Amazon.com Escapes Trademark Suit After Appeals Court Reverses Itself

Amazon.com Inc did not violate the trademarks of a high-end watchmaker by offering alternative brands with similar styles in its search results, a federal appeals court ruled on Wednesday.

In a rare move, the 9th US Circuit Court of Appeals in San Francisco reversed its own opinion from July and said that a lower court correctly found in Amazon.com's favor because the search results would not likely confuse customers.

Multi Time Machine Inc makes the MTM Special Ops military-style wristwatch, which is not sold on Amazon's website, according to the ruling.

If an Amazon shopper searches for it, however, the site does not say it does not carry MTM products. Instead, Amazon displays MTM Special Ops in the search field and immediately below the search field, but lists only similar watches manufactured by MTM's competitors for sale.

Los Angeles-based MTM alleged this could cause customers to buy a competitor's watch, rather than encouraging them to look for MTM watches elsewhere.

MTM sued in 2011, and a federal judge in Los Angeles resolved the trademark claims in favor of Amazon.com before trial. In July, the 9th Circuit ruled that MTM's lawsuit should be allowed to proceed.

But after Amazon.com asked for a rehearing, the panel withdrew the previous decision and on Wednesday said MTM's case fails.

"Because Amazon's search results page clearly labels the name and manufacturer of each product offered for sale and even includes photographs of the items, no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products," the panel majority said in a 2-1 opinion.

Representatives for Amazon.com and MTM could not immediately be reached.

Circuit Judge Carlos Bea, however, dissented, saying that he believed an Amazon.com shopper looking for an MTM watch might initially think the watches on offer are affiliated with MTM.

The case in the 9th Circuit is Multi Time Machine Inc vs. Amazon.com Inc and Amazon Services LLC, 13-55575.

© Thomson Reuters 2015