DESTROY ALL COUNTERFEITS! - eBay's New June 2009 User Agreement

DESTROY ALL COUNTERFEITS! - eBay's New June 2009 User Agreement
14 May 2009
EventHorizon1984
Commentary

We made a condensed comment on the AuctionByte blog "eBay Revises Fakes Policy: Return, not Destroy".  What follows is a full article.

The material in this article is provided to you free of charge, "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

Basically talk to a attorney figuratively face-to-face when seeking legal advice.  Not that we're dispensing any.

The May 13th AuctionBytes articles "eBay's New Policy Instructs Buyers to Destroy Fakes" and "Questions over eBay's New Fakes Policy" brought to light a section in eBay's User Agreement, that would be implemented 14 June 2009.

• For covered claims that meet the conditions and are not excluded, buyers are required to destroy an item if they claim it is not authentic. Once a buyer confirms destruction of the item, eBay will reimburse the buyer.
• For covered claims that meet the conditions and are not excluded, sellers agree to not hold buyers or eBay responsible for the destruction of an item if it is not believed to be authentic

Looking at the California statutes, eBay INC being located in the State of California, this type of action is covered under "California Criminal Law", "Crimes Against Property", "Larceny", "Grand Theft", etal. 

All 50 U.S. States and U.S. Territories have similar laws.  Then there's the matter of Interstate Commerce, and it's coverage by the U.S. Attorney General and the F.B.I.

And yes, there's more.

A day later someone at eBay with a legal background must have read the MBA produced User Agreement.

***Updated: Changes to the eBay User Agreement***
May 14, 2009 | 04:46PM PST/PT

Scott Shipman

On May 15, eBay will be releasing a revised user agreement. This revision will address the obligations of buyers and sellers in transactions where a buyer has alleged receipt of a counterfeit item.

Under the revised agreement:

• Buyers and sellers shall work in good faith during the resolution process to determine that the item is not counterfeit.
• If buyer and seller cannot determine that the item is not counterfeit, buyers are required to send the item back to the seller. Cost of return shipping will be paid by the buyer or eBay, unless both buyer and seller have agreed otherwise.
• Covered claims that meet the conditions and are not excluded will count as a violation by the seller of our prohibited and infringing items policy.
• If eBay determines the buyer is not acting in good faith, eBay may restrict or eliminate their ability to return items or make future claims.
• Sellers shall not list, advertise, or cause that item to appear for sale, barter or trade, on any eBay Inc. web site or service.

These revisions to the user agreement are being made to:

• Provide sellers protections against inaccurate counterfeit claims.
• Provide buyers assurances about the authenticity of the item received.
• Maintain integrity of the eBay marketplace.

The new User Agreement is effective immediately for new members registering on or after today, and on June 14, 2009, for current members. You don't need to do anything to accept the new User Agreement. If you don't wish to accept it, you can follow these instructions to close your account.

Sincerely,
Scott Shipman
Senior Counsel
eBay Inc.

For the casual reader, these are eBay User Agreement sections being referenced:

http://pages.ebay.com/help/policies/user-agreement.html

Buyer Obligations:

• Buyers agree to file claims in accordance with the conditions, exclusions and coverage limitations as further explained in the eBay Purchase Protection policy.

• For covered claims that meet the conditions and are not excluded, eBay will reimburse eligible buyers by PayPal or by coupon redeemable on eBay, in eBay’s discretion, based upon a number of factors, such as whether the buyer has a PayPal account, the type of payment made to the seller and the payment amount.

• Buyers who eBay believes are not acting in good faith, abusing the program or a seller, attempting to commit or committing fraud, or trying to unjustly benefit from the program may become ineligible for eBay Purchase Protection. Buyers who become ineligible will be notified by eBay prior to ineligibility.  eBay reserves the right to temporarily, indefinitely or permanently suspend the eBay Purchase Protection program immediately if we suspect abuse, excessive claims, tampering, or interference with the proper working of the program.

• eBay Purchase Protection doesn’t cover certain types and categories of goods or services, false, abusive or illegitimate claims, or transactions where you have been or may be compensated from another third party. Please read the eBay Purchase Protection policy for more details.

 Seller Obligations:

• Sellers agree to follow the program requirements as explained in the eBay Purchase Protection policy.

• All sellers with an open claim must work in good faith to resolve the claim, refund money and/or provide a replacement item, and accept a return of the item as explained by the eBay Purchase Protection Policy.

• If a seller doesn't resolve a claim, the seller agrees to pay eBay the amount paid by eBay to the buyer in accordance with the eBay Purchase Protection policy. eBay will invoice the seller for these amounts and seller agrees to pay eBay in accordance with the invoice terms.

Obligations when a buyer opens a claim alleging an item is counterfeit:

• Sellers shall work with the buyer in good faith during the resolution process to provide buyer with appropriate documentation or other assurances to satisfy the buyer that the item is not counterfeit, if such information is available.

• If buyer and seller cannot agree that the item is not counterfeit, for covered claims that meet the conditions and are not excluded, buyers are required to send the item back to the seller. Cost of return shipping will be paid by the buyer or eBay in our sole discretion, unless otherwise agreed upon by the buyer and seller.

• Covered claims that meet the conditions and are not excluded will count as a violation by the seller of our prohibited and infringing items policy.

• Sellers shall not list, advertise, or cause that item to appear for sale, barter or trade, on any eBay Inc. (including our subsidiaries, joint ventures, and other members of the group) web site or service located around the world.

• While buyers are not obligated to provide third party confirmation that an item is counterfeit in order to open a claim, in cases where there is written confirmation from the manufacturer that the item is counterfeit, or in additional circumstances where eBay elects to exercise its discretion, eBay may request the destruction of the item by an authorized third party and at eBay’s expense.

Let us briefly go through the new legalize.  Keep in mind that legal documents are written to minimize, or eliminate, vague, and subject to multiple interpretation, language.  At least that is the goal.

Condensing the above counterfeit section down to a more understandable form:

• "If buyer and seller cannot agree that the item is not counterfeit" this "will count as a violation by the seller of our prohibited and infringing items policy", and "buyers are not obligated to provide third party confirmation that an item is counterfeit".

Same as Scott Shipman's announcement, got it?

This part is solid:

• "in cases where there is written confirmation from the manufacturer that the item is counterfeit"

However there remains more language that eBay's legal team must clean up.  Which is not necessarily Scott Shipman's pervue. See http://news.ebay.com/team.cfm Michael Jacobson, eBay Senior Vice President and General Counsel.

Take a look at this:

• "or in additional circumstances where eBay elects to exercise its discretion, eBay may request the destruction of the item by an authorized third party and at eBay’s expense."

Read it very carefully.  eBay can destroy seller property when "eBay elects to exercise its discretion".  This part does not clearly explain "discretion".  In less legalize, "discretion" could be very very very very loosely replaced with 'whim'.

This has a bit more clarity:

•  "eBay may request the destruction of the item by an authorized third party".

But lacks the explanation of what happens should eBay NOT request destruction.  Because of the word "may", the statement can be interpreted as:

• "or in additional circumstances where eBay elects to exercise its discretion, eBay may or may not request the destruction of the item by an authorized third party and at eBay’s expense."

Consider what happens in the event that eBay does NOT request destruction of the item?  Do you know what happens to the seller's item?  There are multiple possibilities, indicating that this part is vague, and NOT clearly written.

Eventually eBay's legal team needs to put in a list of authorized third parties that will be used for destruction.  That is fairly minor though.

This part is not minor:

• "at eBay’s expense."

This CAN be interpreted as, 'eBay will pay for the cost of destruction'.  Fine, but incomplete.  Remember IN CONTEXT "at eBay’s expense" refers to the cost of destruction PERIOD.

Lets revisit the original issue in the original User Agreement.  eBay makes the buyer whole and pays for destruction of a seller's item, but THEN who ultimately pays for the money given back to the buyer?  The rewritten user agreement remains ambiguous or missing in this matter.

Consider what happens when a seller resolves the claim in good faith, informs the buyer to return the item for a refund, the buyer maintains the item is counterfeit, and eBay chooses to "exercise its discretion"?

• "If a seller doesn't resolve a claim, the seller agrees to pay eBay the amount paid by eBay to the buyer"

Is it likely that this provision, under Seller Obligations, would be applied whereby eBay unilaterally chooses to "exercise its discretion", declares the claim is not resolved, and eBay has the now seller's item destroyed?

• "eBay will invoice the seller for these amounts and seller agrees to pay eBay in accordance with the invoice terms."

Anyone notice there is more 'whim' in the new rewritten user agreement?  Is this deliberate or an oversight?

And as William Cobb would put it, soooo Is there more?  Yes. 

Think it's time to hit to personally hit the word processor Michael Jacobson ESQ, and clean up this mess?

"It's sort of an obsession with me to do the best I can for a client. My clients aren't blameless. Many of them are crooks. Probably a lot of them are guilty. That's not for me to determine. That's for a jury to determine."
Perry Mason

"The character of every act depends upon the circumstances in which it is done."
Oliver Wendell Holmes JR, U.S. Supreme Court

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The "DESTROY ALL COUNTERFEITS!" is homage to the Toho Company movie "Kaiju soshingeki" or "Destroy All Monsters!" (1968).

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eBay Media Center - Senior Management
http://news.ebay.com/team.cfm

Michael Jacobson
Senior Vice President and General Counsel, eBay Inc.

Download image

As senior vice president and general counsel at eBay, Mike Jacobson's responsibilities include overseeing eBay's legal department, its risk management program, and its policy group. He is responsible for interactions with content regulators, law enforcement, contracts, SEC compliance, and other legal matters. Prior to eBay, Mike was a partner with Cooley Godward LLP where he was recognized as an expert in securities law. His responsibilities included corporate and securities transactions, including mergers and acquisition transactions, public offerings, and venture capital financing. Mike earned a Bachelor of Arts in Economics, Magna Cum Laude, in 1975 from Harvard College, where he was a member of Phi Beta Kappa. He subsequently received his law degree from Stanford University in 1981, where he was a Nathan Abbot Scholar and a member of Order of the Coif. He also received the Hilmer Oehlmann Jr. award as well as first and second year honors.

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Notable Comments

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Questions over eBay's New Fakes Policy
by: Grab your torches

Wed May 13 14:28:53 2009
Just calm down, you silly people
When the smoke that you yourselves are generating clears, you'll see that a third party verification is needed. This system is already in place and has been used for a long time.

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4343martino ( 1851) View seller's items | View Blog Well fer sure...every buyer is a honest upstanding citizen of what ever third world country they happen to be in..You should know that by now world-secure....there never has been or ever will be a dishonest e-bay buyer...they dont exist..not in this world or the next..just ask e-bay they will tell ya...LOL>>>What a crock of sh*t e-bay has created with this one..chalk up another one for the lawyers...LOL>>> Mark May-13-09 15:27:25 PDT

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Questions over eBay's New Fakes Policy
by: Grab your torches
Thu May 14 13:45:31 2009

So much hype here.
Where does this false info about mailing counterfeits come from? It is illegal to sell them, yes. Illegal to use USPS to sell them, yes. NOT illegal to use USPS to send them to be authenticated/destroyed.
The eBay UA only states that a buyer must "confirm" that a counterfeit has been destroyed. It says nothing about the manner of that confirmation. The current process for a destroying a counterfeit is not spelled out either. Do you assume this means the buyer just has to say they did? No, they ship it to Texas, where it is supposedly destroyed if counterfeit, or resold if authentic. Is there any reason to believe that this won't be pretty much the same thing?

Any idiot knows that if all eBay will require is a buyer saying they destroyed it, then this cannot possibly be legal. Why then, do you all believe this is what eBay is going to do?

It seems much more likely that the user agreement is being left deliberately vague, for any number of reasons.

I swear, Ina could tell you that eBay Singapore was adding a category for human trafficking and you would all eat it up and repeat it everywhere.
Clowns, all of you.

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Questions over eBay's New Fakes Policy
by: Grab your torches
Thu May 14 14:18:52 2009

Why doesn't somebody here just go ahead and buy a fake purse? Do it. You'll be making the world a better place removing a counterfeit. Much better than reporting it, getting the listing removed so the seller can peddle it somewhere else. Actually buy it and the fake seller is out the money and the counterfeit.
Now, tell eBay it's a fake and see what they ask you to do.

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Questions over eBay's New Fakes Policy
by: Grab your torches
Thu May 14 15:04:12 2009

"If ebay doesn't want incorrect information floating around about ANY of its policies, then the policy should be completely transparent and 100% of it posted."

Seriously? This is a defense?
I would like a little more clarity over this policy as well, but that DOES NOT JUSTIFY MAKING THINGS UP!

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Questions over eBay's New Fakes Policy
by: Grab your torches
Thu May 14 15:11:55 2009

Some secret policies are good.
The list of words in a title that restrict how many of a certain thing you can sell, for example. Make that known and people selling counterfeits know exactly what to avoid.
Exactly how best match works also. Remember when some unscrupulous sellers figured out to put NEW NEW NEW in the title to push their items to the top?

While I do not see the logic behind their vagueness in this case, I wont deign to say that it does not exist. I can't say with any certainty that 100% transparency wouldn't create an opening for the counterfeit sellers to abuse.

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