To protect the rights of owners of intellectual property, eBay has created a program called the “Verified Rights Owner” program (“VeRO”). eBay is an enormous online platform for retailers selling new and second-hand merchandise. eBay has millions of sellers and buyers.

One problem with online sales platforms like eBay is that some sellers will sell counterfeit merchandise. That is, merchandise will be offered and sold that is alleged to be from a certain brand or manufacturer, but it is not. It is unlawful to infringe upon the intellectual property of others. Owners of trademarks, copyrights and other intellectual property are constantly monitoring eBay sales listing for infringing product listing. The VeRO program is an easy mechanism for owners of intellectual property to notify eBay of fraudulent listings and for having such listings removed.

Participation, or “membership,” in the VeRO program is straightforward. Intellectual property owners who believe that a listing violates their trademarks or copyrights complete an electronic “Notice of Claimed Infringement” (“NOCI”). To complete the NOCI, an intellectual property owner provides basic information on their ownership and information with respect to the infringing eBay listing. Owners must also certify under penalty of perjury that they are, in fact, the owner of the trademark or copyright that they have “good faith belief” that the listing is infringing on their intellectual property. Examples of violations that can be reported include

• Listings or items containing authorized trademarks
• Listings that falsely claim association with or authorization from a trademark holder, such as falsely claiming to be an authorized dealer of certain company merchandise
• Listings of counterfeit or replica items
• Listings or product pages that use of copyrighted content without authorization
• And more

As part of the VeRO program, eBay has established a comprehensive set of rules for their sellers with respect to intellectual property rights. For example, eBay expressly prohibits sellers from infringing copyrights and trademarks and eBay will terminate seller listings and seller accounts for multiple violations of the rules.

Why has eBay established the VeRO program? eBay claims the purpose of the VeRO program is to create a “safe space” for consumers to buy and sell merchandise and to protect owners of intellectual property. While these reasons are likely true, eBay is also required to create something like the VeRO program to avoid being liable for contributory infringement. eBay can be likened to an enormous online flea market. In the past, courts have held that certain sales platforms — like a flea market — have certain responsibilities when it comes to protecting intellectual property rights. If a sales platform is aware of infringing behaviors and does not do something to stop the infringing behavior, then the sales platform can be held liable for the infringement. By allowing the infringement, the sales platform has contributed to the infringement and, thus, is liable for contributory infringement. The punishments for contributory infringement are generally the same as for the original infringer.

The courts consider a number of factors when evaluating whether a sales platform is contributorily liable for infringement. Among the factors are whether the platform has a mechanism for notice by owners and whether the platform takes actions to stop infringing behavior. The eBay VeRO program is aimed at both factors — it provides a mechanism for notice and allows eBay to remove listings and sellers that are engaged in infringing behavior.

For more information, contact the trusted internet lawyers at Revision Legal at 231-714-0100.

The Legal Framework Underlying VeRO

The eBay VeRO program is grounded in the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512, which provides a safe harbor for online platforms against copyright infringement liability provided they comply with the notice-and-takedown system. eBay’s NOCI process is essentially the DMCA takedown mechanism applied to its platform. When a rights holder submits a NOCI and eBay removes the listing, eBay’s DMCA safe harbor is preserved. This creates a structural incentive for eBay to act on NOCI submissions promptly and without deep scrutiny of their merits.

For trademark claims, the legal basis is slightly different—the Lanham Act (15 U.S.C. § 1125) does not include an equivalent safe harbor provision, but eBay has developed its own policies modeled on DMCA procedures. The Supreme Court’s decision in eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), while decided in the patent context, broadly affirmed eBay’s rights to set its own internal enforcement policies for its marketplace.

False VeRO Reports: Your Legal Remedies

Because VeRO relies on self-certification by rights holders rather than judicial review, the system is subject to abuse. Competitors and bad-faith actors sometimes file VeRO reports against legitimate listings to gain marketplace advantage. If you are the target of a false VeRO report, you have several legal options:

• DMCA counter-notification — Under 17 U.S.C. § 512(g), a seller who believes a copyright takedown was improper may file a counter-notification with eBay. If the rights holder does not file a lawsuit within 10-14 business days of receiving the counter-notification, eBay is required to restore the listing.
• Declaratory judgment action — A seller can file suit in federal court seeking a declaration of non-infringement. This puts the burden on the rights holder to either litigate or withdraw the claim.
• DMCA § 512(f) claim — Any person who “knowingly materially misrepresents” that material is infringing is liable for any resulting damages, including attorney’s fees. Proving knowing misrepresentation is a high bar, but successful claims have been upheld by courts including in Online Policy Group v. Diebold, Inc., 337 F. Supp. 2d 1195 (N.D. Cal. 2004).
• Tortious interference and unfair competition claims — Under state law, filing false VeRO reports to disable a competitor’s listings may support claims for tortious interference with business relations or unfair competition.

Proactive IP Protection for eBay Sellers

For brand owners using VeRO to protect their IP, maintaining an active and properly documented rights owner profile on eBay is essential. Keep registration certificates, copyright registration numbers, and licensing documentation current and accessible. Target enforcement efforts at listings that clearly infringe—not at gray-market sales of genuine goods, which are protected by the first sale doctrine and do not constitute infringement under the Lanham Act absent material differences in the goods.

For sellers facing recurring VeRO enforcement by a single rights holder, consider seeking a proactive license agreement. An authorized reseller relationship eliminates the risk of VeRO removal and, depending on the brand’s policies, can be formalized through a simple authorization letter or a more comprehensive distribution agreement.

Contact Revision Legal

If you have questions about the issues discussed in this article, contact the experienced attorneys at Revision Legal. We handle intellectual property, internet law, and business law matters for clients across the country. Contact us online or call us at 1-855-RL-LEGAL.