United States: Divided Ninth Circuit Panel, Reversing Itself, Holds That Amazon's Search Results Do Not Cause A Likelihood Of Initial Interest Confusion

In a closely watched case involving the design of the search results page on Amazon.com, a divided panel of the Ninth Circuit held that the page did not create a likelihood of initial interest confusion.

The court had originally reached the opposite conclusion back in July, in a decision written by Judge Carlos Bea over the dissent of Judge Barry Silverman. Following a motion for reconsideration, the third judge on the panel, Senior District Judge Gordon Quist (sitting by designation), without explanation, switched his vote, turning Judge Silverman's dissent into the majority opinion.

The case was brought by MTM, a company that manufactures military-style wristwatches under brands like "MTM Special Ops." MTM's watches are not sold on Amazon. If a consumer searches for the phrase "MTM Special Ops" in the Amazon search bar, she will be taken to a page where that phrase is repeated three times: (i) in the search field; (ii) in quotes immediately below the search field; and (iii) in the phrase "Related Searches: MTM special ops watch." The consumer would also be presented with a list of results that includes watches manufactured by other companies. Next to a picture of the watch, the name of its seller would appear twice (e.g., "Luminox Men's 8401 Black Ops Watch by Luminox").

MTM alleged that the search results created initial interest confusion. That is, MTM argued, a consumer may be initially confused into believing the watches in the search results were MTM watches, causing her to pay attention to a competitor's watch when she otherwise might not have. The Ninth Circuit and other courts have held that such confusion is actionable under the Lanham Act, even if the consumer is not confused at the point of sale—i.e., she discovers prior to purchase that the watch is not an MTM watch. Notably, MTM did not present survey evidence.

The district court granted summary judgment in favor of Amazon, holding that, as a matter of law, there was no likelihood of confusion. As noted above, a divided panel of the Ninth Circuit originally reversed and remanded. However, upon reconsideration, the panel affirmed the district court's judgment.

The majority found that the traditional likelihood-of-confusion factors set forth in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), were "not particularly apt" in the context of an Internet search page. In the court's view, "the Sleekcraft test was developed for a different problem—i.e., for analyzing whether two competing brands' marks are sufficiently similar to cause consumer confusion," as opposed to here, where "the confusion is not caused by the design of the competitor's mark, but by the design of the web page that is displaying the competing mark and offering the competing products for sale." The court, thus, looked to a new factor that it had fashioned in similar cases, namely, "the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page." The court determined that the case could be resolved by answering two questions: "(1) Who is the relevant reasonable consumer?; and (2) What would he reasonably believe based on what he saw on the screen?"

As to the first question, the court determined that because the goods at issue were expensive, the relevant consumer "is a reasonably prudent consumer accustomed to shopping online." Thus, it was unnecessary to determine whether "[u]nreasonable, imprudent and inexperienced" consumers were likely to be confused by Amazon's search results.

As to the second question, the majority concluded that a review of the search results page showed that confusion was "highly unlikely" because the products were clearly labeled "by brand name and model number accompanied by a photograph of the item." Therefore, it was "unreasonable to suppose that the reasonably prudent consumer accustomed to shopping online would be confused about the source of the goods." In light of this finding, any factual disputes between the parties were immaterial and summary judgment was appropriate.

In his dissent, Judge Bea criticized the majority for supplanting the role of the jury in deciding whether consumers are likely to be confused. The dissent also argued that the majority did not properly consider the possibility of initial interest confusion, focusing instead on the likelihood of confusion at the point of sale. Judge Bea, concluding that a rational jury could infer that users would be confused by the search results, would have remanded the case for trial.

Whichever view ultimately prevails could have a major impact on the design of search results pages on e-commerce websites.

The case is Multi Time Machine, Inc. v. Amazon.com, Inc., 792 F.3d 1070 (9th Cir. 2015).

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