eBay has won a major legal victory today, after a federal judge ruled that Tiffany was not able to prove the online auction company was responsible for the sale of counterfeit Tiffany jewelry on its Web site.

The 2004 lawsuit brought by Tiffany in U.S. District Court in New York and the ruling in eBay’s favor could influence how business is done online.

Tiffany claimed that eBay ignored the sale of fake Tiffany silver jewelry on its site. eBay said the jeweler did not participate in eBay programs that help brand owners prevent fraud.

“The Court concludes that Tiffany has failed to meet its burden in proving its claims,” wrote U.S. District Judge Richard Sullivan in his opinion.

“Tiffany has failed to demonstrate that eBay knowingly encouraged others to dilute Tiffany’s trademarks,” he wrote. “Rather, to the extent that eBay may have possessed general knowledge of infringement and dilution by sellers on its Web site, eBay did not possess knowledge or a reason to know of specific instances of trademark infringement or dilution as required under the law.”

eBay said in a statement,”The ruling confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting. The ruling appropriately establishes that protecting brands and trademarks is the primary burden of rights owners.”