July 15, 2015

Search and Confuse: Potential Trademark Liability for On-line Retailers

Seller Beware: Consumer Protection Insights for Industry

Search engines have become essential tools for consumers as they look for products and make purchases online. On July 6, 2015, the US Court of Appeals for the Ninth Circuit reversed a grant of summary judgment in a trademark lawsuit brought against, potentially signaling greater rights for trademark owners in the search context. Multi Time Machine, Inc. v., Inc. et. al..

Multi Time Machine, Inc. (MTM) manufactured upscale military-style wristwatches and owned a registered trademark for MTM SPECIAL OPS. MTM sued online retailer Amazon based on the way in which Amazon displayed search results when a consumer looked for the MTM SPECIAL OPS mark on the Amazon website. Because Amazon did not sell MTM's watches, its "Behavior Based Search" algorithm (BBS) instead populated the page with similar products, including military-style watches manufactured by MTM competitors like Luminox and Invicta. On this results page, Amazon displayed the MTM SPECIAL OPS mark three times: (1) in the search bar; (2) in a description stating "9 results for 'mtm special ops';" and (3) in a "related searches" list.

In reversing a grant of summary judgment in favor Amazon, the Ninth Circuit focused in particular on how Amazon displayed its search results. The court held that, under its precedents in Network Automation, Inc. v. Advanced Sys. Concepts, Inc. and Playboy Enterprises, Inc. v. Netscape Commc'ns Corp., an additional factor should be added to the traditional test articulated in AMF Inc. v. Sleekcraft Boats: "labeling". In Multi Time Machine, the Ninth Circuit found that this factor weighed in favor of a finding of "initial interest confusion," i.e., confusion that occurs "not where a customer is confused about the source of a product at the time of purchase, but earlier in the shopping process." This was because: (1) unlike other Internet retailers, Amazon did not explain in its search results that it did not stock MTM products; and (2) the search results page repeatedly displayed MTM's mark. Thus, the Ninth Circuit reversed and remanded the grant of summary judgment in Amazon's favor.

Multi Time Machine may expand the scope of search-related activity that could create trademark liability. Unlike trademark suits arising from keyword advertising, which have largely ceased, this case involved the result of Amazon's proprietary BBS algorithm. And, unlike keyword cases, in which a rival company purchases advertisements tied to the plaintiff's marks, the only use of MTM's mark was by the consumer searching for MTM's product. In other words, Multi Time Machine denied summary judgment for Amazon concerning what might be considered, in the search engine context, native results-- not search results sponsored by an advertiser. Many on-line retailers use search engines to guide consumers to the products they sell; Multi Time Machine raises the specter of trademark liability for such retailers where their results do not clearly indicate to the consumer whether the retailer is selling the trademarked item the consumer has searched for, or only comparable products. Only time will tell whether this potential increased scope of liability - at least in the Ninth Circuit - leads to more challenges in this context.

For a more in-depth perspective on this case, see our advisory.

© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.


Michael E. Kientzle
Michael E. Kientzle
Senior Associate
Washington, DC
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