court, while uncomfy with some Amazon techniques, declines to grant PI

Comphy Co. v. Amazon.com, Inc., NO. C18-1460RSM (W.D. Wash.
Mar. 12, 2019)
The Comphy Company markets itself as a luxury company,
historically supplying its linens to luxury spas. Ultimately, Plaintiff decided
to start retailing its products online through its own website, though it
doesn’t market directly to customers and instead relies upon word of mouth and
first-hand exposure at hotels, spas, and bed and breakfasts utilizing its
products.
Amazon solicited Comphy several times to sell its products
on Amazon’s platforms, but Comphy declined based on its luxury strategy.
Nonetheless, Amazon bought keyword advertising utilizing keywords including
COMPHY from several search engines, resulting in ads for, e.g., “Comfy Sheets
Queen”; “Shop Comfy Sheets” “Comphy Co Sheets”; and “Comphy Company Sheets at
Amazon.” Likewise, if consumers use Amazon’s own-site search and start typing “comph,”
Amazon’s search bar provides possible searches including for “comphy sheets,”
“comphy company sheets,” and “comphysheets” along with seven other unrelated
possible searches. Because Comphy’s products are not available through Amazon,
a search for “comphy sheets” provides products similar to Plaintiff’s products,
including bedding offered for sale by “Comfy.” On one product advertised in
response to a search for “comphy sheets,” Amazon prominently displayed
“Amazon’s Choice for ‘comphy sheets,’” though Amazon represented that it had
stopped doing that specifically (but didn’t agree to an injunction requiring
that cessation).
Comphy projected a significant increase in its online sales
in 2018 but hadn’t met that growth rate. It requested an injunction against
Amazon’s allowing third parties’ unauthorized use of COMPHY or highly similar
terms such as COMFY to promote bedding, sheets, pillows and related products;
selling merchandise under the COMPHY COMPANY, COMPHY SHEETS or COMFY SHEETS
storefront in connection with those products; using “Comphy Company Sheets”, “Comphy”
(either alone or with other words), or “Comfy” applied to allegedly infringing
products (either alone or with other words) to display “infringing and
unlabeled third-party sheets”; autosuggesting searches for “Comphy”, “Comphy
Sheets”, “Comphy Company” and “Comfy Sheets” when users begin to type the first
few letters; using “Comphy” on product search result pages in phrases like
“Amazon’s Choice for Comphy Sheets”; and using COMPHY or COMFY SHEETS as
keywords with online advertising networks. The breadth of Comphy’s claims and
its failure to segregate particularly disturbing uses from the other behavior
it challenged doomed its request for injunctive relief.
Comphy’s failure to disaggregate Amazon’s uses made it
unlikely to succeed on the merits overall.
First, it wasn’t clear whether or to what extent Comphy had
a valid mark in “Comphy” alone. Its registrations were for stylized versions of
its name. The presumptive validity of the registration was rebutted for these
purposes because, first, the registration was for goods other than those at
issue here, specifically: “Linens and bedding for health spas, namely, towels,
pads in the nature of bed pads, mattress pads and table pads, sheets, duvets,
comforters, pillow cases, pillow shams, and table skirts.” That didn’t cover the
consumer bedding at issue here; Amazon wasn’t alleged to infringe on the spa
market. Second, the registration didn’t cover the “bare” word mark, which
matters because “comphy” is a mere misspelling of the descriptive-for-linens
term “comfy.” Comphy itself testified that it consistently used the
design/logo.

The registered marks

Comphy didn’t succeed in establishing rights in “comphy” as
a text mark. Plaintiff may not “remove a common descriptive word from the
public domain by investing his goods with an additional quality, thus gaining
the exclusive right to call his wine ‘rose,’ his whisky ‘blended,’ or his bread
‘white.’” “Similarly, Plaintiff does not have the exclusive right to call its
goods ‘comfy.’” Comphy didn’t establish commercial strength; it argued that it
was the “brand standard” for luxury hotels, spas, and bed and breakfasts and
that it has “expended extensive sums annually since 2003 on advertising to
promote its Comphy brand and branded products, via trade shows and other advertising
and marketing in industry publications targeting bed and breakfasts.” But that
all involved use of the stylized “C” mark, “which lends distinctiveness to the
mark.” Nor did strength in the luxury spa market indicate strength in the
consumer retail market, especially since Comphy doesn’t market to consumers but
relies on personal exposure and word of mouth.
Nor was Amazon’s use clearly confusingly similar. Whether
the use was confusingly similar depended, in part, on the strength of the mark.
Network Automation thought that having
an inherently distinctive mark could lead to an inference that a consumer who
uses the mark is searching only for that particular source (an assumption that
is itself often unwarranted), but that reasoning didn’t apply here. Amazon
argued that COMPHY is a common misspelling of “comfy”: within Amazon reviews,
COMPHY is used in reference to bedding only 9% of the time and used in
reference to Comphy’s goods only slightly more than 1% of the time. The court
agreed that use of “comphy” as a search term didn’t necessarily indicate an
intent to search for Comphy’s products, even when it was used in reference to
bedding. Amazon’s survey also determined that 13% of consumers regarded COMPHY
as referring to a particular source for bedding, but that more than 12% of
those consumers also regarded “comfort”—a non-existent control—as also
referring to a particular source for bedding. [Clever control, since there are
“comfort + other word” marks out there.]
Proximity of goods and similarity of marks did weigh in
Comphy’s favor. In a footnote, the court indicated that its analysis might
differ “profoundly” if Comphy had focused only on Amazon’s search engine ads for
“Comphy Co Sheets” at Amazon, which makes sense to me, or on Amazon’s use of
the search term “comphy sheets” within its own website to offer consumers
“comfy” brand sheets or other sheets marketed as comfy or comfortable, which as
stated doesn’t—if the sheets are plausibly comfy, then descriptive use should
be just fine. (Though admittedly that isn’t easy to show in the Ninth Circuit,
given its defiance of the Supreme Court’s view in KP Permanent.) Anyway, Comphy “elected to lump the contexts and
uses together, and the Court declines the invitation to scour the limited
record to craft a legally defensible injunction.” In particular, only uses of
“comphy” by an Amazon customer who perceived that word as a mark but who
confusedly bought “comfy” sheets instead would involve confusion; other
scenarios involved no confusion at all, or at most diversion. “And, the Court
can only determine whether a customer knows of Plaintiff’s sheets based upon
the strength of the mark.”
There was evidence of actual confusion, including Amazon
reviews referring to Comphy and a declaration from an Amazon consumer who
intended to purchase Comphy sheets, bought “Comfy Sheets” on Amazon, realized
his mistake when the sheets arrived, and returned the Comfy Sheets. The court
found the evidence of actual confusion “often compelling,” but this was only a
small percentage, and Amazon pointed out that people who pick descriptive terms
invite a certain amount of confusion. “The Court agrees that some actual
confusion may exist even if a reasonably prudent consumer would not be
confused.”
Marketing channels: favored Comphy. Degree of care: Comphy’s
self-positioning as a luxury company meant its consumers weren’t “wholly
unsophisticated”; neutral.
Amazon’s intent: Amazon’s prior solicitation of Comphy’s business
didn’t indicate a bad intent; there was no evidence that the prior business inquiries
were related to Amazon’s current actions. Intent was “essentially neutral.”
Balancing the factors, there wasn’t a likelihood of success
on the merits.
Separately, Comphy didn’t show irreparable harm. Sales
growth short of Comphy’s ambitions wasn’t irreparable harm, nor did Comphy
adequately tie its lower-than-desired rate of increase to Amazon’s actions. Nor
would money damages be inadequate to remedy this “mainly financial” harm.
Lost control over reputation: “misuse of a trademark no
longer results in a presumption of irreparable harm.” Comphy showed evidence of
consumer confusion and dissatisfaction, but dissatisfaction with Amazon’s
offerings in the absence of confusion wasn’t relevant. Only if dissatisfaction
were attributed to Comphy would there be harm to its brand, and there wasn’t
evidence of that. Nor did Comphy explain why final remedies wouldn’t be
adequate. “Indeed, this case appears quite distinct from prior cases where
interaction with confused consumers cannot be remedied because those consumers
are unknown to the parties. Here, there seems to be a much higher chance that,
if liable, Defendant could contact almost every purchaser of the allegedly
inferior products and seek to repair any damage that may have been done to
Plaintiff’s brand.”
In conclusion, the court suggested that Amazon was very
close to (and perhaps even over) the legal line in some of its acts (“Comphy
Co.” in keyword-triggered ad text!), but still declined to grant relief on this
record.

from Blogger https://ift.tt/2ugp0IU

This entry was posted in Uncategorized and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s