Trademark and Fair Use: Tiffany versus EBay
Thanks to everyone for sending me interesting stories! I am having a busy summer and sometimes I don't get around to reading all my messages as quickly as I should, but I really appreciate the links.
Bluestocking has another entry up about Evidence in Trials:
Opinions, Experts, and Hearsay, Oh My!!!!
aredwitch sent me the link to the Judge's Decision in the Tiffany versus EBay case. It's very interesting reading!
Tiffany had charged that Ebay wasn't keeping proper watch on people who try to sell counterfeit Tiffany products, and that there was "trademark dilution" and "unfair competition." So this is somewhat similar to the charges made by WB/JKR with the Lexicon. It was also a Bench Trial decided by a Judge in the same District Court of New York.
Of course, JKR has had her own gripes about Ebay, and mentioned them several times on her Official Site because people sell fake autographs in supposedly "signed" books, and that the buyer should beware. :
March 2004
September 2005
September 2005
September 2006
The Judge ruled down the line that EBay was protected by Fair Use. I looked around at some other opinions on the case.
Law Geek writes about the fact that EBay has to use the trademark "Tiffany" to describe what is being sold because otherwise it would be meaningless. This reminds me of all the times we've heard that certain words have been trademarked by WB, such as the names of the characters and the types of creatures, so that the use of the words is supposed to be taboo:
In the Tiffany case, Tiffany had accused eBay of infringing its "Tiffany" mark because the name appeared in various places on its home page, in its emails, and in search results. (Apparently, this was even for legitimate Tiffany goods, not just knock-offs). eBay defended this, saying that when Tiffany notified them that use of the name was associated with a knock-off, they removed it entirely and when it was associated with sale of a legitimate Tiffany item, the use of the name was necessary under the doctrine of nominative fair use because, as far as they were concerned, there was no other way to let users know something was a Tiffany good without using the name.
[T]he Tiffany name is what gives the jewelry the cachet it enjoys. Absent the Tiffany brand, a silver heart necklace or a silver bracelet with an ID chain would simply be a piece of jewelry instead of a symbol of luxury. Indeed, were eBay precluded from using the term “Tiffany” to describe Tiffany jewelry, eBay would be forced into absurd circumlocutions. To identify Tiffany jewelry without using the term Tiffany - perhaps by describing it as “silver jewelry from a prestigious New York company where Audrey Hepburn once liked to breakfast,” or “jewelry bearing the same name as a 1980s pop star” - would be both impractical and ineffectual in identifying the type of silver jewelry available on eBay.
Besides showing a sense of humor (not to mention some good 80s pop culture trivia skills), the Court gets it exactly right here. Network architecture is premised on efficient descriptions of objects. Both people and machines like short, direct, and accurate names for files, images, links, etc. These can come both from the host of a site, but also from users in the form of tags, comments, and titles. Thus, one of the most efficient ways to describe something on the web that is trademarked is to use the trademark as the descriptor. To force web companies and users into "circumlocutions" -- as the Court suggests -- is not only inefficient but also obfuscating.
Another extremely interesting analysis on Eric Goldman's Technology and Marketing Law Blog. This is about people who own trademarks and set up a bunch of hoops for people to jump through that have nothing to do with the law as it is written. In effect, many large corporations don't care about Fair Use, and they think they are making all the rules:
Tiffany's approach is very common among IP owners--they manufacture an artificial rule and then demand fidelity to the rule at peril of litigation. (As another recent example of this phenomenon, recall the dustup over the AP's unilateral declaration of the permissible amount of quoting of AP articles. Where did that rule come from?). Many times websites kowtow to these demands to avoid litigation, but here the court shreds Tiffany for creating a baseless rule and then treating eBay as the villain for "breaching" the rule--especially because Tiffany kept on changing the rules and softened its adamancy. Tip to IP owners--if you are going to manufacture a rule about how people can engage with your IP from whole cloth, don't be surprised if judges won’t rubberstamp it. If anything, they may think you're overreaching.
Goldman thinks the case will be appealed right away, of course, but that the Judge did a good job in writing his decision.
Of course, as this article in Business Week points out, these rulings may not apply to copyright cases, such as Viacom suing YouTube. And Ebay has lost cases overseas and had to pay out the wazoo.
. . . Judge Sullivan's ruling was a sharp departure from the legal opinions against eBay that have emanated from European courts in recent weeks. In late June, a French Tribunal ordered eBay to pay LVMH (BusinessWeek.com, 7/1/08), the luxury brand behind the Dior and Louis Vuitton labels, $61 million in damages for failing to adequately prevent counterfeit items from appearing on its French site. The Tribunal also ruled that eBay had to immediately stop allowing the sale of LVMH (LVMH.PA) perfumes on its European sites or face stiff penalties of €50,000 a day. EBay plans to comply with the ruling (BusinessWeek.com, 7/11/08) while appealing its case.
. . . While potentially helpful to Internet companies, particularly in the area of trademarks, the Tiffany decision leaves unresolved the question of whether removing infringing material is good enough when dealing with copyrights. That's the issue Google's YouTube is facing in its lawsuit with Viacom (VIA). Trademark laws are generally more limited than copyright laws. Trademarks, for example, can become so commonplace that they are virtually unenforceable. For example, Google, which has become synonymous with search, could have a hard time stopping people from saying "Google us" in advertisements. Copyright, however, cannot be similarly worn out. "Trademark and copyright are really different," says Kramarsky. "I expect that Viacom will have a much easier time in court than Tiffany did."
Tiffany is likely to appeal the ruling, says a company representative. "The primary purpose of trademark law is to protect the consumer and to protect the brand owner, and instead of fulfilling those purposes, the court's decision has allowed counterfeiters to flourish," the spokesman says. If Tiffany appeals, the case could go as high as the Supreme Court, legal experts say.