Multi Time Machine v. Amazon.com

No one can resist shopping online in today’s busy times. Online retailing is one of the low costing and productive methods of earning more profits without much effort put in. Take Amazon for example. Amazon, in a bid to gain potential consumers, display alternative products when they look for the initial product they liked. These complementary products, very often can turn into competitive products by showing other brands selling the same good. This move boomerangs on the brand owner as very often the consumer can be lured into buying the competitor’s product, when their intention was not so.

Take the case of Multi Time Machine, Inc. v. Amazon.com, 2013 WL 638888 (C.D. Cal. Feb. 20, 2013)

Multi Time Machine (MTM), the plaintiff, makes expensive “military and tactical” watches and tightly controls its distribution channel to prevent resales on Amazon. Hence, when potential customers visited Amazon and looked for a product ‘MTM Special OPS’, Amazon’s search results did not procure any result for MTM products due to their distribution channel norms. Instead, on searching for MTM products, the search results showed the watches that belonging to MTM’s competitors, like Luminox and Chase-Durer.

Hence, it can be said that Amazon merchandises its customers.  MTM sued Amazon for trademark infringement. It was a battle on the terms of owner v. retailer lawsuit for merchandising competitor’s products.  This cannot be a typical trademark infringement as Amazon is just abiding by the rules set for them.

The Court emphasized on the fact that Amazon did not create any likelihood of confusion among potential consumers. Simply by posting products of different brands, would not amount to any infringement. The search results page prima facie explains to the consumers that they are spoilt for choice. An illustrative analogy is provided by the Court:

“the instant situation does not appear to be a case of palming off in the traditional sense. It is akin to the consumer asking for a Coca-Cola and receiving a tray with unopened, labeled, authentic cans of Pepsi-Cola, RC Cola, Blue Sky Cola, Dr. Pepper, and Sprecher Root Beer, and a copy of Coca Kola: The Baddest Chick, by Nisa Santiago. This is a substitution, but given the context it is not infringing because it is not likely to confuse.”

In legal parlance, the doctrine of palming off is applied to the particular facts of a case in which the defendant is accused of engaging in Unfair Competition against the plaintiff.

In the present case, the potential consumers would definitely understand the difference between competing brands shown on the search results page. The Court held that merchandising by online retail stores of its search results does not violate any Trade Mark Law.

While any Trade Mark owner may not be happy with the competitors being displayed on any retail store, be it online or offline, there is nothing much that he can do to prevent the same.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

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