Consider this: You are shopping online and you type in the name of a brand of wristwatch. Perhaps you wanted to purchase that exact brand of watch, or perhaps you were looking for a selection of watches that included the brand but also watches similar to it. You click onto a retailer and type in the brand, and you receive “results” for your search. In the list of results there appears other watch brands, but not the one that you requested. As you review the results page, nothing on it explicitly states that the retailer does not carry the brand you requested, but the results do not show that brand. You click in and out of some of the choices to see if you are correct in your understanding. As you click the other watches listed, you find one that you like and purchase it.
Is the action of the online website operator a trademark infringement? This was the question confronting the Ninth Circuit Court of Appeals in Multi Time Machine, Inc. v. Amazon.com., No. 13-55575 (9th Circuit July 6, 2015). Reversing the grant of summary judgment that dismissed the claim for infringement, two judges on the panel held that it was for a jury to determine whether it is a violation of the Lanham Act to give the results for other competitor watches sold in the store without also notifying the searcher that there was no such brand available in its store.
Initial Interest Confusion
The majority found that there could be “initial interest confusion” because a shopper could have obtained its initial interest in a competitor’s product through confusion engendered by the diversion. Under this analysis, liability may be found where initial customer interest arises from the actions of the alleged infringer, even if that initial interest and confusion is corrected by the time of purchase.
Initial interest confusion has been a controversial aspect of trademark law since the Second Circuit created the doctrine forty years ago, and it has received uneven support in the federal courts. Some circuits do not accept the doctrine at all, while those that acknowledge it apply the law in an uneven fashion. Supporters of the doctrine often defend it by arguing that the law must prevent bait-and-switch tactics that trade off the name and goodwill of the trademark holder to skim off sales. Other commentators have criticized the doctrine and have called for its demise, arguing that it does not have a foundation in trademark law principles and it is often used as a short cut to finding liability without rigorously analyzing whether there is a likelihood of confusion.
The Ninth Circuit majority goes farther than most in allowing an initial interest confusion claim to go to the jury. The danger of shortcutting the analysis was identified by the dissent in its critique, “It is hard to fathom how a reasonably prudent consumer accustomed to shopping online would view Amazon’s search results page and conclude that the products offered are MTM watches.” Indeed, it is difficult to find a confusion between the brands at all, and there is no evidence in the opinion showing that a consumer mistook one brand of watch for the other.
No Coke, Pepsi
If we accept that there is no confusion as between the brands per se, are Amazon’s actions in slow-playing the fact that it does not carry the watch nevertheless actionable? Amazon likely sees a commercial benefit in being coy about the fact that it does not carry the watch. Perhaps it wants to capitalize on the possibility that purchasers with weaker brand affinities will stay on the site and buy the watches that Amazon does carry. Amazon’s actions in this regard are like that annoying salesman who deflects the question of whether his store carries a particular watch with the response, “So you like those military style watches, do you? Come this way!” You then spend the next twenty minutes looking at watches for other brands in the store before you realize that he doesn’t carry the brand you requested. Slimy? Sure, you will never get back those twenty minutes of your life. But a trademark infringement? The deception was in your belief that the salesman would show you the watch brand about which you inquired; there was never any confusion as to which brand of watch you were shown.
The underlying concern in these cases is the degree of deception used to divert a sale to a competitor. This was the crux of the beef between the majority and dissent. The dissent quoted the famous Saturday Night Live sketch at the Olympia Diner. In the sketch, Jane Curtin asks for a Coke with her cheeseburger, and John Belushi replies, “No Coke, Pepsi.” In the view of the dissent, this exchange showed no confusion on Jane Curtin’s part because she knew that she would be served a Pepsi if she wanted it, just like the Amazon shopper. The majority disagreed, responding that Amazon never says, “No Coke.” It just shows photos of Pepsi, and that makes a difference in the analysis.
Whatever the boundary that the majority and dissent are delineating, it appears to be an expansion of the initial interest confusion doctrine. The consumer is not confused as to the designation of the watch brands. Under traditional trademark principles, infringement requires a showing of confusion as to the source of the goods. At most, the “confusion” here is over whether Amazon carries the brand, which is not a confusion over the designation of goods. And if this scenario is viewed as form of bait-and-switch false advertising, an interesting question is whether there is “bait” as such given that Amazon never explicitly claimed to have carried the MTM brand.
Whether this expansion of the initial interest confusion doctrine is warranted or unwarranted in light of traditional trademark principles, online retailers will need to be mindful of this case in reviewing the messaging that they use when they deliver search results to their shoppers.