Luxury retailer, Tiffany & Co., is appealing the U.S. court's counterfeiting decision. The U.S. Court of Appeals for the Second Circuit recently ruled that eBay Inc. is not responsible to police its auction site to seek out and remove counterfeit goods before they can be sold to consumers. This ruling is the opposite of a ruling in a French court that concluded that eBay is responsible, and called on eBay to desist sales of counterfeit goods.

"Unfortunately, the U.S. trial court incorrectly held that trademark holders and not eBay are responsible for policing the eBay site. The effect of this is that eBay can continue to profit at the expense of consumers and trademark holders," said Patrick Dorsey, general counsel for Tiffany & Co. in a statement.

"In our view," he continued, "this approach makes no sense as a matter of law or policy. Once eBay has reason to know that a specific brand like Tiffany & Co. is being widely counterfeited and sold, eBay should be compelled to investigate and take action to protect its customers and stop the illegal conduct."

Tiffany sued eBay in 2004 after notifying eBay that 73 percent of a random sample of supposed "Tiffany" silver jewelry offered on eBay was counterfeit. The appeal will seek to overturn the trial court's failure to apply established principles of trademark law, according to Dorsey.

James B. Swire, a partner at the law firm of Arnold & Porter LLP, stated, "We do not believe the law allows auction sites like eBay to continue to turn a blind eye to this problem, while reaping profits from the listing and sale of counterfeit merchandise. Trademark law does not impose a duty on Tiffany to police eBay's site: eBay designed the site and has the responsibility to police it."

Tiffany has support from the International AntiCounterfeiting Coalition (IACC), based in Washington, DC. "Tiffany's decision to appeal is the right thing to do," said IACC president, Bob Barchiesi.

"The IACC is extremely disappointed in the Southern District of New York's recent decision in the case of Tiffany v. eBay, and the IACC applauds Tiffany's resoluteness to protect their brand and to protect consumers from being duped into purchasing fake products online," he said.

The court's decision comes on the heels of a ruling by a French court that weighed the question of on whom the responsibility should lie, in keeping the online marketplace free of illegitimate goods. That court determined that the responsibility must fall with the online marketplace, eBay. "Stated simply, the French court got it right," said Barchiesi.

IACC is a non profit organization devoted to combating product counterfeiting and piracy. It was formed in 1978 and consists of a cross section of business and industry, including autos, apparel, luxury goods, pharmaceuticals, food, software and entertainment.