Multi Time Machine, Inc. v. Amazon.com, Inc.

Holding that a reasonable jury could find that online retailer created a likelihood of consumer confusion through the format of its product search returns, the U.S. Court of Appeals for the Ninth Circuit reversed the district court’s grant of summary judgment in a trademark infringement action filed by a watch company that did not authorize distribution via the online retailor. Multi Time Machine, Inc. v. Amazon.com, Inc. Case No. 13-55575 (9th Cir., July 6, 2015) (Bea, J.) (Silverman, J., dissenting).

Multi Time Machines (MTM) manufactures high-end military-style watches under the trademarks MTM, MTM MILITARY OPS and MTM SPECIAL OPS. MTM does not sell its watches to Amazon.com for resale, and MTM does not authorize its distributors to sell the MTM watches through Amazon. MTM sued Amazon for trademark infringement and sought injunctive relief to bar Amazon from using its trademarks in a particular manner when customers search for MTM’s products on Amazon. After the district court granted summary judgement to Amazon, MTM appealed.

According to the evidence of record, if a customer searches for “MTM Special Ops” watches on Amazon.com, the customer is routed to a screen that displays the customer’s search terms in the query field. Directly below the search query field, the phrase “MTM Special Ops” in quotation marks appears, and then below the quoted phrase, the product name appears again as “Related Searches: MTM Special Ops.” Underneath these three iterations of the MTM search query, Amazon provides an image list and the product names of various men’s watches that are for sale through Amazon.com, including rugged, military-style watches that are manufactured by MTM’s competitors. Customers cannot purchase the watches from the search results page, and they must click on the product links to reach the product detail page. However, once a customer reaches the product detail page, the customer’s initial search inquiry, “MTM Special Ops,” still appears in the Amazon.com search field. The court specifically noted that nothing on Amazon’s search return page or product detail pages indicate that Amazon does not carry the MTM watches. By contrast, the court observed, Amazon’s competitors Buy.com and Overstock.com clearly announce that no product search results match the “MTM Special Ops” query before listing competitors’ products.

The 9th Circuit examined the concept of initial interest confusion, which may occur during the shopping process (rather than the purchase process), when use of one party’s trademark causes consumer confusion that creates interest in a competitor’s product. Initial interest confusion is actionable trademark infringement because it impermissibly capitalizes on the goodwill associated with the trademark owner’s mark, even if a purchase is ultimately made without any confusion as to product source.

The 9th Circuit cited an expert report submitted by MTM, which stated that the search results on Amazon are “ambiguous, misleading, and confusing.” Based on this report, the court concluded that a reasonable jury could infer that shoppers would be confused as to why MTM watches are not listed in the search return, since Amazon does not inform consumers that it does not carry the MTM watches. The court also found that a reasonable jury could infer that the search results will cause shoppers to wonder whether a competitor has acquired MTM or if the competitor is otherwise affiliated with or endorsed by MTM.

The 9th Circuit then examined the eight-factor Sleekcraft test for likelihood of confusion, determining that five of the eight factors were relevant to its analysis and that three of the five relevant factors “appear to weigh in favor of finding a likelihood of confusion.” Specifically, the court determined that there was a genuine issue of material fact as to the strength of MTM’s trademark; a jury could find that the similarity of the goods weighs in favor of a finding a likelihood of confusion because both MTM and Amazon sell specialized, military-style watches, and; a jury could infer that Amazon had an intent to confuse consumers because it has done nothing to address vendor and customer complaints about Amazon’s non-responsive search results when searching for products that are not carried by Amazon.

The 9th Circuit concluded its opinion stating that it was “by no means certain that MTM will be able to prove likelihood of confusion under an initial interest confusion theory.” But, because the court found genuine issues of material fact to be resolved, it reversed and remanded.

In dissent, Judge Silverman analogized the Amazon search results to a diner in a restaurant who asks for a Coke beverage, but is told that the restaurant does not carry Coke, only Pepsi, which likely would not constitute trademark infringement. Because the Amazon search results clearly labeled the name and manufacturer of each competing watch that appeared in the “MTM” search results, along with a photograph of each product, Silverman argued that “no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products.”