In the latest suit against the Seattle-based e-commerce conglomerate (The Comphy Co. v. Amazon.com, Inc.), Amazon is being accused of trademark infringement by upscale bedding company, The Comphy. In its complaint filed in U.S. District Court in Illinois, the company, based in Washington, alleges that Amazon has been providing search results for “inferior third-party sheets” whenever a user searches for its company or terms similar to its company.
Alleged Trademark Infringement
In other words, when consumer search terms such as “comph” and “comphy,” Amazon’s algorithm populates a list of unauthorized third party sheets, bedding, pillows, and other related merchandise. This includes similarly named competitor, “Comfy.” However, Amazon does at no time inform the consumer that it does not in fact sell Comphy sheets and therefore often leads consumers to believe that they are receiving brand-name Comphy sheets; something that could have a major effect on the integrity of Comphy’s brand, and ultimately it’s revenue. Comphy shared that unaware customers have taken issue with the quality of the products. Furthermore, Comphy alleges that Amazon is using “Comphy” to trigger paid ads on Bing and Google.
Damages and an Injunction
In connection with this, Comphy has filed a complaint in federal court seeking a variety of monetary damages as well as an injunction, which would prevent Amazon from displaying Comphy’s competitor products when searching for the brand name itself and from selling any goods with a “confusingly similar” name.
Amazon’s Algorithms and ‘Optimization’
This lawsuit comes at a time during which there is vast concern for Amazon’s activities. Growing concerns have emerged over Amazon’s growth of private labels. Last month, the New York Times discussed Amazon’s efforts to engage in a careful practice of “optimizing” word-search algorithms, analyzing its sales data, and utilizing user reviews in order to lead shoppers in the direction of its own products, and away from its competitors. According to the publication, Amazon has used “its powerful platform to bolster its private-label business,” even going as far as to mention the speculation that its activities could be viewed as “monopolistic”.
Could Amazon be in Legal Trouble?
According to Chris Sagers, an antitrust professor at the Cleveland-Marshall College of Law in Ohio, who spoke with the Times, “if they are getting massive penetration in the market and preventing customers from buying products from their competitors,” it may prove to be of issue from an antitrust perspective.
Unfortunately for Amazon, this is not the first time that suit has been brought against the company concerning its search engine. Multi-Time Machine, a luxury watch company, which sells $2,000 watches also alleged trademark infringement under similar circumstances. The company claimed that Amazon had displayed other watches when consumers would search for “Multi-Time Machine”. However, that argument was rejected by a federal appellate court in 2015, finding that the page results did not constitute anything that should confuse consumers.
Posted in: Trademarks