On July 6, 2015, the United States Court of Appeals for the Ninth Circuit issued a 2-1 opinion allowing watch manufacturer Multi Time Machine (MTM) to continue pursuing its legal action against Amazon.com. The Court reversed the summary judgment order granted by the Central District Court of California and remanded for a new trial, concluding that the likelihood of confusion created by Amazon.com’s search results presented genuine issues of material fact. This case offers an interesting conflict of opinions on how trademark law applies in e-commerce scenarios.
MTM manufactures high-end, military-style watches, which are not sold on Amazon.com because MTM wants to maintain an image as a high-end exclusive brand. When consumers search for MTM watches, they see watches from other brands instead without being notified that Amazon does not sell MTM watches. Unlike Amazon.com, competitors Buy.com and Overstock.com clearly announce that no search results match the “MTM Special Ops” query before listing competitors’ products. The Central District Court of California granted summary judgment to Amazon, holding that an analysis of the eight factors set forth in the 1979 case of AMF Inc. v. Sleekcraft Boats established that there was no likelihood of confusion in Amazon.com’s use of MTM’s trademark in its search engine or display of search results.
Applying the same Sleekcraft factors, the Ninth Circuit reversed and held that under the doctrine of initial interest confusion – which applies “not where a customer is confused about the source of a product at the time of purchase, but earlier in the shopping process” – triable issues of fact existed.