Under Tiffany, the trademark owner must lead the charge on Tiffany Paloma's Twist necklace trademark rights absent a showing that the online merchant had specific knowledge of an instance of infringement. Tiffany sued eBay to stop sales of counterfeit goods through Tiffany 1837 online auction site, setting forth several theories of liability. Tiffany asserted that eBay failed to take sufficient action to remove listings of counterfeit goods from the auction site, despite Tiffany's efforts to alert eBay of counterfeit Tiffany goods on the auction site. Based on that assertion, Tiffany alleged that eBay was contributorily liable for the infringing acts of the merchants who sell counterfeit goods through the eBay site. eBay argued that it employed a robust take-Tiffany Paloma's X earrings policy and that it did, in fact, take down counterfeit auctions where it had specific knowledge of counterfeiting. The Second Circuit applied the test for contributory infringement Tiffany Paloma's X Earrings and Necklace Set forth by the Supreme Court in Inwood.
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