Imagine a customer visits Amazon.com, hoping to purchase one of Multi Time Machine’s new MTM Special Ops watches. The customer runs a search for “MTM Special Ops,” and indeed, a multitude of watches appear on the screen. However, none of those watches are MTM Special Ops watches, and nothing on Amazon’s search results page alerts the customer to that fact. For that MTM sued Amazon, and recently, a three-judge Ninth Circuit Court panel held 2-1 that a jury could find such search results create a likelihood of confusion sufficient for a finding of trademark infringement. This type of confusion is known as initial interest confusion. That customer might at first glance believe that his search for “MTM Special Ops” led him to a page of watches associated with MTM. And then, even if the customer realizes that those watches aren’t what she searched for, the customer might stick around and look into buying a competitor’s watch instead.

Avoiding Initial Interest Confusion Requires A Clear Explanation

However, one circuit court judge disagreed, referencing in his dissent a famous Saturday Night Live sketch featuring John Belushi. In the sketch, Belushi plays a restaurant employee who tells the customer that he has “no Coke. Just Pepsi.” Surely, the judge argued, no one would dream of arguing that the restaurant has violated Coke’s trademark by volunteering to compensate for its lack of Coke with a competitor’s product.

The judge continued: “Because Amazon does not sell the MTM Special Ops watch, what the search produces is a list, with photographs, of several other brands of military style watches that Amazon does carry, specifically identified by their brand names — Luminox, Chase-Durer, TAWATEC, and Modus — sort of like what happens when you order a Coke, and are clearly told that they only have Pepsi.”

The majority responded to that argument by noting that at least Belushi had clearly stated the restaurant had no Coke before offering Pepsi. In contrast, MTM offered only “Pepsi” and never said “no MTM.”

Search Results With Disclaimers

The majority, therefore, seems to suggest that Amazon and other similarly situated retail sites must insulate themselves from lawsuits such as this one by providing a message at the top of the results, disclaiming whose products the results contain. And as such, helping to avoid initial interest confusion. Such a message might say, “We are sorry, but we do not carry MTM watches. Take a look at these other watch brands instead.”

Amazon might argue that for many companies, however, developing such a search algorithm would be difficult if not cost-prohibitive. The retail giant might further argue that holding it liable for search results would lead to a fairly radical result: a customer may voluntarily—without product-specific advertising—visit a retail website, put in a combination of terms into a search bar, and induce initial interest confusion upon themselves within the retail website. In response, MTM might argue that such a result would merely be incrementally progressive; courts have held many times that (1) if a consumer uses an external search engine and (2) if a website uses someone else’s trademark to sell other products within the search engine’s results, then a likelihood of confusion may exist. Now, a jury will have a chance to decide.

Sources: https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/07/06/no-coke-pepsi/ http://www.bloomberg.com/news/articles/2015-07-07/amazon-apple-swift-goldman-programmer-intellectual-property http://www.jdsupra.com/legalnews/watch-out-split-ninth-circuit-panel-46492/

For more information on this topic, please visit our Trademark Litigation service page, which is part of our IP & Business Litigation practice.

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