Appeals Court Reverses Its Own Ruling: It's NOT Trademark Infringement For Amazon To Provide Useful Search Results

from the watch-this dept

Just a few months back we had written about an odd case occurring in California between Multi-Time Machines, which makes watches, and Amazon, which sells watches, but not MTM watches. This trademark case over search results on watches took an odd turn after the 9th Circuit Court of Appeals attempted to turn back the time-piece, applying a discarded doctrine called "initial interest confusion." This doctrine made it trademark infringement for retailers to point customers looking for product X to product Y instead, particularly by using certain product placement practices. The Ninth Circuit essentially dropped the doctrine in 2011, after a series of inconsistent rulings bred all kinds of confusion. In this particular case, Amazon customers entering "MTM watches" into the search field were presented with watches made by competitors, because Amazon doesn't carry MTM watches. In other words: "We don't carry that product, but we do carry these similar products that you might be interested in." The 9th Circuit initially ruled in favor of Amazon, but the appeals court reversed that ruling and set the trial to go before a jury using, again, the initial interest confusion doctrine.

But confusion is the key word here, apparently, because that same court agreed to a request by Amazon for a rehearing. At the rehearing, Amazon reiterated that it clearly identified the manufacturers and companies in its search results and that there was no actual customer confusion to be found. The court then reversed itself, ruling that the initial court's ruling in favor of Amazon had been proper.

Multi Time Machine, Inc., manufacturer of MTM Special Ops watches, alleged that Amazon’s website infringed its trademark because of the manner in which the website responded to a shopper’s search request for the watches. Affirming the district court’s summary judgment in favor of Amazon, the panel held that Amazon’s search results page did not create a likelihood of confusion by displaying a list of several other brands of military style watches. The panel concluded that because the page clearly labeled the name and manufacturer of each product offered for sale and even included photographs of the items, no reasonably prudent shopper accustomed to shopping online would likely be confused as to the source of the products.

There are a couple of items of note here. In its ruling, the court does not come out and directly strike down the idea of initial interest confusion. In fact, despite an amicus brief offered by Public Citizen and the EFF, the ruling generally only refers to initial interest confusion when describing the basis for MTM's complaint. In other words, it essentially punted on the question. It's also worth noting that there could still be a request that the case be reheard "en banc", so the court may hit the reset button on the case entirely.

But the real fun is how the court reversed itself. Paul Alan Levy has a nice write up of the details, but essentially one of the judges simply switched teams.

The panel has now reversed itself in an opinion by Circuit Judge Barry Silverman, the author of the original dissenting opinion, and affirmed the lower court’s grant of summary judgment. In dissent, Circuit Judge Carlos Bea (the author of the now-discarded majority opinion) angrily charges that the majority “sub silentio overrules this court’s ‘initial interest confusion’ doctrine.”

The third judge, Gordon Quist, had originally sided with Bea, but upon review appears to have decided that he did so in error and now joins the new majority in favor of Amazon. Courtroom drama, does it get any better?

In the end, it seems plainly silly to handcuff an online retailer from returning useful search results to not-confused customers in favor of a trademark doctrine that appears to have been deemed useless four years previous. It's a shame the court didn't decide to take that question head on, but this is certainly better than the court's original ruling.

Filed Under: 9th circuit, ads, initial interest confusion, recommendations, trademark, watches
Companies: amazon, mtm

9th Circuit: Amazon's Search Results Too Useful, Must Be Trademark Infringement

from the watch-this dept

Let's say you were in the market for some luxury item. Hell, let's say you wanted a nice watch. Being a watch kind-of-guy, you've done enough research to know you would like an MTM Special Ops branded watch, so you walk into a jewelry store and tell them what you want. When you ask the store clerk for an MTM watch, he or she instead points you towards lots of other watches for sale. As you look around the store, you notice none of the display cases actually contain any MTM brand watches. Have you suddenly become confused as to whether the alternative watches are in fact MTM watches?

The 9th Circuit Court thinks you might have, given its ruling in a trademark case between MTM and Amazon. The case is essentially over the scenario described above, except on Amazon's online marketplace. Users that put "MTM Special Ops" into Amazon's search field were provided with a list of competing watches in the results, because Amazon doesn't carry MTM watches. Those search results were clearly labeled with the competitor brand's names. One district court had already ruled in favor of Amazon, as MTM argued that those search results constituted trademark infringement. The 9th Circuit Court of Appeals reversed that ruling and sent the case to a jury. And this whole thing is prefaced on what's called initial interest confusion, as detailed in the link above by Eric Goldman.

The majority opinion focuses on a much-criticized trademark doctrine called initial interest confusion. The Ninth Circuit has had a dozen or so cases addressing initial interest confusion, and its handling of the doctrine has vacillated wildly. In 1999, the Ninth Circuit adopted an exceptionally (and, in my opinion, unreasonably) overbroad definition of the concept. This led to a series of tortured and inconsistent rulings until 2011, when the Ninth Circuit adopted a more constrained definition that virtually killed the doctrine.

In this case, the Ninth Circuit bypasses its 2011 definition and instead defines initial interest confusion from a 2004 ruling:

"Initial interest confusion occurs not where a customer is confused about the source of a product at the time of purchase, but earlier in the shopping process, if “customer confusion . . . creates initial interest in a competitor’s product.”"

As Goldman notes, there was a very good reason the court essentially killed off this whole doctrine in 2011. Based on that definition used above, all kinds of accepted retail practices would suddenly be found to be infringing, including the way product placement of house and alternative brands occurs in brick and mortar stores. The theory behind initial interest confusion is essentially that if a consumer was looking for brand x and only found brand y through retailing practices like product placement and/or search results, there can still be trademark infringement even if brand y is clearly labeled and the customer is clear on what they're buying prior to making the purchase. In the area of search results for online retailers, it's a really dumb doctrine, because it essentially penalizes search results for being too useful to everyone who isn't seeking one brand/product only to the exclusion of every other product on the planet. The dissenting judge in the case outlines nicely how silly the majority's ruling is.

Because Amazon’s search results page clearly labels the name and manufacturer of each product offered for sale and even includes photographs of the items, no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products….The search results page makes clear to anyone who can read English that Amazon only carries the brands of watches that are clearly and explicitly listed on the web page. The search results page is unambiguous.

The difference between other online retailers and Amazon is that other retailers denote at the top of search results that they do not carry the MTM brand, where Amazon simply lists all the other brand watches it carries. In other words, Amazon assumes that the public is intelligent enough to read the brands on the search results and conclude that Amazon doesn't carry MTM watches. So, while the case is now headed to a jury, the fix for Amazon is technically easy, but silly to have to implement. More troubling, as Goldman notes, is both the fact that the court appears to view online retailers as having more culpability under the initial interest doctrine and the larger danger of initial interest being brought back to life by this ruling.

Initial interest confusion revitalized. I don’t believe any trademark owner has won on initial interest confusion grounds since 2011, and many trademark experts considered the doctrine dead. This opinion potentially resurrects the doctrine like a zombie. That’s an unfortunate development. The initial interest confusion doctrine is solely based on judicial intuition; no empirical research validates its existence. It’s also an overly plastic doctrine; its boundaries and definition often change from case to case. This makes it’s impossible for a defendant to rebut and hard for litigants to predict outcomes. Having a revitalized doctrine will increase defendants’ litigation costs with no commensurate social benefit.

In other words, this ruling would seem to force online retailers to treat the consuming public as though they were far more stupid than they actually are, which is a strange outcome for a court case. Punishing useful retailer search engines for being too useful and not treating the public like morons is hopefully a practice that won't make it through the jury process.

Filed Under: 9th circuit, initial interest confusion, merchandizing, search results, trademark
Companies: amazon, mtm