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A Ruling to Cheer About

It not usually good news when courts decide how the Internet should work, so it’s only fair to acknowledge when they judge a case exactly right.

That’s what happened yesterday when U.S. District Judge Richard J. Sullivan ruled that jewelry giant Tiffany could not force eBay to stop its customers from buying and selling products made by Tiffany. I spoke with reporters from BusinessWeek and Reuters about the ruling.

From the outset of this case, Internet users had cause to be concerned.

Relying on the dubious claim that a large number of Tiffany fakes were being bought and sold on eBay, Tiffany sought to preemptively force eBay to limit — or altogether halt — the listing of Tiffany products by eBay sellers. If the court had agreed, luxury manufacturers owuld have been given veto power to control how their products are bought and sold — all at the expense of ordinary consumers.

And earlier this month, the French Tribunal de Commerce issued an atrocious ruling ordering eBay to pay more than $60 million to French luxury goods maker LVMH, again under the banner of “halting counterfeits.” Had the U.S. Courts followed this French ruling, the online marketplace could have been irretrievably harmed.

Instead, Judge Sullivan realized from the outset that this case was never about counterfeits. Indeed, he pointed out that eBay had consistently removed listings for fake Tiffany products and banned sellers found to be trading them.

It seems clear from his ruling that Judge Sullivan recognized that this case was all about a giant luxury goods manufacturer wanting to control its products, even after consumers bought them. Judge Sullivan declined to give Tiffany that power, and as a result consumers can continue to buy and sell products in a safe marketplace that puts control squarely where it belongs: in the hands of users.

As I said to BusinessWeek: “If you weren’t born with a Tiffany silver spoon in your mouth, you can still buy one on eBay.”