Amazon is facing a court battle in California that could lead to a revolution in how search results are displayed on ecommerce sites.
The case brought by the watchmaker Multi Time Machine (MTM) alleges that a search for the firm’s products on Amazon will direct customers to competitors’ ranges, causing potential confusion because Amazon does not make clear that it does not stock MTM products.
A federal appeals court ruled on Monday that MTM was entitled to a trial over the matter, which could have significant implications for how ecommerce sites arrange their search functions.
Citing the Lanham Act, an American trademark statute of law, federal judge Carlos Bea noted that a defendant infringes a trademark when it is used "in a manner likely to cause confusion as to a good’s source", affiliation or association.
To win its case MTM will have to prove that Amazon creates an "initial interest confusion", in which a customer becomes confused about the source of a product before the purchase takes place.
In such an instance a trademark infringement can still take place even if that confusion is resolved before a purchase takes place, according to the court filing, because the sale is thought to "capitalise on the goodwill associated with a mark".
"We are by no means certain that MTM will be able to prove likelihood of confusion under an initial interest confusion theory," Bea wrote in his judgement. "But we are confident the matter can be determined only by resolving genuine issues of material fact."
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The ruling overturns a previous summary judgement by a district court.
Writing in dissent, federal judge Barry Silverman said: "In light of Amazon’s clear labelling of the products it carries, by brand name and model, accompanied by a photograph of the item, no rational trier of fact could possibly find that a reasonably prudent consumer accustomed to online shopping would likely be confused by the Amazon search results."
Amazon has yet to respond to requests for comment.
