On July 6, 2015, the U.S. Court of Appeals for the Ninth Circuit reversed a decision of a federal court in Los Angeles holding that Amazon’s search results, in a specific instance, did not constitute trademark infringement.
Multi-Time Machine, Inc. (“MTM”) makes MTM Special Ops watches, which are high-end military-style time pieces. MTM does not sell its watches on Amazon, nor does it allow its distributors to sell its watches on Amazon.
Consumers, however, from time-to-time, have entered “MTM Special Ops” (or the like) in the search box on Amazon.com, and, according to the Ninth Circuit’s opinion, the search results returned a list of other military-style watches from MTM’s competitors, even though “MTM Special Ops” was still listed in the search box and elsewhere on the search results page.
According to the Ninth Circuit’s opinion, Amazon’s returned search results did not indicate that it did not offer MTM’s watches for sale. In the same breath, the Ninth Circuit indicated that some of Amazon’s competitors (buy.com and overstock.com) will return competitor’s products in their search results, but will also indicate that the searched-for products are not available on their respective sites. This point seemed to be a big deal to the Ninth Circuit in reaching its conclusion that the district court’s ruling in favor of Amazon was erroneous.
In essence, the Ninth Circuit said that a reasonable jury could find that the manner in which Amazon responded to a search query, in this case, could lead to “initial interest confusion” among consumers. “Initial interest confusion” occurs not when a consumer is confused about the source of a product at the time of purchase, but rather, prior to the time of purchase where a trademark owner’s mark is used to generate interest in a competitor’s product. The Ninth Circuit said this is a problem because “[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.” Opinion at 9.
The Ninth Circuit ultimately said that the weighing of the evidence, and the ultimate determination of whether or not there is trademark infringement, is for a jury to decide.
This is, potentially, a very important ruling. Amazon is well-known and established as a (or “the”) premier e-commerce platform. At some level, it might not be difficult for Amazon to change how its search results are generated on the back-end to avoid this potential problem. This ruling, however, if the jury ultimately finds that there was trademark infringement here, could be seen as a general victory to trademark owners who might have experienced the same or similar issues with Amazon’s search results in the past. The Ninth Circuit noted that Amazon did not appear to take any corrective measures to avoid this problem in this case. Whether that has happened to others, or whether it constitutes trademark infringement when a search query on Amazon for a specific company’s products that are available on Amazon returns another company’s similar products, is not detailed in the Ninth Circuit’s opinion. At any rate, the case will now head back to the trial court in Los Angeles for a jury trial.