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"The ruling confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting," the company said. "The ruling appropriately establishes that cheap Tiffany Notes brands and trademarks is the primary burden of rights owners. While today's decision is a victory for consumer choice, it is a shame that so much effort has been wasted when Tiffany could have worked with eBay to more effectively fight counterfeits. EBay will continue to lead the industry with innovative solutions to stop the sale of counterfeits."Diane von Furstenberg, who has made the problem of counterfeits and the protection of original designs a key issue as president of the Council of Fashion Designers of America, said: "Fakes are damaging not only to brand owners but also to the consumers who unknowingly buy them. Stopping the sale of fakes online is a constant battle for sought-after brands. It's unfortunate that the court did not go further in recognizing that online auction sites have an obligation to prevent the sale of fakes on their sites."The ruling is in direct opposition to one in France last month in which eBay was cheap Tiffany Pendants liable for sales of counterfeit Louis Vuitton and Christian Dior goods and fined almost 39 million euros, or $61.9 million at current exchange rates. The auction site is appealing.The Tiffany lawsuit was filed in June 2004. The luxury jeweler said eBay was liable for trademark infringement and dilution, false advertising and unfair competition in facilitating the sale of counterfeit Tiffany sterling goods on its Web site.

The suit alleged that 73 percent of 186 silver jewelry pieces bought by Tiffany employees through the San Jose, Calif.-based Web site were counterfeit. Tiffany charged eBay with direct and contributory trademark infringement among its other claims. The complaint sought the elimination of all counterfeit silver Tiffany merchandise on the Web site.The ruling Monday came eight months after Sullivan presided at a weeklong trial.Brand owners and others in the cheap Tiffany Rings property community have been paying close attention to the case because it had the potential to cause havoc to eBay's business model and open the popular Internet retailer to further litigation from other labels. According to a company report, eBay had 83.9 million active users and 647 million new listings around the world in the first quarter of 2008."It is the trademark owner's burden to police its mark and companies like eBay cannot be held liable for trademark infringement."-- Judge Richard SullivanLawyers for Tiffany said eBay had vicarious liability for any counterfeit merchandise. The tactic is typically used to prosecute landlords whose tenants manufacture or sell fake goods. Tiffany also argued that eBay bore responsibility in the sale of counterfeit goods by comparing it with a similar seller in the brick-and-mortar world: the owner of a flea market or swap meet.

"The distinguishing factor in those situations is that the owner of the swap meet or flea market had direct contact with the potential counterfeiters," said Scott Christie, a partner at national law firm McCarter and English and a former federal prosecutor specializing in computer hacking and intellectual property. "Here the situation was more attenuated. EBay has hundreds of thousands of sellers who use screen names. The burden on the owner is commensurate with its link with the sellers."EBay maintained it is merely a service through which sellers operate and that because it never physically handles any of the goods for sale, the auction site cannot be charged with identifying counterfeits.The company also argued that cheap Tiffany Sets has worked with brand owners through its Verified Rights Owner Program, which allows owners to report auctions selling fakes. According to the ruling, when eBay was warned of a listing that could possibly contain infringing merchandise, the company removed the listing, advised the sellers and bidders that it had been removed and why and refunded all associated fees. Sellers who broke a "three strikes" rule were banned from the site.The court declined to rule on whether Tiffany might win if it were to sue individual sellers. However, Sullivan noted, "Given Tiffany's choice to sue eBay, rather than individual sellers, and this court's conclusion that eBay does not continue to supply its services to those whom it knows or has reason to know are infringing Tiffany's trademarks, Tiffany's claims against eBay must fail."