Amazon is one of many online retailers that uses an internal search engine that sorts through branded and trademarked goods. Of course, search engines such as Google, as well as purchasers of Adwords through Google, have been subject to significant scrutiny and litigation regarding the use of trademarks in their searches and the results delivered, generating an evolving body of law [InFashion Summer, 2012].

A recent federal court decision provides online retailers who have their own search functions with guidance on the operation of those systems vis-à-vis the delivery of results where trademarks are plugged into their more limited search functions. Multi Time Machine, Inc. v. Amazon.com, 2013 WL 638888 (C.D.Cal. Feb. 20, 2013). The result is another finding that consumers are increasingly difficult to confuse, and have a more sophisticated understanding of the methods of Internet commerce.

Amazon is perhaps the best-known online retailer, selling millions of products to consumers directly and through third-party sellers. The search function, in attempting to retrieve the products that a searching consumer may be interested in, delivers query results that do not necessarily match the actual words entered by the consumer, and typically include competing goods. So a search for one watch brand may bring up others.

Multi Time Machine, Inc., or “MTM,” is known for selling “special ops” watches. These watches are not available on Amazon.com, but when a consumer searched the site for “MTM special ops”, the Amazon search results delivered a collection of watches sold by MTM’s competitors, such as Luminox and Chase-Durer. The MTM watches would appear, however, in a sponsored advertisement on the same page.

In its trademark claims, MTM contended that Amazon was required to inform consumers that it is not a retailer of MTM products prior to presenting alternatives. The court articulated the question presented as “whether shoppers on Amazon are confused as to the source of the products displayed in the list of search results.”

The court granted Amazon summary judgment, finding that no reasonable trier of fact could find a likelihood of confusion resulting from this “use” of the MTM trademark in generating the search results. It reinforced the trends set by the decision in Network Automation, Inc. v. Advanced Systems Concepts, Inc., 638 F.3d 1137 (9th Cir. 2011), quoting its admonition that courts must be “acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.” Furthermore, keeping the doctrine of initial interest confusion narrow, the court reiterated that to show “initial interest confusion, the owner of the mark must demonstrate likely confusion, not mere diversion.” Id. at 1149.

However, in Amazon’s defense, it presented evidence “that there is no actual confusion,” including data concerning individual search inquiries and the number of purchases resulting from them in the same day. By comparing the number of consumers who purchased a watch after searching the “MTM” trademarks, and those who purchased a watch after searching a competitor’s trademark, “Luminox,” Amazon reported that consumers searching for Luminox were 21 times more likely to purchase a watch than a consumer searching for “MTM.” Presumably, if consumers were confused by the MTM search results, they would have purchased a competitor’s watch. As a result, Amazon concluded that consumers were not confused by the MTM search results. The court accepted this conclusion.

The court also rejected MTM’s evidence of actual confusion. MTM’s president claimed knowledge of such instances, but he was unable to present specific instances or records of it. The court likewise rejected an expert report that concluded Amazon’s search results were “ambiguous, misleading and confusing” because consumers will not understand why they are receiving the search results. However, there was no study to support those opinions. More importantly, the court determined that the report may show confusion as to how the search function operates, but not that consumers would be confused as to the source of the products.

The holding in Multi Time Machine reinforces the trend of cases crediting consumers with greater sophistication and familiarity with the operation of online retailing and search engine results. Perhaps as importantly, the case provides a guideline for determining whether or not there is quantifiable confusion based on consumer searches and resulting purchases. Creating this type of evidence will be possible for most online retailers through their own system reporting. Where a plaintiff lacks any specific and compelling evidence of actual confusion, if the data look like the MTM case, it may provide an early exit ramp from this type of trademark infringement claim.