Tiffany trademark suit against eBay over knock-off auctions dismissed

The Southern District of New York issued an order recently in the Tiffany v. eBay case, where Tiffany had sued eBay under a variety of trademark theories over the actions of users who sold knock-offs using the “Tiffany” name in their auction titles or descriptions.

There’s lots to write about this 66-page decision, including the standard for contributory trademark infringement, duties to police, etc., but I thought I would post a little on the issue of nominative fair use, since I thought the court’s analysis was rather on point with some of the thinking I’ve been doing about information economics lately.

Nominative fair use is the doctrine that allows people to use trademarks when they are speaking or writing about those marks.  So, for example, if I review the new Harry Potter movie, I can use the trademark “Harry Potter” in my review without fear of liability because it is both descriptive of the source of the film (the Harry Potter franchise co-owned by Warner Brothers and J.K. Rowling) and necessary in order for people to know what I am describing.  Without the name, referencing the good or service you are describing become cumbersome at best and impossible at worst.

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.

The Court sided with eBay.  In doing so, it held:

[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.  No one searching the web wants to search for something using 1,000 different descriptions; they want to search for it using a single description, taking advantage of the network effects a single descriptor enables. Here, as the Court recognizes, that single best description is the brand name of the product line. Wisely, it holds that trademark law cannot and should not stand in the way.

Eric Goldman has his write-up here.