Tiffany: eBay is Rat's Nest for Counterfeiting

Tiffany & Co., the world's second-biggest luxury jeweler, called eBay is a "rat's nest" for counterfeiting and urged a judge to rule that the biggest online auctioneer was liable for infringement. In a legal brief submitted Dec. 7 to U.S. District Judge Richard Sullivan in Manhattan, the jeweler assailed eBay; both companies now await his ruling in a trademark infringement trial.

At issue is whether eBay must pay damages for failing to make adequate efforts to block sales of counterfeit silver jewelry. New York-based Tiffany and other retailers claim online sales of counterfeit clothes, bags and jewelry cost them about $30 billion a year. "At some point, eBay had to have realized that counterfeiting was rampant" on its site, lawyers for Tiffany wrote in their brief. "Indeed, it was a proverbial 'rat's nest.'"

EBay said in its brief that it's a "model citizen" in the fight against counterfeiting and that an adverse ruling might "wreak havoc" on some Internet-based businesses. The company has stated that the law places the primary burden to fight counterfeiting on retailers like Tiffany, which has devoted "relatively few resources" to the fight.

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