Tiffany sued eBay in 2004, claiming that most of the items listed as Tiffany goods on the auction site were fakes. However, a federal court in the Southern District of New York, ruled yesterday that the jeweller was responsible for policing its own trademarks.
If Tiffany had won the case it would have forced eBay to make huge changes to its online auction system to prevent the sale of counterfeit goods, such as taking physical possession of goods on sale to check them for authenticity.
The ruling is a relief for eBay, which was fined £30.6m last month after luxury goods firm LVMH, which owns brands such as Louis Vuitton and Christian Dior, sued the company in a French court.
The US case with Tiffany was considered to be more significant for eBay, due to the size of the market and the risk of a much higher award for damages.
The judge said that when Tiffany notified eBay of suspected counterfeit goods it removed those listings immediately and that it did not have to pre-emptively remove suspicious listings for the jewellery.
To be found liable, the judge said that eBay would have had to let specific sellers of counterfeit items continue to sell on its site even after it knew they were infringing Tiffany's trademark.