Back to the Future: 9th Cir. reverses itself in Multi Time Machine

Multi Time Machine, Inc. v. Amazon.com, Inc., No. 13-55575
(9th Cir. Oct. 21, 2015)
 
Reversing itself (with amicus advocacy from, among others, yours
truly
), the panel now by 2-1 holds that Amazon should have gotten summary
judgment for its practice of responding to searches for “MTM Special Ops” with
other, clearly labeled watches, without explicitly stating that none of its
results are for that exact product. 
Because of the clear labeling of the results, “no reasonably prudent
consumer accustomed to shopping online would likely be confused as to the
source of the products”:
 
To whatever extent the Sleekcraft factors apply in a case such
as this – a merchant responding to a request for a particular brand it does not
sell by offering other brands clearly identified as such – the undisputed
evidence shows that confusion on the part of the inquiring buyer is not at all
likely. Not only are the other brands clearly labeled and accompanied by
photographs, there is no evidence of actual confusion by anyone.
 
Sleekcraft isn’t a
rote checklist, and different factors may be important in different
circumstances.  In search engine cases,
an additional factor is particularly important, per Network Automation: “the labeling and appearance of the
advertisements and the surrounding context on the screen displaying the results
page.” By contrast, the multifactor test “is not particularly apt,” because it
was developed for a different problem, “i.e., for analyzing whether two
competing brands’ marks are sufficiently similar to cause consumer confusion.”  [Comment: I’ve rarely seen a better admission
that IIC is a bad idea.  That “different”
problem is called “whether there is trademark infringement.”]
 
But, the majority notes in a footnote, a panel can’t get rid
of IIC.  So, let’s go to the argument
that’s not about real infringement: MTM’s argument isn’t that Luminox and other
competitors’ brands have confusingly similar marks, but rather that Amazon’s
search page creates IIC, because the search results page displays the search
term used – here, “mtm special ops” – followed by a display of numerous watches
manufactured by competitors, without explicitly informing the customer that Amazon
does not carry MTM watches.  The alleged
confusion isn’t caused by competitors, but rather by the web page’s
design. 
 
Still, setting aside the multifactor confusion test,
ultimately the question is whether a reasonably prudent consumer is likely to
be confused.  Here, evaluating the web
page plus the relevant consumer was enough to answer that question as a matter
of law.  Because “the default degree of
consumer care is becoming more heightened as the novelty of the Internet
evaporates and online commerce becomes commonplace,” and because the watches at
issue sell for several hundred dollars, reasonable consumers would be careful.
 
As for the webpage, even MTM agreed that clear labeling
could entitle a defendant to summary judgment. 
Here, the products themselves
were clearly labeled to avoid any likelihood of IIC on the part of a reasonably
prudent consumer.  There were even
photos!
 

MTM argued that the use of the search term “mtm special ops”
three times at the top of the search page might lead consumers to think that
the products displayed were types of MTM watches.  But that’s silly.  I mean, “highly unlikely.”  None of the watches use “MTM” or “Special
Ops,” and some of the products listed aren’t even watches, like Jerry Ahem’s
book Survive!: The Disaster, Crisis and
Emergency Handbook
.  “No reasonably
prudent consumer, accustomed to shopping online or not, would assume that a
book entitled ‘The Moses Expedition’ is a type of MTM watch or is in any way
affiliated with MTM watches.”  The same
was true of the other results.  The
standard, after all, is likelihood of confusion, not possibility.
 
MTM argued that Amazon needed to explain to consumers that
it doesn’t sell MTM watches before offering alternatives.  But anyone who can read English could tell
that Amazon sold only the listed products. 
The results were “unambiguous – not unlike when someone walks into a
diner, asks for a Coke, and is told ‘No Coke. 
Pepsi.’”
 
MTM argued that factual disputes precluded summary judgment,
but none were material.  “The likelihood
of confusion is often a question of fact, but not always.”  The Ninth Circuit has reached similar results
in false advertising cases where no reasonable consumer could have been
fooled.  Anyway, consideration of the
remaining Sleekcraft factors wouldn’t
change anything. There was no evidence of actual confusion.  As for intent, the design of the webpage “indisputably
produces results that are clearly labeled as to the type of product and brand,”
so that too didn’t favor MTM. As for strength, “[e]ven assuming MTM’s mark is
one of the strongest in the world – on the same level as Apple, Coke, Disney,
or McDonald’s – there is still no likelihood of confusion because Amazon
clearly labels the source of the products it offers for sale.”  Furthermore, Network Automation already said that the other factors were
unimportant in an internet search case involving clear labeling and a high
degree of consumer care.
 
Judge Bea, dissenting, would have sent the case to a jury on
the hypothesized IIC about affiliation between MTM and Luminox et al.  (Would consumers think that MTM had formed
relationships with all the brands
listed?)  The dissent pointed out that
other internet sites that didn’t sell MTM watches would give a “no results”
result to the “mtm special ops” search, and seemed to think that was all Amazon
should be doing too.  Maybe MTM wasn’t
right that consumers might think it sold watch parts to Luminox as a result of
Amazon’s search functions, but a jury should decide that. 
 
The majority, the dissent accused, implicitly added “at
point of sale” to the “likely confusion” made actionable by the Lanham Act, and
ignored “the possibility that a reasonably prudent consumer might initially
assume that those brands enjoyed some affiliation with MTM which, in turn,
could cause such a shopper to investigate brands which otherwise would not have
been of interest to her.”  [Note the
continued use of “possibility”—yet to avoid summary judgment MTM needed to
offer evidence that a factfinder could use to conclude that this was likely,
even if you buy the doctrine of initial interest affiliation confusion.] [Also,
how would “no results for MTM special ops found, but try these watches instead”
dispel the possibility of a suspicion that MTM had sold parts to or had some
other affiliation with the brands listed? 
As our amicus pointed out, “no results for MTM special ops, but what
about MTM Black Cobra?” would be a perfectly sensible sentence.  The “no results” doesn’t address the
postulated type of confusion.  I suppose
Amazon could program in “no results for MTM special ops, but try these other
completely unrelated, competing products with no affiliation with or
parts-selling relationship to MTM,” but that seems even sillier.]
 
Network Automation
was distinguishable because (1) it reversed a grant of a preliminary
injunction, and (2) “the ‘diversionary’ goods were clearly labeled on the
response page as ‘Sponsored Links,’ showing that the producers of those
products were the ones advertising for themselves, not for the firm named in
the search request.”  This second reason
is pretty bold, since the empirical
evidence
is that consumers don’t know very much about the division between
paid and organic results despite labels of that type, and also since firms
often bid on their own trademarks anyway. 
 
“On this record, a jury could infer that users who are
confused by the search results are confused as to why MTM products are not
listed.”  [Again: not trademark
confusion!]  And those confused users
might “wonder” whether a competitor acquired MTM or was otherwise affiliated
with or approved by it.  [Also, this
would be true even if MTM watches appeared in the results.]  The risk of affiliation was especially great
for a luxury brand, since “many luxury brands with distinct marks are produced
by manufacturers of lower-priced, better- known brands—just as Honda
manufactures Acura automobiles …, and Timex manufactures watches for luxury
fashion houses Versace and Salvatore Ferragamo.” As for the Coke/Pepsi
comparison, “[n]o shopper would think that Pepsi was simply a higher end
version of Coke, or that Pepsi had acquired Coke’s secret recipe and started
selling it under the Pepsi mark. [Why wouldn’t a jury have to decide that under
the dissent’s theory?  Also, what makes
the second possibility even relevant to trademark
infringement?] 
 
Anyway, the real issue isn’t source confusion, it’s whether Amazon’s tactics caused
IIC “by attracting potential customers’ attention to buy the infringing goods
because of the trademark holder’s hard-won 
reputation.”  [Hey, wait, what
infringing goods?  At what point did
Luminox watches start to infringe MTM’s rights?]  A jury could find IIC, not just mere
diversion.
 
And here the dissent demonstrates one of the ways in which
the multifactor confusion test has become more harmful than helpful: it
contends that the majority erred in considering mark strength unimportant,
because “[a] mark’s strength is a measure of how uniquely identified it is with
a product or service, and therefore how deserving of trademark
protection.”  But one quite persuasive
point of Network Automation, not to
mention New Kids and Rogers v. Grimaldi and parody cases like
Chewy Vuiton, is that sometimes mark
strength doesn’t increase the likelihood of confusion, because of the way that a strong mark is being
used.  If we’re at all interested in
being accurate about likely confusion, even if we’re committed to using
circumstantial tests, then I don’t see why we should use a blanket rule that
the stronger a mark is, the more likely confusion is no matter what the other
facts are.
 
The dissent also was willing to treat Amazon’s intent as
intent to confuse, because “MTM submitted evidence that Amazon vendors and
customers had complained to Amazon because they did not understand why they
received certain non-responsive search results when they searched for products
that are not carried by Amazon.”  Amazon
didn’t address the complaints by explaining how its search function worked (it
also accounted for related searches and other aspects of consumer
behavior).  Amazon did nothing to
alleviate confusion, which provided “some evidence of an intent to
confuse.”  [Again, it would be nice if
everyone could remember that “confusion” is not “confusion in the air” but trademark confusion.  Intriguingly, the dissent doesn’t notice that
these very complaints tend to disprove its initial interest affiliation
confusion theory: customers understood that they were getting unrelated search
results, rather than thinking that some hidden marketplace consolidation had
taken place.]

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2 Responses to Back to the Future: 9th Cir. reverses itself in Multi Time Machine

  1. Pingback: The Law On Initial Interest Confusion: Interestingly Confusing | LIKELIHOOD OF CONFUSION®

  2. Pingback: Multi Time Machine V. Amazon: SCOTUS Not Interested, Initially Or Otherwise | LIKELIHOOD OF CONFUSION®

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