Here's the responses I received from E-bay regarding this issue. I had to ask two questions.

QUESTION #1
Posted by mweaver@earthlink.net (7) on 11/28/98 at 22:06:37 PST

What is E-Bay's policy regarding Sellers using URL's of pictures of items that are located on someone elses site without that persons permission.

mweaver@earthlink.net at 22:06:37 PST,

eBay cannot prevent another seller from linking to another seller's web server and "borrowing" their images. However, there are steps they can take to prevent this type of activity. First, a seller should always send a polite email to the other seller requesting they not link to your web server. If they ignore your request, the seller can delete the image file from their web server (if they are not using the image at the same time!) This will usually get the point across.

Finally, if none of these steps prevents the user from continued theft, they can send a note to support@ebay.com and we will warn them ourselves.

Please note that this does not cover instances where a seller has downloaded another seller's image to their hard drive and then uploaded the copy to their own server. In this instance, they would have no recourse if the image itself is not copyrighted.

QUESTION #2
Posted by mweaver@earthlink.net (7) on 11/28/98 at 22:58:02 PST

A follow up question to my previous message. What if the Seller of an item is not contacting the person who has the image loaded on their site, and the person's who's URL image is being used changes the image on their site. For instance I collect Casino Tokens and have them pictured on my site. I have a token "Flamingo.gif" that is worth only about lets say $15. However, at the same time a seller uploads their item for sell on E-Bay and then I upload a different token to my web site with the same name from the same casino which is almost identical but with a minor difference which makes this token worth $500.00. Isn't the Seller responsible to bidder in making good on this auction for the token that is depicted? The person's who's URL was used may not even be aware that their URL is being used on E-bay and may not even be a user of E-bay or even know of it. What is E-bay's stand on this issue.

Posted by robin@ebay.com (62) on 11/28/98 at 23:40:05 PST

mweaver@earthlink.net at 22:58:02 PST,

Well, per our User Agreement (available via the 'Site Map'):
eBay is Only a Venue. Our site acts as the venue for sellers to conduct auctions and for bidders to bid on sellers' auctions. We are not involved in the actual transaction between buyers and sellers. As a result, we have no control over the quality, safety or legality of the items advertised, the truth or accuracy of the listings, the ability of sellers to sell items or the ability of buyers to buy items.

The reason for this is obvious. We do not handle the merchandise. We provide our on-line service much in the same way that a newspaper provides a classified section for items for sale. Therefore we cannot guarantee the accuracy or veracity of the listing information especially in cases where merchandise is not described properly or completely. Potential bidders are encouraged to contact the seller directly with any questions regarding age, authenticity, condition etc before bidding.
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I can agree to a point but using a newspaper advertisement in the classified section doesn't really work here. The classified usually doesn't include a picuture of the item. In that case the potential buyer usually contacts the seller to view the item, and if there is a problem they can discuss it and the buyer may pass.

In this case the seller has posted a picture of the item and the potential buyer can definately decide to whether or not the item is what they are purchasing.

I think there could be reprocussions to E-Bay. As they could have a rule that URL images cannot be used without permission from the owner of the site or disallow the practice totally.