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