The decision in this case should be of great concern to trademark owners who face the widespread counterfeiting by eBay and other online marketplaces, like uBid, iOffer, Craigslist, and Amazon, to name just a few. But should it also be of concern to copyright owners whose pirated products are offered by sellers on eBay?

While this case may have some bearing on any copyright infringement case brought by a copyright owner against eBay, in fact, the standards applied are likely to be very different. Unlike trademark law, the copyright statute actually addresses this issue to some degree under the Digital Millennium Copyright Act (DMCA). The DMCA establishes explicit standards for ISPs to eliminate their potential liability for contributory and vicarious copyright liability that is quite different from the Inwood “reason to know” standard. The DMCA states that an ISP (such as eBay) may not be liable if it did not have “actual knowledge” of the infringing activity and was “not aware of facts or circumstances from which infringing activity is apparent.”

While the DMCA establishes standards for determining when an ISP cannot be liable for the infringements of its users, there are also numerous cases on the books where the courts have affirmatively defined when an party can be held contributorily or vicariously liable for copyright infringements engaged in by another party. And recently many courts have applied these standards in copyright infringement cases to determine the liability of online marketplaces, such as cases like A&M Records, Inc. v. Napster, Inc. and MGM v. Grokster. An analysis of these cases is well beyond the scope of this discussion. I raise them and the DMCA only to point out that if eBay were to face a similar suit in the context of copyright infringement claims it’s likely the result, and certain that the analysis, would be significantly different.

This is certainly not the last word on this issue. In fact, Tiffany has already announced its intention to appeal the case to the Second Circuit court. This is a big issue for rights holders and online marketplaces like eBay. It’s not likely to go away anytime soon.