After news that Tiffany company was taking eBay to court over counterfeit goods, it’s now the software industry telling eBay that it needs to do more to detect and delete listings for counterfeit goods–or else.

I took the liberty to validate such claims by browsing through the many software titles offered at eBay, and to my surprise its worst than you think. I contacted a seller to ask if the software was genuine because the price was 80% less than the retail version. The seller replied with “It’s a copy with the CD key and I guarantee the software”.

According to Software and Information Industry Association (SIIA), a Washington, D.C., trade association that counts companies such as Intuit, Sun Microsystems, and Red Hat as board members, said on Thursday that it’s contemplating a lawsuit against eBay. Another option, the group said, would be lobbying Congress to rewrite the Digital Millennium Copyright Act and make online auctioneers liable for what’s sold.

“Their refusal to work with us will only push us closer and closer to a lawsuit,” Keith Kupferschmid, SIIA’s senior vice president for intellectual property policy and enforcement, said in an interview.

Kupferschmid said the SIIA has offered at least 20 suggestions to eBay listing ways it can aid the software industry in curbing the sale of pirated software. Among the suggestions: not allowing the “Buy It Now” option on software; placing a notice in a user’s feedback if they have been caught selling pirated software; adding a delay on software auctions so they can be reviewed; and permitting the SIIA to run a paid ad on the Web site telling eBay visitors about the risk of buying pirated software.

“They just say no,” Kupferschmid said. “We’ve never been given any rationale.”