A US district Judge in New York has ruled that the company cannot be held liable for the sale of counterfeit goods by its users.
Jewelry firm Tiffany & Co. had accused eBay of failing to keep users from selling forged items on the site.
eBay has a counterfeit reporting and enforcement system in place, but retailers have said that the system does not go far enough in preventing the sale of forged and counterfeit merchandise.
Judge Richard Sullivan concluded that the company adequately addressed the specific claims of counterfeiting, and that eBay should not be required to take additional steps to stop the counterfeit sales.
"The ruling confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting," the company said in a statement.
"While today's decision is a victory for consumer choice, it is a shame that so much effort has been wasted when Tiffany could have worked with eBay to more effectively fight counterfeits."
Chris Glancy, a lawyer who specializes in trademark and intellectual property cases for New York law firm White & Case, told vnunet.com that the decision could have a profound impact for other online merchants in the US.
"This is a significant decision for the e-commerce industry that puts the onus on rights owners to protect their brands rather than online retailers," he said.
The ruling is also a welcome victory for eBay as the company works to fight off a strong of similar lawsuits over its ability to police counterfeit items.
Last month, the company was on the losing end of a pair of suits in France filed by luxury goods sellers Hermes and LVMH.
eBay emerges victorious in counterfeit case
By Shaun Nichols, vnunet on Jul 15, 2008 4:32PM