Melwani v. Amazon.com Inc

CourtDistrict Court, W.D. Washington
DecidedJanuary 18, 2024
Docket2:21-cv-01329
StatusUnknown

This text of Melwani v. Amazon.com Inc (Melwani v. Amazon.com Inc) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Melwani v. Amazon.com Inc, (W.D. Wash. 2024).

Opinion

6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 PRAKASH MELWANI, 9 CASE NO. C21-1329RSM 10 Plaintiff, ORDER GRANTING IN PART AND 11 v. DENYING IN PART MOTION FOR SUMMARY JUDGMENT 12 AMAZON.COM, INC., et al.,

13 Defendants. 14

15 I. INTRODUCTION 16 This case comes before the Court on Defendant Amazon.com, Inc. (“Amazon”)’s Motion 17 for Summary Judgment. Dkt #87. Plaintiff Prakash Melwani has filed a sealed opposition brief. 18 Dkt. #103. The Court has determined that it can rule without the need of oral argument. For the 19 following reasons, the Court GRANTS IN PART AND DENIES IN PART Amazon’s Motion. 20 21 II. BACKGROUND 22 Plaintiff Melwani is the individual owner of the Royal Silk trademark and manufactures 23 and sells a wide variety of products using this trademark through his company Royal Silk Direct, 24 Ltd. Dkt. #94 at 9 and 17. Defendant Amazon is the well-known online retail giant. 25 Amazon sells its own products and allows third parties to sell products on its website. 26 Royal Silk products have been sold on Amazon.com since 2006. Dkt. #91 (“Leach Decl.”), ¶ 5. 27 Amazon allows third-party sellers like Royal Silk Direct to set their own prices and to display 1 2 their own information in product listings. 3 As a seller on Amazon, Plaintiff agreed to the Amazon Business Solutions Agreement 4 (“BSA”). Id. at ¶7. The BSA is the contract that governs the relationship between Amazon and 5 third-party sellers on Amazon. Id. Plaintiff has also enrolled in Amazon’s Brand Registry, which 6 is a program designed to help rightsholders protect their brands. Dkt. #96 (“Allen Decl.”), ¶¶ 3– 7 4. Royal Silk Direct maintains an authorized Royal Silk “storefront” on Amazon.com. 8 Plaintiff alleges he has been “plagued” by third party infringers of the Royal Silk marks 9 10 across categories of goods at the Amazon marketplace. Dkt. #49 at 6. He attaches to Amended 11 Complaint several screenshots from Amazon.com, relied on as evidence by both parties. See id. 12 at 30–40. In the last two to three years, Plaintiff alleges that legal actions and notices have resulted 13 in the removal of about 200 infringing listings from Amazon.com that were attributed to about 14 100 different unauthorized third-party sellers. Id. Plaintiff’s central allegation of wrongful 15 conduct is that when customers use Amazon’s Search Box (the search bar at the top of its e- 16 commerce website) to search for “Royal Silk,” results regularly include many products not sold 17 18 by Plaintiff. These products are sold by other third-party sellers and Amazon itself. Plaintiff 19 alleges that these search results are “outright false or outright erroneous” as well as “false, 20 deceptive and misleading in each case and likely to cause mistake or to deceive the public about 21 the origin, sponsorship, connection, association, or affiliation of the third-party sellers to Plaintiff 22 and its valid Royal Silk marks.” Id. at 15. Plaintiff alleges that Amazon has misappropriated his 23 trademark name by using the keyword “Royal Silk” on its webpage in various ways that: confuse 24 25 the customer, “rob and thwart Plaintiff’s ability to exercise his right to quality and image control,” 26 and ultimately allow Amazon to “unlawfully profit[] from its own brands’ targeted use of 27 Plaintiff’s marks.” Id. at 18. Plaintiff alleges that Amazon sells the “Royal Silk” keyword to 1 2 third party advertisers. Id. at 19. 3 The way that search results are generated on Amazon.com is not intuitive or simple. As 4 explained by Amazon’s attached declarations and exhibits, the search results display a 5 combination of what the customer likely wants (as determined by Amazon) and what sellers want 6 the customer to see (as determined by Amazon and sellers willing to pay advertising fees to 7 Amazon). According to Amazon, sponsored ads may be displayed at the top of, alongside, or 8 within shopping results and on product pages. Dkt. #93 (“Sengupta Decl.”), ¶ 3. Ads are shown 9 10 to customers on search results pages based on keywords. Id. Amazon allows third parties to bid 11 on keywords in four different ways: broad, phrase, exact, or negative. Id. at ¶ 4. A “broad” match 12 may include singulars, plurals, variations, synonyms, and related terms as determined by the 13 meaning of the keyword and the context of the advertised products. Id. at ¶ 5. The keyword itself 14 may not be contained in the customer shopping query. Id. For “phrase” keyword bids, the 15 shopping query must contain the exact phrase or sequence of words. Id. A shopping query for 16 “exact” keyword bid must exactly match the keyword or sequence of words in order for the ad to 17 18 appear, and may also match close variations of the exact term. Id. Sellers may also use “negative” 19 keyword bids to exclude queries, either using negative phrases or negative exact match types. Id. 20 The parties agree that “[t]he act of Amazon allowing third parties to bid on ‘Royal Silk’ as 21 advertising keywords is permissible under New York law.” Dkt. #94 (“Bennett Decl.”), ¶14, Ex. 22 L at 1. 23 When ads are shown to customers in search results, they are marked as “Sponsored” in a 24 25 smaller, grayed-out font. See Dkt. #87 at 10. It is not immediately obvious from the search result 26 page who is selling each product—the image, seller, and product description are provided without 27 a clear label for each. See, e.g., id. (a screenshot with a product image of a sack with the words 1 2 “Royal Silk” emblazoned on the front, followed by a bold word “Fairfield,” followed by the words 3 “Fairfield… Royal Silk Fiber Fill Bag…”). Once a customer clicks on an item for sale, however, 4 the seller is identified on the next page in the “sold by” line immediately below the “Add to Cart” 5 and “Buy Now” buttons on each product’s detail page. Leach Decl. at ¶4. During the checkout 6 process, the order confirmation page also identifies the seller on the same page where the user 7 clicks the “Place Your Order” button. Id. 8 The Amended Complaint brought causes of action for false designation of origin under 9 10 15 U.S.C. § 1125(a)(1)(A), false advertising under 15 U.S.C. § 1125(a)(1)(B), breach of the 11 implied covenant of good faith and fair dealing, trademark dilution under N.Y. General Business 12 Law § 360-1, and unfair competition under the common law of New York. Dkt. #49. All of these 13 were dismissed by this Court except the New York trademark dilution and unfair competition 14 claims. Dkt. #56. These are now the subject of the instant Motion. 15 Amazon has retained an expert, Hal Poret, who conducted a survey of 500 participants to 16 test brand awareness of Plaintiff’s Royal Silk marks. Dkt. #88 (“Poret Decl.”). Half of the 17 18 participants were selected from New York State, the rest coming from around the United States. 19 Id. at 22. Only 12% of the survey respondents were aware of the brand Royal Silk. Id. at 14. In 20 contrast, consumers recognized comparator brands Under Armour, Kate Spade, and Nine West at 21 95.8%, 78.0%, and 71.0% respectively. Id. 22 III. DISCUSSION 23 A. Legal Standard for Summary Judgment 24 25 Summary judgment is appropriate where “the movant shows that there is no genuine 26 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 27 R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Material facts are 1 2 those which might affect the outcome of the suit under governing law. Anderson, 477 U.S. at 3 248.

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Melwani v. Amazon.com Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/melwani-v-amazoncom-inc-wawd-2024.