Source:youtube

A watch company has alleged that Amazon.com, Inc. (NASDAQ:AMZN) is misleading customers by how it arranges search results on its site. Multi Time Machine (MTM), a watchmaker whose watches are not sold by Amazon makes the claim that Amazon displays similar watches from competitor companies when a user searches for its MTM Special Ops watches instead of clarifying that the website does not sell MTM’s watches.

This could result in customers purchasing watches from MTM’s competitors on Amazon instead of looking for the Special Ops watches elsewhere. As per MTM’s attorney, Eric Levinard, other websites usually would have a message stating that they don’t sell a particular product. Instead of making it clear that it doesn’t sell MTM products, Amazon displays an array of similar watches manufactured by competitors of MTM.

In 2011, MTM sued Amazon for the first time charging it of trademark infringement. A lower court gave a ruling in favor of Amazon, which was contested by MTM. This Monday, the 9th US Circuit Court of Appeals in San Francisco, overturned the lower court’s decision in a 2-1 ruling.

The court concurred with MTM’s stand. In the court’s opinion, even if users ultimately realize they weren’t buying from MTM, the list of results may cause initial confusion. MTM claims that Amazon’s use of MTM’s trademarked label is likely to confuse purchasers, who might ultimately end up buying competitor’s goods.

The district court found Amazon’s use of MTM’s trademark creating no confusion in the eyes of law. However, MTM could possibly win, if it explains how Amazon is creating a “likelihood of confusion”? Judge Barry Silverman dissented opining that customers wouldn’t be misled as Amazon labels each watch with its manufacturer.

If MTM ultimately gets a favorable ruling, Amazon would be compelled to remove its name from search results and also on other searches on items it doesn’t sell.

Sources: furtune, bsuinessinsider