Intellectual Property Abuse, eBay, and Consumers

by Greg Beck

InfoWorld’s Ed Foster has an interesting piece on a growing problem for consumers: intellectual property abuse on eBay.  As I’ve previously written, some companies would rather if consumers did not have the option of buying less-expensive used products online. By taking advantage of the Digital Millennium Copyright Act's takedown provisions, companies claiming copyright infringement can automatically remove used or competing products from the Internet without having to go to court.  Foster correctly notes that wrongful claims of trademark infringement can be a bigger problem than copyright.  Unlike copyright claims, trademark claims provide the target with none of the DMCA's procedural protections for wrongful terminations. Thus, companies are able to terminate any eBay auction at will, leaving the target without any recourse short of filing a lawsuit and obtaining a declaratory judgment.

The examples of abuse are numerous. Last year, Public Citizen filed suit against a company targeting low-priced generic competition in this way.  The company agreed to reimburse the seller for his lost sales.