Online Retailers Beware: Amazon Search Results Might Violate Watchmaker’s Trademark

Untitled2 By Brennen Johnson

Last week, the Ninth Circuit Court of Appeals handed down its decision in Multi Time Machine, Inc. v. Amazon.com, Inc.. Although the case doesn’t deal with time travel like the name might suggest (so disappointing!), the Court’s decision on whether the behemoth online retailer’s search results could have violated the watch manufacturer’s trademark certainly is interesting. In a two to one decision, the panel of three judges decided that Amazon might have violated Multi Time Machine’s (“MTM”) trademark by displaying competitors’ watches when online customers searched for a particular MTM model.

So how is this interesting? Let’s paint this case in the terms used by Judge Silverman in his dissent against the other two judges—If a patron walks into a restaurant and orders a “coke” and the waiter responds, “We carry Pepsi,” has the restaurant infringed on Coca Cola’s trademark? The majority’s decision suggests that the restaurant might have infringed, but that it is a question for a jury. Similar to the restaurant’s actions, Amazon, who is unable to carry MTM watches, displays the similar products of MTM’s competitors when the customer searched for MTM watches.

It seems absurd that Amazon could be liable for simply responding to requests for an unavailable product by suggesting other similar products. However, things get a bit more murky when you consider the root question that results in liability for this type of trademark infringement: could a reasonable person be initially confused by the search results and believe that the watches displayed on Amazon’s page were somehow affiliated with MTM? If so, then customers might consider buying the competitors’ watches based on the reputation of MTM’s trademark, and both Amazon and the competitor would unfairly profit from MTM’s hard work in building a well-respected business.

So, how might Amazon’s search results confuse a customer? Well, in this author’s opinion, only by being a pretty thick dunce. The law requires that the results be confusing to a “reasonably prudent consumer,” and in my book, the poor dunce who gets confused by these search results doesn’t quite make the cut. Like the district court that first considered the case and Judge Silverman (who dissented from the majority’s opinion), I believe that the results are so clearly labelled that no reasonable mind would think that they were somehow affiliated with or originated from MTM. But you don’t have to take my word for it. You can check out the image in the thumbnail above or click here to see for yourself.

The majority opinion reaches a different opinion by determining that the text “MTM special ops” which remains displayed in the search box at the top is sufficient to confuse customers about who manufactured the products. The majority explained in its opinion that, although the displayed results were each clearly labeled as the product of a different company, the clarity of the page’s layout as a whole created a legitimate question of whether or not it might confuse a customer about the origins/maker of the displayed products.

As an additional note that online retailers should consider taking to heart, the majority said when reaching its conclusion, “A jury could infer that the labeling of the search results, and Amazon’s failure to notify customers that it does not have results that match MTM’s mark, give rise to initial interest confusion.” If an online retailer wants to avoid this whole debacle, the cleanest method would be to spell it out when none of the products it provides meet the exact product description typed into the search bar.

Telecoms’ Latest Attempt to Kill Net Neutrality

unnamed By Brennen Johnson

Last month, the Federal Communications Commission published its new net neutrality rules in the Federal Register. In response to the new rules, there has been an onslaught of legal challenges brought by telecom companies to defeat the rules before they go into effect mid-June. Within several days of publication, seven companies filed suit against the FCC over the rules. Rather than attacking the substance of the rules outright, the companies are instead seeking to block procedural aspects of the rules. The companies challenge both the FCC’s reclassification of the internet as a “public utility” as well as the legal standards and mechanisms that would allow the FCC to enforce the new rules.

By classifying broadband internet as a public utility, the FCC gains broader regulatory powers over internet providers under Title II of the Communications Act of 1934. The reclassification addresses the FCC’s January 2014 failed attempt to enforce net neutrality. The FCC’s rules at that time were struck down in large part because broadband internet was not classified as a public utility, implying that the FCC could not regulate internet providers in the same broad manner as other utility providers. Speaking for the Court in that case, D.C. Circuit U.S. Court of Appeals Judge David Tatel wrote: “[g]iven that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such.” These broader powers significantly fortify the FCC’s position to protect its net neutrality rules from legal attack. However, if telecoms can successfully challenge the FCC’s reclassification of the internet as a public utility, then it seems a near certainty that the FCC’s current attempt at ensuring net neutrality will fail for the same reason it did in 2014.  Continue reading

Faking it by Omission? The FTC Targets Undisclosed Compensation for Online Reviews

Illustration for fake website testimonials By Julie Liu

When we sift through reviews for products and services, one of our top considerations is whether the words genuinely come from the customer’s experience and not a company’s imagination. There is no way, however, to determine a reviewer’s honesty beyond relying upon whatever disclaimers he or she provides. We have previously discussed the state of the law on fake business reviews. But what about “real” reviews incentivized by the reward of a good deal? If there was any question on the matter, the Federal Trade Commission (FTC) has now provided a real-life example of how to abide by the rules.

In a recent chapter in the battle against unfair competition online, the FTC zeroed in on automobile shipment broker AmeriFreight for its persuasive approach to seeking customer feedback. The FTC alleged in its complaint that AmeriFreight offered $50 discounts to customers in exchange for writing reviews on an independent review website and advertised its services to consumers as being “top rated” based on those reviews. In addition to the discount, reviewers automatically became eligible for a $100 “Best Monthly Review Award,” further incentivizing customers to write reviews. The complaint indicated that the issue was not the encouragement of reviews; the complaint alleged that AmeriFreight portrayed the reviews as unbiased and failed to disclose that the reviewers were compensated—a violation of Section 5 of the FTC Act. The case concluded late last month with the FTC’s approval of a final consent order which requires AmeriFreight to clearly disclose any “material connection” it has with an endorser and to not misrepresent customer reviews or product ratings. Continue reading

It’s Strictly Business: Yelp Allowed to Manipulate Reviews to Push Services

Screen Shot 2014-09-22 at 9.00.40 AMBy Alex Boguniewicz

Sticks and stones may break bones, but a bad review will surely generate a lawsuit. At least that seems to be the case with Yelp, which can breathe a sigh of relief after the latest litigation regarding its reviews. We have previously covered issues revolving around the online business review site, such as fake reviewers and identity disclosure of negative reviewers. In the most recent controversy, Levitt v. Yelp! Inc., the Ninth Circuit addressed the question of whether Yelp could be held liable for extorting or attempting to extort advertising payments from businesses by hiding positive reviews or manipulating negative reviews. The court unanimously held that even if the plaintiffs’ claims were true—which the court was far willing to concede—the plaintiffs had no cause of action because they failed to meet the narrow test for a civil extortion claim. This case presents the issue of whether this is merely an instance of savvy business tactics or an online “wise guy” scheme.

The case arose in 2010 when a car repair shop, a furniture restoration store, an animal hospital, and a dentist, all filed suit against Yelp in the Northern District of California, alleging civil extortion, attempted civil extortion, and violation of California’s Business and Professions Code. The plaintiffs alleged that Yelp offered business-advertising opportunities on its site for a monthly fee, and that any business that did not purchase the service faced retribution. Such alleged retribution included Yelp removing the business’s positive reviews, making the business’s negative reviews more prominent, and falsely authoring negative reviews. These actions were supposedly done as a way for Yelp to strong arm the plaintiffs into purchasing the advertising package. The district court ultimately dismissed the case for failure to state a claim. Continue reading