SAN FRANCISCO (Reuters) - Amazon.com Inc must face a trademark lawsuit brought by a watchmaker which says the online retailer's search results can cause confusion for potential customers, a federal appeals court ruled.
The 2-1 opinion from the 9th U.S. Circuit Court of Appeals in San Francisco on Monday reversed a lower court ruling, and said high-end watchmaker Multi Time Machine Inc. is entitled to a trial on its trademark allegations.
An Amazon representative could not immediately be reached for comment.
MTM Special Ops are a military style model of watches which are not sold on Amazon's web site, according to the court ruling. If an Amazon shopper searches for it, however, Amazon the site will not say it does not carry MTM products.
Instead, Amazon displays MTM Special Ops in the search field and immediately below the search field, along with similar watches manufactured by MTM's competitors for sale.
MTM alleged this could cause customers to buy from one of those competitors, rather than encouraging the shopper to look for MTM watches elsewhere.
MTM sued, and a Los Angeles federal judge resolved the trademark claims in favor of Amazon before trial. In its ruling on Monday, the 9th Circuit said MTM's lawsuit should be allowed to proceed.
"We think a jury could find that Amazon has created
a likelihood of confusion," the court wrote.
In a dissent, 9th Circuit Judge Barry Silverman said Amazon's search results page clearly labels manufacturer for each watch.
"No reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products," he wrote.
MTM attorney Eric Levinrad on Monday said that unlike Amazon, other online retailers will give customers a message that they don't sell a product if that's the case.
The case in the 9th Circuit is Multi Time Machine Inc vs. Amazon.com Inc and Amazon Services LLC, 13-55575.
Reporting by Dan Levine, Editing by Franklin Paul and Andrew Hay