around the world, allowed brands to notify eBay of fake items, which the auctioneer then removed "instantly", whether it was a fake or not.

- © Fairfax NZ News