dissatisfaction w/Amazon's partner program isn't TM infringement/false advertising

Melwani v. Amazon.com, Inc., 2022 WL 670919, NO. C21-1329RSM (W.D. Wash. Mar. 7, 2022)

Melwani owns the Royal Silk trademark for “a wide variety of products.” His marks are enrolled in Amazon Brand Registry, and Royal Silk Direct maintains an authorized Royal Silk “storefront” on Amazon.com. Nonetheless, Melwani alleged that Royal Silk was “plagued” by third party infringers, and his legal actions and notices allegedly resulted in the removal of about 200 infringing listings from Amazon.com that were attributed to about 100 different unauthorized third-party sellers over the last 2-3 years. Melwani alleged that Amazon’s Brand Registry has not offered proactive brand protection and that it has been “almost impossible” to remove any listing through Amazon’s Brand Registry.

His  “central allegation of wrongful conduct” was that, “when customers use Amazon’s Search Box (the search bar at the top of its e-commerce website) to search for ‘Royal Silk,’ results regularly include many products not manufactured by Plaintiff. These products are sold by other third-party sellers and Amazon itself.” For example, one search for “Royal Silk” under all departments on Amazon.com, yielded 60 product listings. Seventeen were for official Royal Silk products; 40 listings were “totally unrelated” to the query Royal Silk—of which 8 were paid sponsored ads for sellers who allegedly purchased the keywords “Royal Silk”; 32 were for third party sellers who allegedly “likely” purchased this keyword; and the remaining 3 were third party infringers, unlawfully using or showing the words “Royal Silk” in their product listings. But the Royal Silk Amazon storefront didn’t show up, nor “any product listings for Royal Silk pocket squares or handkerchiefs, of which there are allegedly over 200 product listings.” [So: is Amazon just bad at search?] Similar searches were also “frustrating”; Melwani alleged that the search results were “erroneous, scattershot, mingled” as well as “consistently confusing, misleading, false, and deceptive.”

Melwani alleged misappropriation of his trademark through use of “Royal Silk” as a keyword/metatag in ways that confuse the customer, “rob and thwart Plaintiff’s ability to exercise his right to quality and image control,” and ultimately allow Amazon to “unlawfully profit[ ] from its own targeted use of Plaintiff’s marks.” He also alleged that Amazon “avoid[s] serving up infringers when it comes to keyword searches for its own products” by not allowing third party sellers to bid on “Fire TV” or “Echo Show” or “Ring Doorbell.”

Infringement:  Multi Time Mach., Inc. v. Amazon.com, Inc., 804 F.3d 930 (9th Cir. 2015), held as a matter of law that “[b]ecause Amazon’s search results page clearly labels the name and manufacturer of each product offered for sale and even includes photographs of the items, no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products.” MTM was directly on point and precluded any liability, given the search results that were part of the complaint’s allegations. It didn’t matter that, if a user searches “royal silk,” the phrase will appear in the URL for the search page. “[T]he URL merely shows how the website’s data is organized and/or the search term entered by the consumer, and … this does not violate trademark law.”

False designation of origin/false advertising: Lasoff v. Amazon.com, Inc., 741 F. App’x 400, 401 (9th Cir. 2018), “rejected trademark infringement claims like Mr. Melwani’s, holding that ‘Amazon is permitted to use a trademarked search term to direct consumers to competing products, as long as the search results are clearly labeled.’” And it dismissed false advertising claims as “duplicative of his infringement claim.” In providing results for trademarked search terms, “Amazon did not make any statements about the quality of Mr. Lasoff’s products.” So too here.

But the false designation of origin claim wasn’t dismissed because the court didn’t think Amazon addressed it (I don’t see why—how could it differ from trademark infringement here?).

Trademark dilution: Not plausibly pled to be famous, but leave to amend.

NY unfair competition/dilution: These require bad faith, and the only supporting fact alleged was that Amazon is “generally aware of Plaintiff’s infringement concerns and related legal actions,” which wasn’t enough. Even “[p]rior knowledge of a senior user’s trade mark does not necessarily give rise to an inference of bad faith and may [actually] be consistent with good faith.” Thus, “[m]ore than inaction is needed here.”