This guide explains how an eBayer in Chicago recently filed a legal action to restrain a competitor from sending VERO take-down requests to eBay alleging copyright violation in goods they never held a valid copyright over.
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Ebay's Verified Rights Owner (VeRO) Program Take-Down Procedure

This guide examines the legality of the eBay VeRo take-down procedure. If you trade on eBay you may know what it is like when one of your competitors requests eBay to take-down your listings based on alleged violations of copyright. What happens when you follow eBay's procedures to fight back but they don't work? This guide explains what other legal options you have to stop your competitor doing this.

If you run a small business selling products through an online auction site such as eBay you would be very familiar with how frustrating it can be when you are faced with fake take-down notices by a rival trader who claims that your auction listing infringes their copyright rights. Unfortunately these kinds of fake take-down notices under the eBay VeRO program are becoming more and more common, and are often not legitimate.

You make your living by selling your goods on eBay through e-commerce, but eBay VeRO take-downs are causing you to lose profits and customers to your competitors or other third-parties issuing fake take-down notices. You have tried to fight back to prevent these fake take-down notices by filing a counter-notice under the eBay VeRO program but eBay has just accepted the allegations made in the take-down notice that you have infringed a copyright owners' rights.

The Digital Millenium Copyright Act (DMCA) was enacted by the US Congress to stop infringement of copyright which occurs through the illegal reproduction of copyright on the internet. It was designed to encourage co-operation between copyright owners and online service providers like Internet Service Providers and other online intermediaries such as eBay from being held liable for copyright infringement liability, but only if they take prompt action to remove the allegedly infringing material. This is known as "safe harbor" protection, and eBay's VERO program was developed to try to comply with the provisions of the DMCA to claim the immunity.

When the copyright owner contacts the service provider, ISP or web hosting company providing details of the infringement, the service provider who receives a notice of infringement is entitled to disable the website, therefore if eBay believe the take-down notice is valid they are able to disable your auction. By taking such action eBay are protecting themselves from infringement. eBay doesn't have to conduct much investigation to determine that material is infringing.

However under the provisions of the DMCA and equivalent provisions in other jurisdictions you are entitled to be notified that the allegedly infringing material has been removed and are given an opportunity to send a written notice to eBay stating that you believe your material has been wrongly removed.

As an eBay trader you know you have the option of filing a counter-notice if you have good reason to believe that the take-down is unfair or illegal.

The problem is that service providers are pressured to take down materials to protect themselves from liability. Although eBay provides a means of explaining to eBay traders how to have their auctions re-instated, the reality is that counter-notice is either not investigated adequately or wrongly rejected by eBay. You unjustly receive a negative mark against your name as a trader which can accumulate and can eventually get you suspended from eBay even though you were the innocent party.

Take-downs based on alleged copyright infringement are often bogus, fraudulent and an abuse of the law. Abusive take-down notices which are bogus occur often because companies want to control who is selling their product. Companies also want to prevent sellers competing with their authorised dealers and rely on the small seller either not knowing or taking the trouble to fight a fraudulent take-down notice. Your rivals will also file take-down notices to try to eliminate their competition. The DMCA makes it very easy for unscrupulous traders to file fake take-down notices.

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