Trademark Infringement from Search Subject of Amazon Lawsuit

Several lawsuits have made headlines over the past few years regarding the use of trademarked phrases in search ads against those that sell the ads (see Rosetta Stone Ltd. v. Google, Inc. as an example) and against those that purchase the ads (see PDF of CollegeSource, Inc. v. Academy One, Inc., for example).

In cases where the defendant is a search engine — Google, Yahoo, Bing — the search engine company has won the majority of the time. For instance, in cases that involve using Google’s AdWords where a business purchases the keywords from a competitor’s trademark as search terms, most cases have found that there is no trademark infringement.

Minimal Damage, No Infringement

Even cases involving direct lawsuits against the company purchasing the trademarked search terms, when it is clear from the text that the competitor bought the advertisement and the advertisement does not have any of the competitor’s trademarked words in it, the cases have favored the business that purchased the trademarked search terms. For instance, in 1-800 Contacts Inc. v. Lens.com Inc. — here’s the PDF — the court found that the use of a trademark in AdWords did not infringe, in part because only a minimal amount of people clicked on the AdWords advertisements Lens.com purchased using keywords associated with the 1-800 Contacts trademarks.

Case Against Amazon Different?

However, one of the newest trademark infringement lawsuits against a major Internet player has brought a new twist to the Internet search trademark infringement claims. Multi Time Machine, Inc. (MTM) has brought a suit against Amazon.com based on the search results that appear when looking to purchase an MTM product through Amazon’s site.

The U.S. District Court where the case — Multi Time Machine, Inc. v. Amazon — was filed ruled that the case should be dismissed on a summary judgment request from Amazon, meaning that the case would not go to trial and was found in Amazon’s favor. MTM appealed to the 9th Circuit Court of Appeals, which reversed the lower court’s decision in a 2-1 decision — see PDF of decision — in July, stating that the case should go to trial as there are questions whether Amazon committed trademark infringement.

MTM creates and sells MTM Special Ops watches, high-end tactical watches that are only available on its site and through distributors. MTM has specifically decided not to sell through Amazon, including forbidding distributors from selling its watches on Amazon and any other online site without written permission.

At the time the suit was filed, if a consumer entered “MTM Special Ops” into the search bar on Amazon, a listing of watches similar to MTM watches would appear in the results. While the watches were clearly marked with the competitors’ names (i.e., a result would state that it was a Chase-Durer watch), the phrase “MTM Special Ops” appeared throughout the search listings.

The 9th Circuit Court of Appeals’ opinion even found that as of June 26, 2015, Amazon had a static web page which that stated “At Amazon.com, we not only have a large collection of mtm special ops watch products [which, of course, is flatly untrue], but also a comprehensive set of reviews from our customers. Below we’ve selected a subset of mtm special ops watch products and the corresponding reviews to help you do better research, and choose the product that best suits your needs.”

The text in [] above appears to have been added by the court. The web page referred to in the opinion has apparently been removed by Amazon as of the date of this article.

Confusing to Consumer?

Under the U.S. Lanham Act, in order to provide trademark infringement, a plaintiff must prove that the defendant infringed the trademark by using it in commerce in a manner likely to cause confusion to the average consumer as to the source of the goods being bought. While the lower court found that there was no confusion when a consumer searched for MTM Special Ops on Amazon’s website, the 9th Circuit found that a jury could decide otherwise, especially based on the information above.

…a plaintiff must prove that the defendant infringed the trademark by using it in commerce in a manner likely to cause confusion to the average consumer…

In addition, the 9th Circuit noted that Amazon did not clearly disclose that it did not sell MTM Special Ops watches. It was the Court’s opinion that this information should be presented to a jury to determine how important it was to the claims of trademark infringement.

The case is now in the hands of the lower court again. Based off of the 9th Circuit ruling, unless the case is resolved outside of court between the parties, an interesting decision (and additional appeals) will probably help decide the fate of the newest version of online trademark wars. If Amazon wins, online sales searches may continue as they have for years.

However, if Amazon loses, or even settles out of court, it may create an environment where clear disclosures become more of the norm. Unfortunately, it may take a few years for the decision, but online marketers should be eagerly awaiting it.