• by Wendy Davis  @wendyndavis, July 22, 2009

Fashion footwear retailer Steve Madden is suing eBay over fake watches on the auction site.

The shoemaker alleges that another company has been selling counterfeits on eBay that are wrongly labeled as "Steve Madden" watches. Madden, which is suing for trademark infringement, says it has never marketed or licensed watches. The company alleges that it only learned of the fakes on eBay after customers complained about defective watches.

The retailer says it unsuccessfully asked eBay to delete all listings for Steve Madden watches. "EBay, for its own convenience and profit, has failed to take any steps to police the eBay auction site to the detriment of Madden," the lawsuit alleges. The case was filed Tuesday in federal district court in Manhattan.

Last year, eBay prevailed in a similar lawsuit brought by jeweler Tiffany. In that case, U.S. District Court Judge Richard Sullivan in New York rejected Tiffany's assertion that eBay did not do enough to thwart counterfeiters.

Tiffany had wanted eBay to take steps to prohibit sellers from listing five or more Tiffany items, but eBay said it need not prevent people from selling goods that could be legitimate. eBay also said it immediately removed counterfeits once it had reason to know they were fake.

Sullivan, who presided over a trial in the case, ruled that eBay's practice of removing items in response to notices from Tiffany was sufficient to ward off liability. The 2nd Circuit Court of Appeals is currently considering Tiffany's appeal in the case.

But Madden might have a stronger case against eBay because the shoe retailer allegedly told eBay that all "Steve Madden" watches are counterfeit. In the Tiffany situation, at least some of the jewelry was genuine.

Trademark lawyer Martin Schwimmer says this distinction could result in a different outcome. "Here, Steve Madden is in a position to say that 100% of all Steve Madden watches are infringing," he says. Also, he says, eBay might have been able to easily police its site by screening for Steve Madden watches.