Court Protects eBay

December 1, 2000

A ruling was recently handed down from a San Francisco court, holding that eBay has not violated any copyright provisions by auctioning copied material on its website. The court reasoned that this eBay falls under the Communications Decency Act and pursuant to that is not liable for claims of unfair business practice. The rationale is that eBay was not the publisher of this recorded material and therefore, under the law cannot be held liable for the acts of the third party. The distinction being made here is that eBay falls under the Communications Decency Act because it is an interactive computer service. If eBay were a brick and mortar company the result in this case may well have been different.

The issue now presented is that some Internet businesses are afforded immunities that brick and mortar business are not, simply because the Internet businesses are protected under the Communications Decency Act. It is possible that Congress will re-evaluate the provisions of this immunity clause. However that re-evaluation will have to be balanced against the fact that such a revision of the clause could put some of the Internet businesses out of operation, not to mention that any revision would have to be very carefully drafted. Up until now, that provision has quite reasonably protected ISP’s from liability in defamation suits where a customer has posted defamatory material. This case is a somewhat new application of the statute.

In addition to a suit being filed against eBay, there are other auction sites that are under investigation for selling pirated material (typically software) over the Internet.

Buyers should be wary of certain materials being sold over the Net. In the case of software, for example, innocent purchasing might not provide an adequate defense to use of illegally copied material.