Opinion ID: 2814634
Heading Depth: 3
Heading Rank: 2

Heading: Sleekcraft Factors

Text: The Sleekcraft “eight-factor test for likelihood of confusion is pliant. Some factors are much more important than others, and the relative importance of each individual factor will be case-specific.” Brookfield, 174 F.3d at 1054. On a motion for summary judgment, courts may consider whether any of the Sleekcraft factors give rise to a genuine issue of fact. Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010). A court may be “far from certain that consumers were likely to be confused [and still be] confident that the question 14 MULTI TIME MACHINE V. AMAZON.COM is close enough that it should be answered as a matter of fact by a jury, not as a matter of law by a court.” Id. If there is a genuine issue of fact as to any of the factors, there is more likely to be a genuine issue of fact as to whether there is likelihood of confusion. To avoid summary judgment a plaintiff need not show that every factor weighs in his favor, only to make a strong showing as to some of them (though we note that, because the factors are not exhaustive, a plaintiff could presumably survive summary judgment by adducing evidence of likelihood of confusion that did not fall within one of the factors). Surfvivor, 406 F.3d at 630. Mindful that our analysis must be tailored to this case, we discuss below the five Sleekcraft factors we deem relevant to resolution of the question of summary judgment: the strength of the mark, relatedness/proximity of the goods, evidence of actual confusion, defendant’s intent, and the degree of care exercised by purchasers. Three of the Sleekcraft factors are irrelevant: similarity of marks, marketing channels, and likelihood of expansion. As to similarity of marks, Amazon is using MTM’s mark, not another mark in its display of “search results.” As to marketing channels, both MTM and Amazon sell watches on the internet, which is too widespread a market to affect the likelihood of confusion among customers. The possibility of expansion is irrelevant since MTM and Amazon both already sell high-end timepieces, as discussed below under the heading “relatedness of the goods.” We find that three of the remaining five relevant factors appear to weigh in favor of a finding of a likelihood of confusion, and we address these first. We hold that it is the province of a jury to determine how heavily each of these factors should weigh. MULTI TIME MACHINE V. AMAZON.COM 15
A mark’s strength is a measure of how uniquely identified it is with a product or service, and therefore how deserving of trademark protection. Fortune Dynamic, 618 F.3d at 1032. Two types of trademark strength are relevant: commercial and conceptual. Commercial strength refers to a mark’s recognition in the marketplace, that is, how widely recognized the mark is by customers. Id. at 1034. Neither MTM nor Amazon presented evidence of MTM’s commercial strength. We do not consider it; we turn to consideration of conceptual strength. “A mark’s conceptual strength depends largely on the obviousness of its connection to the good or service to which it refers. The less obvious the connection, the stronger the mark, and vice versa.” Id. at 1032–33. Conceptual strength is considered along a continuum, and in this circuit, marks may be classified as falling into one of five categories, from conceptually weak to conceptually strong: generic, descriptive, suggestive, arbitrary, or fanciful. Id. at 1033. Whether a mark is descriptive or suggestive is a question of fact. Id. at 1034. In an infringement suit, “the distinction [between a descriptive and suggestive mark] is important . . . because if the mark is suggestive, there is a stronger likelihood that a jury could reasonably conclude that the ‘strength of the mark’ factor favors the [plaintiff].” Id. Here, the district court found that “Amazon’s evidence is persuasive in showing that the marks are not strong; they are at best suggestive, and more likely descriptive.” 926 F.Supp.2d at 1139. However, the phrase “MTM Special Ops” requires “a mental leap from the mark to the product,” because the phrase does not expressly refer to watches. Fortune Dynamic, 618 F.3d at 1034. Indeed, by evoking elite military forces 16 MULTI TIME MACHINE V. AMAZON.COM (“Special Ops”), the goods suggested by the phrase are as likely to be protective gear, binoculars, weapons, or boots as they are watches. A jury could find that the mark is suggestive and conceptually strong because it does not obviously refer to watches, or that it is merely descriptive because the watches are made in a military style. Either way, the weight of the evidence is a question of fact, and there is a genuine issue of fact as to the conceptual strength of the mark. As in Fortune Dynamic, “a jury should assess the conceptual strength of [plaintiff’s] mark in the first instance.” 618 F.3d at 1033.
Like MTM, Amazon sells specialized, military-style watches. The similarity of the goods Amazon is selling weighs in favor of a finding of infringement. The district court cited Network Automation for the proposition that “though the products were interchangeable . . . that fact would ‘become less important if advertisements are clearly labeled or consumers exercise a high degree of care, because rather than being misled, the consumer would merely be confronted with choices among similar products.’” 926 F.Supp.2d at 1137 (citing Network Automation, 638 F.3d at 1150). The district court found “the same is true in this case; although Amazon and MTM both sell watches, which are identical products, this is misleading only if the consumer is confused, not if the consumer simply has clearly marked options.” Id. This conclusion assumes that Amazon customers will not be confused, and that the options are clearly marked, which are questions of fact as to which both parties submitted evidence. The facts of this case are distinguishable from Network Automation, where the claimant trademark holder’s products were displayed MULTI TIME MACHINE V. AMAZON.COM 17 alongside the alleged infringers’ products, thereby presenting “clearly marked options.” MTM watches are not displayed at all on the Amazon website. Whether customers will believe the options on Amazon’s page, which do not include MTM products, are clearly marked as having no association with, or approval by, MTM, and whether they will be confused, is an open question, and its answer does not render the identity of the goods here moot. Rather, a jury could find that it weighs in favor of finding likelihood of confusion. On summary judgment, the court may not make assumptions about the sophistication of would-be purchasers. Fortune Dynamic, 618 F.3d at 1030. Some members of MTM’s target demographic, men of 22–55 years of age who like military-styled, rugged products, may not be frequent internet shoppers. Such purchasers “may incorrectly believe that [defendant] licensed [the mark] from [plaintiff] . . . . Other consumers may simply believe that [defendant or the manufacturers it features] bought out [plaintiff], or that they are related companies.” Brookfield Commc’n, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1057 (9th Cir. 1999). This is especially possible here because Amazon touts itself as offering “Earth’s Biggest Selection of products,” and, as noted above, manufacturers sometimes market luxury brands under distinct marks. Even if further internet research could clarify the matter for a customer who wondered if MTM had been acquired or had acquired its competitor watch-makers, it is incorrect to conclude that “likelihood of confusion exists only when consumers are confused as to the source of a product they actually purchase. It is . . . well established that the Lanham Act protects against many other forms of confusion.” Brookfield, 174 F.3d at 1057. Network Automation found that on the internet, initial interest confusion is an untenable theory where sponsored links 18 MULTI TIME MACHINE V. AMAZON.COM appear on search pages that have “partitioned their search results pages so that the advertisements appear in separately labeled sections for ‘sponsored’ links.’” 638 F.3d at 1154. Here, the competitors’ products are not clearly labeled as being BBS results rather than keyword searches. The similarity of the goods means that an Amazon customer who searches for “MTM Special Ops” and then investigates watches manufactured by Luminox or Chase-Durer, even if he later purchases such a watch without any confusion as to its source, will have been subject to “confusion, not mere diversion.”7 Network Automation, 638 F.3d at 1149. Even though his confusion may be “dispelled before an actual sale occurs, initial interest confusion impermissibly capitalizes on the goodwill associated with a mark and is therefore actionable trademark infringement.” Playboy, 354 F.3d at 1025. Therefore, the similarity of goods weighs in favor of MTM, and a jury should determine just how much it weighs in favor of MTM.
“A defendant’s intent to confuse constitutes probative evidence of likely confusion.” Playboy, 354 F.3d at 1028. MTM submitted evidence that Amazon vendors and customers had complained to Amazon because they did not understand why they received certain non-responsive search results when they searched for products that are not carried by Amazon. The evidence showed that Amazon employees did not take action to address the complaints by explaining to the public how the BBS function works. One Amazon employee noted that explaining BBS to the public might draw 7 Amazon’s evidence that customers do not purchase competitors’ watches after searching “MTM SPECIAL OPS” is addressed below. MULTI TIME MACHINE V. AMAZON.COM 19 customers’ and vendors’ unwanted scrutiny to the matter. Amazon did not disclose to shoppers how its BBS worked. As in Playboy, this evidence suggests, “at a minimum, that defendants do nothing to alleviate confusion. . . . Although not definitive, this factor provides some evidence of an intent to confuse on the part of defendants.” Playboy, 354 F.3d at 1029. From evidence that “Earth’s most customer-centric company” took no action on these complaints, a jury could infer that Amazon intended to confuse its customers. We leave it to a jury to determine, if Amazon so intended, how important that intent is, and we turn to two factors that we think weigh in favor of Amazon.
Where evidence of actual confusion is submitted, it is “strong support for the likelihood of confusion.” Network Automation, 638 F.3d at 1151 (internal quotation marks omitted). But actual confusion “is not necessary to a finding of likelihood of confusion under the Lanham Act. Indeed, proving actual confusion is difficult . . . and the courts have often discounted such evidence because it was unclear or insubstantial.” Id. (internal quotation marks, citation, and brackets omitted). MTM did not submit colorable evidence of actual confusion. MTM offered its president’s testimony that he had knowledge of actual confusion. The district court found this testimony was too vague to constitute evidence. The president testified that someone he had met named Eric said, in reference to Amazon’s page, “it’s confusing.” Such testimony does not suffice to give rise to a genuine issue of fact, even were such hearsay admissible, as the record does 20 MULTI TIME MACHINE V. AMAZON.COM not provide support for the speculation that Eric was a potential customer. Amazon submitted evidence that purports to show that no customers were confused, because customers who searched for “Luminox” were 21 times as likely to purchase a Luminox watch as were customers who searched for “MTM Special Ops.” We do not find it surprising that customers who search for an item (Luminox watches) are more likely to buy that item than customers who did not search for it but searched for another product (MTM watches). But in the absence of evidence of actual confusion, we agree that the factor weighs in favor of Amazon. However, we are not persuaded that a jury could not view this purported evidence of no actual confusion as flawed because a user researching watches might initially be confused about the availability of MTM watches online and so not purchase a Luminox the same day.8 Further, some users did search for “MTM Special Ops” and purchase a competitor’s watch the same day, which a jury could find probative of some confusion. 8 In response to MTM’s critique that the data did not fully account for consumer behavior, the district court opined that “Amazon persuasively responds that the value of the data is not absolute but relative; there is no reason to think that those consumers searching for Luminox would exhibit different behaviors from those searching for MTM Special Ops.” 926 F.Supp.2d at 1140. However, the very relativity of the data makes its value a question for a jury, who might determine that Luminox customers on Amazon are different from would-be MTM Special Ops purchasers: Luminox customers make same-day purchases because the product they sought is available on Amazon. MTM Special Ops customers may wait a few days to buy a Luminox watch because it is not what they sought, but their interest in a Luminox watch was piqued because they were uncertain whether or how Luminox is affiliated with or approved by MTM. MULTI TIME MACHINE V. AMAZON.COM 21
As to the degree of care expected of a purchaser, when goods are expensive, purchasers can be expected to exercise greater care, though confusion may still be likely. Network Automation, 638 F.3d at 1152. MTM’s watches are priced between several hundred dollars to two thousand dollars. The district court did not err in finding that consumers could be presumed to use a high degree of care in purchasing such watches. However, in light of our determination that other factors give rise to genuine issues of fact, we note that a jury may find that Amazon presented evidence that “same day sales” are high for Luminox. This could be interpreted, by a jury, as proof that at least some persons who seek military watches are impulse buyers who do not spend as much time comparing products as careful buyers might. If so, the jury might accord the price of the watches little weight compared to the other factors. This factor and its relative importance are matters for a jury.