Though unusual, a line of controversial cases have held that trademark claims can be based on “initial interest confusion,” in which the use of brand names to interest customers in competing products gives rise to a claim by the company whose trademark is allegedly misused.
Last month, Amazon.com failed to get out of such a case in its early stages, in a ruling by the Ninth Circuit Court of Appeals that may send the case to trial. In short, Multi Time Machine Inc. makes high-end watches that are sold through distribution channels that do not include Amazon. An Amazon consumer searching for watches using the MTM trademark saw the search terms (MTM’s brand) three times above the search results, which were thumbnail photos and a list of watches manufactured by MTM’s competitors, as well as items that were not watches.
In a split opinion, a majority of the three-judge panel held that a jury might find Amazon had created a likelihood of confusion under an “initial interest confusion” theory because it showed MTM’s trademark three times above a search result displaying similar watches manufactured by MTM’s competitors. A jury might find that Amazon had led customers to purchase the products of others when they were actually looking for goods of MTM. The dissenting member of the three-judge panel thought that Amazon’s search result clearly identified each product sold, such that no reasonably prudent shopper accustomed to shopping online would likely be confused as to the source of the products.
The initial interest confusion doctrine has been maligned, and is rarely successfully invoked. Why was it resurrected here?
MTM may now have a chance to prove that consumers were likely to be confused by Amazon’s practice and that MTM was somehow damaged by this mode of operation. Many other merchants will undoubtedly be watching the case to see if they can make their own claims.
Click here for the full article.