Internet Lawsuit: It's the Real Thing

A pillar of Internet commerce has learned that its future may rest on a court ruling handed down in a case involving Coca-Cola in 1946—almost a decade before the man who invented the World Wide Web was even born.

"There is a fundamental disagreement as to what the law is here," U.S. District Judge Richard J. Sullivan said after reading briefs and hearing testimony in a trademark dispute between (of all businesses) Tiffany and eBay.

Tiffany & Co. has sued eBay, saying it facilitates the sale of hundreds of thousands of counterfeit silver and jewelry items on its online auction site. EBay doesn't deny that fakes are rife on its site, but it says that it is merely a forum for trade and that it is up to Tiffany and other trademark holders to protect their rights themselves.

When all the evidence was presented at federal district court in Manhattan today, Judge Sullivan directed the opposing sides to a footnote in a 1982 U.S. Supreme Court case, Inwood Laboratories v. Ives Laboratories. The footnote refers to a 1940s precedent from a trademark infringement case brought by the Coca-Cola Company against Snowcrest Beverages Inc. of Salem, Massachusetts.

That earlier case—settled nine years before World Wide Web inventor Tim Berners Lee was born in London—concluded that a company could be held liable for contributing to trademark infringement if it could "reasonably anticipate" the sale of an infringing product.

Is that 1940s case still good law? Tiffany says yes; eBay says no. The parties have until Dec. 7 to file briefs arguing their positions. Judge Sullivan advised them not to tackle the question until after the Thanksgiving holiday.

by Karen Donovan