Amazon wins over trademark suit as Appeals Court reverses earlier ruling

The US federal appeal court ruled on Wednesday that Amazon.com did not violate the trademarks of MTM watch by offering alternative brands with similar styles in its search result.

Multi Time Machine (MTM) is a high-end watch company that manufactures the MTM Special Ops watch, which is not sold in Amazon. In fact, Amazon didn't sell any watch manufactured by MTM.

But when a customer searching for MTM watch on Amazon.com, the site showed other brands. Amazon thus offered other brands in response to a customer looking for MTM watches.

MTM argued that Amazon used MTM's trademark name to confuse buyers, who may ultimately buy a competitor's goods. The company suspected that when a customer looking for MTM watch on Amazon website they might purchase other watch brands based on Amazon's suggestions, rather than to look for MTM watches elsewhere.

MTM sued Amazon in 2011 for trademark violation. The 9th Circuit's court then ruled in July that MTM's lawsuit should be allowed to proceed.

However, the panel judges changed the previous decision after Amazon's rehearing. In a superseding opinion published on Wednesday, the three-judge panel from the US Court of Appeals for the 9th Circuit said that the case failed.

Judge Barry Silverman wrote, as reported on Reuters, "Because the page clearly labeled the name and manufacturer of each product offered for sale and even included photographs of the items, no reasonably prudent shopper accustomed to shopping online would likely be confused as to the source of the products."

Amazon could actually display explicitly that it does not sell MTM watches, rather than suggest other brands. Compare to other websites like Overstock.com. When we type 'MTM Special Ops' into its search engine, the site will display: 'sorry, your search returned no results'.

The Circuit Judge Carlos Bea, has a different opinion about the case, according to Demanjo. The judge said that he believed an Amazon shopper who looking for an MTM watch might initially think the watches on offer are affiliated with MTM.

Judge Bea added that the decision about whether confusion is likely should up to jury. He mentioned that the district court judge shouldn't have ruled in Amazon's favor. Bea writes that MTM might lose, but there's a genuine issue of fact coming from the case.

In fact, various trademark owners had sued search engines for years for trademark violation, saying that using their trademark as a search keyword against the law. But those trademark owners were all defeated by the search engine companies including Yahoo and Google that defeated the keyword advertising suit earlier this year.