A few commments on eBay, Tiffany and counterfeits

From what I do on a daily basis, which is monitor eBay for unauthorized picture use and conterfeits, I find the Tiffany lawsuit an important event. Many manufacturers and marketers detest eBay and the monster it has become. Many eBay sellers detest the manufacturers and marketers for pulling their auctions that use the marketing materials or sell "replicas" or "genuine" products by the truckload at less than half of retail (just like the guy in New York selling Rolex's out of his trunk). The truth here is found in a paraphrased quote from Solomon: When all is said and done, there is truly nothing new under the sun. That is true with eBay. Fake or pirated Levis, Nikes, music, movies and even, yes, Tiffany handbags have been sold at countless flea markets from the time such products came into being. These are just brought into one easily searched place.



There is a structure set up, regardless of the perfection or lack thereof, to handle this. It involves the intellectual property owner reporting an infringing post or auction to the service provider (ie eBay). The service provider (ie Ebay) then promptly (depending on your definition of promptly) removes the offending listing in exchange for immunity from liability. The Tiffany ruling basically endorsed the Digital Millenium Copyright Act (DMCA) and granted eBay its immunity. Essentially, Tiffany failed to prove that eBay did not remove reported items in a prompt manner. Tiffany, for its part, wanted eBay to actively control the listings of counterfeits. eBay, whether marketers like it or not, does not make their products and beyond filtering auctions with words like "fake" or "replica", has no way of knowing a fake from a legitimate product. For the most part, only the manufacturer can truly spot fakes. There is also the interesting rulings from France and Germany to throw into the mix. If one doesn't like the laws in the USA, does one simply sue in France? Such are the headaches of the digital age. My own suspicion is that eBay will essentially find a way to abandon France and since the model under those terms is unprofitable, France will be without eBay or an equivalent.



eBay is the new way of doing business. There are those that didn't like the automobile. Some carriage makers contracted with Ford and other automakers and simply adjusted their business. Others so detested the new fangled things they rode their horse and their business right over the cliff. There is nothing new under the sun. The reality is that many sales can be had, new ways for selling are at hand. One of those realities is that it is much easier to sell stolen goods, counterfeit items or use someone else's pictures and text to sell. By the same token, it is also easier to spot these folks.



First, we look at stolen goods. Have you had your notebook computer or blackberry stolen? One cop I know told me the first thing he would do after filing a police report is keep an eye on eBay for it. You would be amazed at how often this is true.



Second, we look at counterfeit items. Are they on eBay? Do birds fly? Does a fish swim? In the past, these were at flea markets. In the past a company had to send someone to any auction to catch these. Now, eBay has so dominated the marketplace that while the flea markets still exist, the sales and profits are made there. All the company has to do is hire someone, train them to spot the fakes and have them follow the procedures.



Third, we look at unauthorized use of pictures or marketing materials. Does this happen? If you monitor, probably about 2 or 3 out of a hundred. If you don't monitor and report, it is probably 100% using your pictures and looking like they are official sellers when in fact most are selling large quantities of "new" items for less than half of retail. We all know this means mostly counterfeits. These are all displaced sales that would otherwise have resulted in sales for you. But there are enough legitimate sellers that find liquidations and clearance items that eBay can't just pull all of them. My wife is an eBay seller and she DOES find clearances at prices that are clearly meant to dump the leftovers. I gaze at a pile of George Foreman grills she got for less than a tenth of retail.



Speaking of my wife, there is a reason why someone uses YOUR pictures. It is very clear that in real estate there are three primary factors in value and sale, 1) location, 2) Location and 3) LOCATION. For online sales, professional pictures make a big difference in volume, price and even whether an item sells. My wife does take her own pictures, which eBay does repeated warn and advise. She does quite well. Another reason for using someone else's pictures, they also assist counterfeiters in masking their products. For this reason, if someone asks you for permission to use your picture, be wary.



My personal thought is that some retailers will try to stop the flow and lament new expenses and work to be done. Others will embrace online sales and do what it takes. These sellers will themselves be on eBay and monitor the competition. You cannot just pull everyone that sells your widgets, but you can surely limit the counterfeits and figure out where in your supply chain widgets are falling off the back of the truck. The times they are changing.