The Critical Role of Labeling in E-Commerce

In Multi Time Machine, Inc. v., Inc. (see previous post), the U.S. Court of Appeals for the Ninth Circuit noted that, in the context of “Internet commerce,” clear labeling might eliminate the likelihood of confusion created by the use of a trademark.

The court found that the labeling of search results that feature competitors’ products is important and concluded that Amazon’s labeling created a genuine issue of fact that required further litigation — regardless of how the traditional Sleekcraft analysis played out. Specifically, it held that a jury could infer that users who are confused by the search results are confused as to why MTM products aren’t listed.

Because Amazon doesn’t forestall any confusion by informing users that it doesn’t carry the products, a jury could determine that confused users will wonder whether a competitor has acquired MTM or is otherwise affiliated with or approved by MTM. Thus, the court said, a jury could ultimately infer that the labeling of the search results — and Amazon’s failure to notify customers that it doesn’t have results that match MTM’s mark — give rise to initial interest confusion.