The Ninth Circuit recently held that online retailer Amazon.com could be liable for infringing the trademarks of a watch manufacturer based upon Amazon’s product search results when shoppers search for the manufacturer’s trademarked watches that Amazon does not carry. In a 2-1 decision intersecting trademark law and technology, the Circuit in Multi Time Machine, Inc. v. Amazon.com, Inc. reversed the Central District of California’s summary judgment finding that the plaintiff, who manufactures high-end military style watches, could not prove the necessary likelihood of consumer confusion to establish trademark infringement under the Lanham Act.
Specifically, the Ninth Circuit held that a jury could find that Amazon had created a likelihood of confusion under an “initial interest confusion” theory by responding to a search request for plaintiff’s MTM Special Ops watches with a page showing “MTM Special Ops” three times above a search result displaying similar watches manufactured by the plaintiff’s competitors that Amazon does sell. Because Amazon’s website (unlike websites like Buy.com and Overstock.com) does not state that Amazon does not carry the plaintiff’s watches, consumers “might be confused into thinking a relationship exists” between the competitors whose watches Amazon does sell and plaintiff, and consumers “might look into buying a [competitor’s] watch, rather than junk the quest altogether and seek to buy [plaintiff’s] watch elsewhere.”
The majority explained that “[i]nitial interest confusion occurs not where a customer is confused about the source of a product at the time of purchase, but earlier in the shopping process, if customer confusion creates initial interest in a competitor’s product.” The Court went on to explain that “[e]ven if that confusion is dispelled before an actual sale occurs, initial interest confusion still constitutes trademark infringement because it impermissibly capitalizes on the goodwill associated with a mark and is therefore actionable trademark infringement.”
Judge Silverman dissented. He explained that, “[b]ecause Amazon’s search results page clearly labels the name and manufacturer of each product offered for sale and even includes photographs of the items, no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products.” In addition, the dissent likened Amazon’s offering of competing products in response to searches for plaintiff’s trademarked watches to a diner waiter responding to a customer’s order for Coke by informing the customer that the diner only carries Pepsi. [One observation: such a response by the waiter is more like Buy.com, because it indicates that “we do not have Coke.”]
Although the Ninth Circuit’s decision in Multi Time Machine does not yet establish any liability for Amazon, it is significant in that it permits a trademark owner to bring suit over search results shown by online sellers, even those that disclose the source of the products. This ruling could inspire the filing of more trademark lawsuits against other online retailers relating to the manner in which they display their product search results and/or cause online retailers to disclose that they do not carry the product searched for before showing other suggestions.