There may be no better advertisement for the principle of caveat emptor than EBay, said Los Angeles Ties in an editorial yesterday. Excerpts:
The online auction house enables people to buy items of uncertain provenance from distant strangers, which is a decidedly risky business. Nevertheless, the public accepts it because EBay has developed mechanisms for buyers and sellers to protect themselves against unscrupulous users. Although those tools don’t work 100 percent of the time, they provide enough of a safeguard to draw millions of people through the company’s virtual doors.
Some copyright and trademark owners, however, complain that EBay isn’t doing enough to protect them. They’ve sued or threatened to sue the company for allegedly aiding the sale of bootlegged or counterfeit products and reaping a percentage of the revenue. Last week, a French court ordered EBay to pay more than $56 million to Louis Vuitton Malletier and Christian Dior for negligently failing to prevent the sale of bogus luxury goods. The court tacked on an additional $5 million in damages for allowing users to sell real brand-name perfumes despite the manufacturers’ requirement that the scents be sold only through authorized outlets. Meanwhile, a ruling is expected soon in a similar lawsuit brought against EBay in New York by high-end jeweler Tiffany & Co.
These court battles reflect the tension between intellectual property owners and a new generation of intermediaries made possible by the Internet: Companies that provide a platform for the public’s commerce, communications or expression.
The intermediaries succeed by amassing enormous numbers of users, who contribute content (e.g., products, blog posts or video clips) that attracts even more people to the platform. But the size and decentralized nature of these enterprises can also make it harder for intellectual property owners to enforce their trademarks and copyrights. So through the courts or lawmakers, they try to force the intermediaries to do the job for them. For example, France plans to require Internet service providers to cut off customers who are repeatedly accused of online piracy.
