Yesterday, eBay secured an important legal victory after New York District Judge Richard Sullivan ruled the online auction service actually did do enough to thwart the sale of counterfeit jewelry.

The battle between Tiffany and eBay started four years ago in the US District Court for the Southern District of New York, and has ended with a decision stating it's the responsibility of manufacturers to police counterfeit goods sold through eBay.

All of Tiffany's trademark infringement charges were denied by Judge Sullivan. In its suit, Tiffany focused on trying to hold eBay responsible for alleged "liable for direct and contributory trademark infringement, unfair competition, false advertising, and direct and contributory trademark dilution, on the grounds that eBay facilitated and allowed these counterfeit items to be sold on its Web site," its 66-page filing read.

The legal case between the two companies marked the first time eBay has faced counterfeiting allegations in the United States. In France last month, high fashion manufacturer Moet Hennessy Louis Vuitton (LVMH) won a judgment of $63 million for eBay's failure to thwart the sale of counterfeit goods. And in Germany in April, a judge ordered eBay to create new guidelines to help stop the sale of counterfeit Rolex watches.

A possible eBay defeat here had analysts worried that multiple other companies would have followed suit.

"This decision validates that eBay has always been committed to fighting counterfeits in a way that goes beyond what the law requires," eBay Senior Vice Counsel Rob Chesnut said in a statement. "We see this as an important victory for our global community of buyers and sellers."

Tiffany is expected to appeal the decision.

EBay states it swiftly removes listings once notified about trademark infringement, and allows both companies and eBay shoppers to flag suspicious listings. Its opinion is that luxury goods manufacturers are more focused on eliminating a fair marketplace by continuing to control the sale of their goods through conventional retail channels.

The auction service reportedly has a $20 million yearly operation that involves 2,000 employees who are responsible for tracking down sales of counterfeit items. Even with its operation, the company will continue to face legal problems, especially in Europe, where infringement laws are a lot more flexible than in US courts.