EBay Again in Hot Water: Breach of Copyright bugaboo haunts online giant

There’s been no shortage of problems for auction giant eBay of late. Now Harry Potter author JK Rowling can be added to that list.

Rowling, the first billionaire author – thanks to the wild success of the Harry Potter books – filed suit against eBay in late 2006, alleging that the company used the site’s India arm to peddle unauthorized versions of her work.

An Indian magistrate, in January, sided with the author. Judge A. K. Sikri, of the Delhi High Court, ordered eBay to ensure that pirated versions of the work are not uploaded for sale.

The author, who brought the world such terms as muggles and quidditch, is hardly the only recognizable name on a list of litigants after eBay for breach of copyright. She joins, most notably, New York City-based Tiffany & Co, in trying to get the auction site to clean up its act. Louis Vuitton and Christian Dior are among the others pressuring eBay to take action.

Tiffany filed a similar, much-covered action in 2004 aimed at forcing eBay to take responsibility for policing auctions that are selling fakes and violating Tiffany copyrights. EBay has, so far, denied any responsibility, stating that it is simply a platform for the sales, and does not have the capacity to provide mass monitoring of its auctions.

In its complaint, Tiffany stated that, "EBay’s actions and failure to act have caused and will continue to cause immediate and irreparable harm to Tiffany and to the substantial goodwill embodied in Tiffany’s registered trademarks."

The company contends, in its suit, that eBay knew perfectly well that the Tiffany name was being used falsely to promote counterfeit goods, and that the company’s logo even showed up on Google and Yahoo search screens promoting the sale of those fakes.

The Rowling suit has potential major implications for eBay should the author prevail. EBay’s entire business model could potentially be affected, as well as the myriad buyers and sellers who make their livings on the site, full-time in many instances. Many sellers on the site do well offering brand name items to buyers. As the suit from Tiffany, and the pressure from the other major retailers have shown, significant portions of those brand name items are unauthenticated.

The Harry Potter suit was purposely filed in India to take advantage of the country’s copyright laws, which hold a company responsible if is users infringe on established copyright within that company’s “premises.” In this case, those premises are the modern day Wild West of the Internet.

EBay, for its part, has tried to be proactive in addressing the problem. In the complaint filed by Tiffany in 2004, eBay stated that it removed almost 20,000 auctions, all spotted by Tiffany employees, which featured illegitimate products. Tiffany has also pressed its users to police their own listings for counterfeits, as well as through its Verified Rights Owner Program. Tiffany’s suit is expected to go to court before the end of 2007.

Nor is eBay taking the heightened criticism lying down. The company filed an application for suit with the Indian Justice, A.K. Sikri, stating that, "J.K. Rowling and her representatives are spreading misinformation about two (Indian High Court) stay orders. The distorted manner in which wide publicity is given in the media – print and electronic – has caused immense harassment and humiliation to eBay and also damaged its goodwill and reputation."

Little is expected in the way of action on the Rowling suit before May 2008, the next scheduled hearing for the Indian high court.