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 Trademark Infringement Trial of Amazon Over Search Results

Trademark Infringement Trial of Amazon Over Search Results

July 10, 2015

Recently, the US Court of Appeals for the 9th Circuit reinstated a case filed by Multi Time Machine against Amazon over trade mark infringement and published its opinion last week.  This opinion reverses a lower court decision held in favour of Amazon and the case is now back to the district court in LA for further proceedings.

The Dispute

The case is about watchmakers Multi Time Machine (MTM) and their allegations against Amazon’s search tool. They claim that Amazon’s search results could be confusing to buyers who are looking to buy MTM’s products. While Amazon does not sell the watches manufactured by the company, the results to buyers who search for “MTM Special Ops” are a list of watches created by competitors and sold by Amazon. What is more, right above competitors’ products, consumers still see the search term “MTM Special Ops” in Amazon’s search bar. This, it is alleged, could mislead users into buying watches from a competitor.

MTM Watch

At the heart of the dispute lies the fact that the watchmakers own the trademark for the “Special Ops” watches and, therefore, claim that Amazon uses their trademarked term in their website to list Amazon’s products in search results instead of listing MTM’s watches. The problem for MTM, however, is that Amazon does not sell the watches manufactured by the company at all. The site will not say they are not selling MTM products either. Instead, Amazon display their own products when buyers search for MTM’s “high-end, military-style” watches. It is for this reason that consumers may be confused by the results from their search.

Court’s opinion

Initially, the Los Angeles district court held Amazon’s use of Multi Time Machine’s trademark created no likelihood of confusion. However, on appeal the court did not agree with Amazon’s defence that this use did not constitute “use in commerce”.

“This court has held that use of a trademark as a search engine keyword that triggers the display of a competitor’s advertisement is a ‘use in commerce’ under the Lanham Act,” the opinion states. “We hold that the customer-generated use of a trademark in the retail search context is a use in commerce.”

In a dissent, 9th Circuit Judge Barry Silverman said Amazon’s search results page clearly labels manufacturer for each watch and made an interesting comparison to a diner offering Pepsi and not Coca Cola:

“No reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products,” he added. Anyway, the ball is thrown back to the trial court.

What to expect?

This case could turn out to be very important in technology law, as Ars Technica suggests. Actually, many companies have already tried to challenge this practice of “keyword advertising” by suing competitors or search engines, although none has succeeded. This zero success rate is also the reason why this practice gradually stopped. Therefore, the potential win by MTM is exciting news for those who hope to be rewarded. In this sense, if this case leads to payment to the watchmakers, this could create a wave of trademark litigation focused on this issue.

By way of illustration, the most notable case in this context is that of Rosetta Stone and her trademark case against Google which, although was settled on confidential terms, went to an appeals court and raised the awareness of some of the issues involved.

And while we are waiting to see what’s next with MTM and Amazon, Lexology author Christopher Ernst suggests: If Amazon are your competitors, why don’t you check if they are doing this to you?