Tiffany is suing eBay for allowing sellers to list and sell counterfeit Tiffany items on the site in America according to an article in the New York Times.

The newspaper suggests that if Tiffany wins its case, not only would other lawsuits follow, but eBay's very business model would be threatened because it would be nearly impossible for the company to police a site that now has 180 million members and 60 million items for sale at any one time.

eBay is arguing that it has no obligation to investigate counterfeiting claims unless the complaint comes from a "rights owner", a party holding a trademark or copyright. A mere buyer who believes an item is a fake has almost no recourse.

"We never take possession of the goods sold through eBay, and we don't have any expertise", said Hani Durzy, an eBay spokesman told the newspaper. "We're not clothing experts. We're not car experts, and we're not jewellery experts. We're experts at building a marketplace and bringing buyers and sellers together."

In 2004, Tiffany secretly purchased about 200 items from eBay in its investigation of how the company was dealing with the thousands of pieces of counterfeit Tiffany jewellery. A jeweller found that three out of four pieces were fakes.

The case will go to trial by the end of this year an attorney with Arnold & Porter, a law firm representing Tiffany told the paper.