Older case, but of interest because of its interpretation of
search engine results. The district
court found that “Beyond the Rack,” which does online short-term sales for
members only, was not likely to cause confusion with Nordstrom Rack, despite
Nordstrom’s registrations for RACK and THE RACK. In practice, the district court found, RACK
and THE RACK were always presented in close connection with the Nordstrom mark
(does that mean the registration should be invalidated?), and BTR’s uses were
not likely to cause confusion.
Analyzing search traffic over “various periods” during 18
months, about 117 people arrived at nordstrom.com by typing “beyond” and “rack”
into a search engine. About a third also
included some permutation of Nordstrom, such as “norstrom,” “nostram,”
“nordstron,” “nordstrum,” “northstrom,” or “nordstrm.” During another, more recent period, Nordstrom
was able to identify 47 visits to nordstrom.com from similar searches, with 27
also including a variation of Nordstrom.
The court stated: “To the extent that this evidence shows actual confusion,
which is debatable, it indicates that any confusion probably benefits Nordstrom;
the majority of Nordstrom website ‘hits’ … resulted from the input of only ‘beyond’
and ‘rack,’ the main words in BTR’s mark, and the conclusion follows that some
of these consumers were actually looking for BTR, but were instead lured to
Nordstrom’s website.” (The court
nonetheless rejected a reverse confusion theory, as there is no chance that BTR’s
mark will overwhelm Nordstrom’s.) If
consumers were inquiring about the relationshp between the parties, that was
too ambiguous to demonstrate confusion.
As for social media, for a 20-month period, Nordstrom
offered only six examples of alleged confusion.
At least one indicated “the opposite of confusion”: comparison, not
association. “Just like Nordstrom’s Rack
but online. It is free to sign up and when you do, you get a $10 first time
credit!” Another post used metaphoric language: “just ordered a bunch of stuff
I probably don’t need from beyond the rack. think online nordstrom rack.” A
third “has been so stripped of context that its meaning is unclear: “nordstrom
rack even cheaper. Beyond the Rack.”
Three of the examples did indicate confusion: “Just received
email from Nordstrom Beyond the Rack - Tom Ford sunglasses on sale”; “NORDSTROM
bought BeyondTheRack . . . .”; and “If you didn’t know . . . @BeyondTheRack is
owned by @Nordstrom but w/o coupons & returns differ. BTR sells off
leftover & reject inventory.”
The court considered these examples de minimis given the
extended period of coexistence, and also held that they didn’t manifest
confusion affecting a purchasing decision, as opposed to confusion in the
abstract. The last one made very clear
that the parties’ policies differed. The
court was more impressed that Nordstrom had received no customer complaints in
any form. “If, over the course of the
past three years, consumers had purchased from BTR under the mistaken belief
they were dealing with Nordstrom, only to learn they could not take advantage
of Nordstrom’s generous return policy, or forming some other reason for
dissatisfaction, Nordstrom would have presumably received at least one call,
e-mail, or letter, or could have discovered at least one social media post or
blog entry to that effect.” Nordstrom’s failure to proffer such evidence belied
its assertion of confusion.
The court then proceeded to wildly overestimate consumer
privacy consciousness in its discussion of consumer sophistication: “Although
the goods at issue might be considered inexpensive, a consumer desiring to purchase
items from BTR must become a member and provide personal information, including
an e-mail address. Because a relationship is formed between BTR and its members
as a prerequisite to any transaction, the Court cannot focus solely on the
price of the items being offered and sold.”
Instead, “a reasonably prudent consumer would exercise a higher degree
of care in dealing with BTR than he or she would in making cash purchases at
Nordstrom Rack’s or its competitors’ brick-and-mortar stores.”
Overall, given the weakness of Nordstrom’s marks, a crowded
field of similar uses of “Rack,” and the level of care exercised by “flash sale”
customers, the court wasn’t willing to find a likelihood of success in the
absence of strong evidence of actual confusion.
Turning to the remaining factors, the court joined the
courts holding that eBay abrogated
the earlier rule that a presumption of irreparable harm arises from a showing
of likely success on the merits of an infringement claim, contra McCarthy. “[F]or
purposes of securing either a preliminary or a permanent injunction,
irreparable harm may not be presumed in the context of a trademark infringement
claim.” And Nordstrom didn’t offer much
evidence of irreparable harm: “no customer complaints, no indication that BTR
sells inferior products or offers poor customer service, and no record of lost
sales or of misdirection from Internet search engines.” Plus, though the court didn’t hold Nordstrom’s
extensive delay (about 2 years) dispositively against it because Nordstrom was
busy fending off a challenge to the validity of the RACK mark, it was relevant that
Nordstrom did express willingness to coexist with BTR before negotiations broke
down over whether BTR could expand beyond “flash sales,” and that BTR’s
business had stayed basically the same as it was during the negotiations.
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