Filed under: Law, eBay (EBAY), Tiffany and Co (TIF)

After an investigative operation found that only 5% of Tiffany (NYSE: TIF) products on eBay (NASDAQ: EBAY) were genuine, the luxury goods maker is suing the world’s largest online auction company. The lawsuit was filed in 2004, and proceedings are set to open today.

It could be a landmark case. At issue is eBay’s culpability for items that are being sold by third-party sellers. At the bottom of each listing, eBay warns browsers that the “Seller assumes all responsibility for listing this item.” eBay has some programs in place to help rights owners fight counterfeit items on the site, but seems to believe that the bulk of the responsibility for policing counterfeiting lies with the brands and law enforcement.

Earlier this year, a CNBC Business Nation episode looked at a similar issue — stolen goods being sold on eBay. The video is available on YouTube here. According to David Faber, “eBay, thanks to its speed, efficiency, and relative anonymity, has become the perfect place for organized crime rings to fence stolen merchandise.”

Organized crime is also deeply involved with counterfeiting and eBay is a natural place to sell those products.

Whatever the court ends up ruling, the losing party is expected to appeal.

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