Combating Counterfeits: Ebay’s Global Approach
By Dan Dougherty
C
ounterfeit products are a global challenge that threaten
consumer confidence and damage the reputation
of brand owners and other legitimate businesses.
Counterfeit products predate the Internet; however, the
harmful effects of counterfeit products threaten all legitimate businesses, whether on- or offline. eBay believes that
combating counterfeiters requires a coordinated and global
approach—with stakeholders such as online marketplaces
cooperating with brand owners and law enforcement officials
to help raise consumer awareness and address the issue. Online
platforms such as eBay have a clear business incentive to act
against third parties who attempt to use their online services
to offer counterfeit products. Trust is the engine of eBay and
the small minority of sellers who attempt to trade counterfeit
products undermine this trust and damage the reputation of
eBay and that of our many legitimate sellers. eBay therefore
invests significant resources, both human and technological, as
we attempt to fight the online sale of fake goods.
Courts have recognized eBay’s inherent and deep-rooted
interests in combating counterfeiting activity on its website.
The Second Circuit Court of Appeals, in Tiffany (NJ), Inc.
v. eBay Inc.,1—a decision that broadly endorsed eBay’s
anticounterfeiting efforts and applied the Supreme Court precedent in Inwood Labs., Inc. v. Ives Labs., Inc.,2—observed that
“private market forces give eBay and those operating similar
businesses a strong incentive to minimize the counterfeit goods
sold on their websites.”3 The court pointed out that the “risk of
alienating . . . users gives eBay a reason to identify and remove
counterfeit listings” and that eBay had “spent millions of dollars in that effort.”4
The overwhelming majority of listings on eBay come from
honest and law-abiding sellers—whether they are retailers or
casual sellers. Nevertheless, we remain fully committed to
identifying and eliminating listings from the dishonest few,
and we have developed state-of-the-art measures for doing so.
At any given moment, over 200 million listings are offered
for sale on eBay globally, across a multitude of formats that,
in addition to the usual fixed price or “buy it now” listings,
include auctions and classifieds ads. Since launching our
first anticounterfeit measures in 1998, we have continued to
develop and implement innovative solutions to prevent the sale
of counterfeit goods on eBay. Our efforts focus on:
1. Education and awareness,
2. Cooperation with rights owners and law enforcement,
and
3. Proactive and reactive enforcement measures.
The court in Tiffany endorsed each of these efforts, holding
that eBay was not liable for contributory trademark infringement arising out of third-party listings of potentially counterfeit Tiffany jewelry items on its platform. The court observed
that eBay “consistently took steps to improve its technology
and develop anti-fraud measures as such measures became
technologically feasible and reasonably available.”5 The
court also explained that eBay’s duty to act arose only upon
receipt of notification of specific listings claimed by Tiffany
to be offering counterfeit items: “For contributory trademark
infringement liability to lie, a service provider must have more
than a general knowledge or reason to know that its service
is being used to sell counterfeit goods. Some contemporary
knowledge of which particular listings are infringing or will
infringe in the future is necessary.”6 Because the evidence at
trial showed that eBay promptly removed listings for asserted
counterfeit items reported to it, the court found no liability,
observing that “sellers’ listings were removed and repeat
offenders were suspended from the eBay site” and that eBay
“did not ignore the information it was given about counterfeit
sales on its website.”7
Raising Awareness and Promoting Respect for
Intellectual Property
eBay has consistently sought to educate consumers and
encourage respect for intellectual property rights among its
community members. Prior to any use of eBay’s services, each
eBay member must accept the terms and conditions in eBay’s
user agreement. The user agreement explicitly requires that
users refrain from violating any laws and third-party rights.
In addition, eBay has provided an informational area of the
site dedicated to intellectual property rights. In order to present
this information in the most accessible manner possible, we
located these resources, and additional help pages and guidelines, in one clearinghouse on our site.8 The information provided on these pages explains the concept of infringement and
provides details about the fundamentals of intellectual property
rights. This section also presents eBay policies governing what
users may list and sell on eBay.
An example of such a policy developed by eBay is the
policy prohibiting sellers from disclaiming awareness about
the authenticity of items listed for sale.9 While most such listings actually presented no suspicion of infringing items, eBay
nevertheless created this policy to make clear to its community
that listed items may not be offered on eBay unless the seller
is confident in the authenticity of the item. To similarly make
clear that infringement is not to be tolerated, eBay policies
prohibit its members from encouraging intellectual property
infringement.10
These policies, and the information provided, are intended
to raise community awareness regarding intellectual property
rights and to discourage infringement. These policies also
Dan Dougherty is associate general counsel and global head
of intellectual property at eBay Inc. with global responsibility for
copyright, trademark, and related secondary liability matters. Mr.
Dougherty’s responsibilities include anticounterfeiting efforts, the
eBay VeRO program, and company policies concerning intellectual
property. He can be reached at [email protected].
Published in Landslide Volume 4, Number 2, November/December 2011. © 2011 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
are designed to assist eBay in its enforcement efforts and to
aid in the removal of potentially problematic listings. This is
particularly important where the listing itself does not on its
face appear to be infringing. As the Second Circuit found with
respect to eBay, and as is true of other online venues for thirdparty sellers, the site operator never takes physical custody of
the goods and lacks the expertise required to reliably determine
whether goods are in fact counterfeit.11
Policies such as those outlined above are incorporated into
the eBay user agreement and are binding on eBay members.
This allows eBay to remove, on a policy basis, potentially
problematic listings even in the absence of rights owner notifications of claimed infringement. Since eBay users have been
informed that such listings are not allowed as a matter of eBay
policy, we may justifiably remove such listings.
Further, eBay has created interactive tutorials designed
to educate users about eBay policies and relevant laws. The
goal of each is to help members better understand the subject
matter so that they can better ensure their listings comply with
applicable laws and eBay policies. The tutorials provide an
overview of intellectual property and specific examples, as
well as questions to test the user’s understanding of the subject. The online tutorial is designed to increase user awareness
of intellectual property rights, inform users how they can help
protect the rights of intellectual property owners, and prevent
violations of eBay policies or laws.12
eBay also allows public administrations, law enforcement agencies, rights owners, rights owner associations, and
consumer protection organizations to directly educate the eBay
community by creating their own page on eBay, called an
“About Me” page.13 These pages provide an opportunity for
companies to:
• Educate users about their products and intellectual property rights,
• Inform users about the potential consequences of
infringement,
• Provide answers to commonly asked questions,
• Provide tips to users on how to identify fakes, and
• Offer a contact point for users to ask questions.
When eBay takes action concerning a listing at the request
of a rights owner, it is our practice to remove the listing,
inform the seller account holder of the complaint and action,
and provide designated contact information for the complaining party to help resolve questions or mistakes. If a rights
owner maintains an informational “About Me” page as
described above, it is eBay’s practice to provide a direct link to
the relevant informational page for the rights owner.
In addition to our dedicated anticounterfeiting page,14 eBay
has conducted onsite campaigns that deal with certain types of
improper content in more detail. eBay also is actively engaged
in a number of organizations dedicated to the protection of
intellectual property rights. For example, eBay has worked
with the Authentics Foundation, and is a supporting member
of the Industry Trust for IP Awareness in its efforts to raise
awareness about the dangers of counterfeiting and piracy.
In April 2011, eBay co-sponsored the Harper’s Bazaar
Anticounterfeiting Summit in New York City. eBay and the
Council of Fashion Designers of America (CFDA) recently
announced collaboration on a bold new anticounterfeiting awareness campaign that also celebrates original fashion design. To
deliver this message, the CFDA created a collection of original
canvas tote bags, each featuring the tag line “You Can’t Fake
Fashion,” that were sold exclusively on eBay. Proceeds from the
sales benefited the CFDA. By partnering in efforts such as these,
eBay is demonstrating its commitment to playing a leading role
in helping to stigmatize the purchase of counterfeit goods.
Cooperation with Rights Owners and Law
Enforcement
Since its beginning, eBay has supported third parties in their
efforts to protect their intellectual property rights. Launched
in 1998, the Verified Rights Owner (VeRO) program provides
rights owners with an easy-to-use system that allows them to
quickly and easily report counterfeits or copyright infringements for removal by eBay. To further meet the needs of
rights owners and support them in monitoring and notifying of
infringing items, eBay invests its own resources in developing
functionality to simplify the notification task. With critical
assistance from rights owners, and ongoing collaboration, the
VeRO program has been a success. More than 30,000 rights
owners, ranging from Global 500 companies to industry trade
associations to small businesses, currently participate in the
VeRO program in cooperation with eBay.
eBay also has investigation teams in place in North
America, Europe, and the Asia Pacific region to provide
support to law enforcement agencies around the globe. These
teams investigate cases impacting eBay’s services, including
the sale of counterfeit goods. The teams support law enforcement reactively by providing relevant records upon request and
proactively conduct their own investigations into the misuse
of our services and have referred cases to law enforcement
for potential investigation and prosecution. In several of these
matters, we have worked closely with rights owners.
As a global industry leader in fighting counterfeits
online, eBay was proud to sign a European Commission
Memorandum of Understanding (MOU) earlier in 2011 with
29 other major Internet marketplaces and rights owners.15 The
MOU is an important demonstration of collaboration in anticounterfeiting between rights owners and e-commerce sites.
Enforcement and Consumer Protection
Beyond the notice and takedown regime embodied in the
VeRO program, eBay has voluntarily undertaken additional
extensive anticounterfeiting measures. The Second Circuit in
Tiffany did not hold that these voluntary measures were legally
required; instead recognizing the “private market forces” that
incentivize eBay to implement such measures16 and concluding
that beyond removing items reported to it, eBay does not have
an “affirmative duty” to take precautions against the sale of
counterfeit items on its site.17
eBay nonetheless has developed, among other proactive
anticounterfeiting initiatives, sophisticated tools that help
detect patterns of fraudulent activity, and employs a variety of
measures and tools to keep previously suspended users from
returning to the site. eBay also currently uses thousands of
different search rules designed to, among other things, capture
listings that contain indicia of counterfeiting apparent on the
Published in Landslide Volume 4, Number 2, November/December 2011. © 2011 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
face of the listings (e.g., “knock-off,” “counterfeit,” “replica,”
or “pirated” merchandise).
eBay does not limit itself to individual listings, but also
undertakes to identify potentially problematic sellers. In
addition to staff dedicated specifically to anticounterfeiting
efforts, eBay has multiple teams and tools in place focused on
identifying and addressing potentially harmful seller behavior, including teams dedicated to detecting and addressing
merchant fraud as well as reviewing seller accounts that our
proprietary technology identifies for review.
eBay’s efforts to deter unlawful behavior utilize the
educational efforts described above, but also employ a system
of sanctions, including account suspension. Such suspensions apply to the account used by the seller when uploading listings that infringe intellectual property rights, along
with all related accounts that a user possesses. The Second
Circuit found these policies were “appropriate and effective
in preventing sellers from returning to eBay and re-listing
potentially counterfeit merchandise.”18
In making the decision to deny services to a user, every
effort is undertaken to ensure access is completely removed.
Detecting previously suspended users who attempt to regain
access to eBay’s services is a priority for our company, and
there are a number of advanced steps eBay takes to identify
suspended account holders who attempt to regain access to
services. Naturally, some people are sufficiently dedicated and
skilled to evade even sophisticated security protocols. eBay
takes the lead in identifying previously suspended users and all
counterfeiting listings, but welcomes input from rights owners
in identifying problematic sellers and listings, and often the
information provided by rights owners has been a valuable and
significant contribution to investigations. These cases provide
a good opportunity for successful cooperation between eBay
and rights owners.
Ultimately, trademark law exists for the protection of
consumers, and eBay is committed to providing a safe, secure
online shopping experience. Both eBay and PayPal deliver on
the trust that millions of buyers expect from their services. U.S.
and UK buyers have available coverage through the eBay buyer
protection programs should a problem arise.19 Likewise, the
PayPal buyer protection program covers eligible transactions on
ebay.com and protects buyers who pay with PayPal.20
Counterfeit products are not virtual goods; they physically
exist, along with points of manufacture and distribution. Only
by disrupting the cycle of supply and demand can counterfeiting be effectively curtailed, and only through contributions
by all stakeholders can we hope to educate consumers and
disrupt the cycle. n
Endnotes
1.600 F.3d 93, 109 (2d Cir.), cert. denied, 131 S. Ct. 647 (2010).
2.456 U.S. 844 (1982).
3.
Tiffany, supra note 1, at 109.
4.
Id.
5.
Id. at 100 (quoting Tiffany (NJ), Inc. v. eBay Inc., 576 F. Supp. 2d
463, 493 (S.D.N.Y. 2008)).
6.
Id. at 107.
7.
Id. at 109–10.
8.
Rules about Intellectual Property, eBay, http://pages.ebay.com/
help/policies/intellectual-property-ov.html (last visited September 16,
2011).
9.
Authenticity Disclaimer Policy, eBay, http://pages.ebay.com/help/
policies/authenticity-disclaimers.html (last visited September 16, 2011).
10.
Encouraging Infringement Policy, eBay, http://pages.ebay.com/
help/policies/encouraging.html (last visited September 16, 2011).
11.
Tiffany, 600 F.3d at 98.
12.
Trust and Safety Tutorials, eBay, http://pages.ebay.com/help/
policies/tns-tutorials.html (last visited September 16, 2011).
13.
VeRO: Participant About Me Pages, eBay, http://pages.ebay.com/
help/community/vero-aboutme.html (last visited September 16, 2011).
14.
eBay against Counterfeits, eBay, http://pages.ebay.com/
againstcounterfeits/ (last visited September 16, 2011).
15.
Memorandum of Understanding, European Commission, http://
ec.europa.eu/internal_market/iprenforcement/docs/memorandum_
04052011_en.pdf (last visited September 16, 2011).
16.
Tiffany, 600 F.3d at 109.
17.
Id. at 106. See also Hard Rock Cafe Licensing Corp. v. Concession
Servs., Inc., 955 F.2d 1143, 1149 (7th Cir. 1992) (holding that third parties such as marketplace operators have “no affirmative duty to take precautions against the sale of counterfeits” and that “the ‘reason to know’
part of the standard for contributory liability . . . does not impose any duty
to seek out and prevent violations”).
18.
Tiffany, 600 F.3d at 100 n.5 (quoting Tiffany, 576 F. Supp. 2d at
489).
19.
About Our Buyer Protection Programs, eBay, http://pages.ebay.
com/help/buy/protection-programs.html (last visited September 16, 2011).
20.PayPal Buyer Protection, eBay, http://pages.ebay.com/help/buy/
paypal-buyer-protection.html (last visited September 20, 2011).
Published in Landslide Volume 4, Number 2, November/December 2011. © 2011 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.