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Lasoff v. Amazon.Com Inc.

United States District Court, W.D. Washington, Seattle

January 26, 2017

STEVEN LASOFF, Plaintiff,
v.
AMAZON.COM INC, Defendant.

          ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

          Barbara Jacobs Rothstein U.S. District Court Judge

         I. INTRODUCTION

         This matter is before the Court on Defendant's motion for summary judgment. (Dkt. No. 49.) The motion seeks dismissal of all claims filed by Plaintiff: trademark infringement (15 U.S.C. § 1125(a) and N.J.S.A. § 56:3-13.16), false advertising (15 U.S.C. § 1125(a)), unfair competition (15 U.S.C. § 1125(a), N.J. Stat. § 56:4-1, and common law), tortious interference with prospective economic advantage, gross negligence (New Jersey common law), monopolization (Sherman Act § 2), unjust enrichment and promissory estoppel. (See Dkt. No. 1, Complaint, Counts I - IX, pp. 8-15.) Plaintiff opposes the motion.

         Upon review of all briefing, the applicable case law and relevant parts of the record, the Court GRANTS summary judgment to Defendant; Plaintiff's claims are ordered DISMISSED with prejudice in their entirety. The Court's reasoning follows:

         II. LEGAL STANDARD

         Summary judgment is appropriate if the evidence, when viewed in the light most favorable to the non-moving party, demonstrates “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v. Cnty of L.A., 477 F.3d 652, 658 (9th Cir. 2007). The court is “required to view the facts and draw reasonable inferences in the light most favorable to the [non-moving] party.” Scott v. Harris, 550 U.S. 372, 378 (2007).

         The moving party bears the initial burden of showing there is no genuine issue of material fact and that he or she is entitled to prevail as a matter of law. Celotex, 477 U.S. at 323. If the moving party meets its burden, the burden shifts to the non-moving party to “make a showing sufficient to establish a genuine dispute of material fact regarding the existence of the essential elements of his case that he must prove at trial.” Galen, 477 F.3d at 658.

         III. BACKGROUND

         Plaintiff Steven Lasoff (“Lasoff”) is the sole owner of a business known as Ingrass, an enterprise which has marketed artificial turf and related products since 2004. (Dkt. No. 55-1, Decl. of Lasoff, ¶ 2.) In 2008, Lasoff entered into a Business Solutions Agreement (“BSA”)[1] with Defendant Amazon.com, Inc. (“Amazon”).

         Amazon operates the website www.amazon.com, an internet retail marketplace through which Amazon and third-party vendors sell their products. Initially, Lasoff experienced a “steady and substantial rise” in sales of his products, but in 2013 those sales began to “plummet, ” both on his own website (Ingrass.com) and Amazon's website. (Id. at ¶¶ 12-13.)

         Plaintiff's research revealed that third-party sellers were offering cheaper, counterfeit “Ingrass” products for sale on Amazon.com. (Id. at ¶ 14.) There is no dispute that Amazon's policies forbid third-party vendors from selling products which violate the intellectual property rights of others. (Dkt. No. 50, Decl. of Schelle, Exs. E, F.) The problem, from Plaintiff's perspective, was that when potential online consumers would click on links advertising “Ingrass” products in Defendant's promotional emails or in “sponsored link” advertisements on third-party search engines (e.g., Google, Bing or Yahoo), they were directed, not to Plaintiff's Ingrass products on Defendant's website, but “to competing listings which falsely advertised products as ‘Ingrass' products at a substantially discounted price.” (Decl. of Lasoff, ¶ 16.)

         There is no dispute regarding how Amazon creates its promotional emails and its “sponsored link” advertising on third-party search engines. The email marketing at issue is an automated process whereby an algorithm selects an advertisement to email to a customer based on information retained from that customer's browsing sessions on Defendant's website (e.g., products which the customer viewed online but did not purchase). (Dkt. No. 51, Decl. of Brauner, ¶ 4.) The content of the advertisement within the email is supplied by the vendor of the product, who has represented to Defendant that it has the right to license Amazon to display that content. (Decl. of Schelle, ¶ 9.)

         Similarly, the facts concerning Amazon's advertisement on third-party search engines are not disputed. Defendant has an automated system which generates “keywords” (words or phrases related to products or product names) based on consumer searches on its websites.

An algorithm determines the terms that are bid as keywords for search engine advertising. Once a keyword is bid, when users search for that term on Google or another search engine, the results will display an ad for Amazon or for a product listed on amazon.com that is related to the keyword.

(Decl. of Brauner, ¶ 6.) These “sponsored link” advertisements appear above the results of an internet user's search once the keyword is entered into the search engine.

         Plaintiff asserts that his complaint is not directed at the sale of competing and/or counterfeit products on Defendant's website. (Decl. of Lasoff, ¶ 18.) Lasoff's complaint, rather, “is that Defendant has misappropriated the Ingrass trade and domain name without permission, by bidding on, and paying for, the keywords ‘Ingrass' and/or ‘Ingrass.com' on third-party search engines.” (Dkt. No. 55, Response at 5.) He further alleges that Amazon's use of “Ingrass” and “Ingrass.com” as keywords was unauthorized and a violation of his trademark and other legal rights. (Complaint, Counts I - IX, pp. 8-15.)

         IV.DISCUSSION

         There are no disputed material facts, simply a dispute about the legal impact of the facts; as discussed more fully below, Defendant is entitled to summary judgment as a matter of law on all of Plaintiff's claims. The Court will first examine a procedural issue raised by Plaintiff, then proceed to a summary judgment analysis of his claims.

         A. Fed.R.Civ.P. 56(f)

         Plaintiff opens his responsive briefing with a section devoted to what appears at first blush to be a motion to continue or deny the summary judgment motion on Fed.R.Civ.P. 56(f) grounds; specifically, that certain alleged deficiencies in Defendant's discovery responses have left him without the facts required to fully respond to the dispositive motion. (Dkt. No. 55, Response at 8-9.) Curiously, however, he then rescinds that motion in a footnote:

If the information requested in discovery was critical to defending against the fundamental claims in this motion, Lasoff would have moved for a continuance under FRCP 56(f). Because Lasoff can adequately defend against summary judgment without resort to the requested information though, it is not necessary to make such a motion.

(Id. at 9 n.4.) The Court will take Plaintiff at his word and analyze the parties' arguments based on the evidence provided.

         B. The Communications Decency Act and Plaintiff's state law claims

         The Communications Decency Act (47 U.S.C. § 230; “CDA”) states that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1). The statute does contain some exceptions to this immunity, among them that “nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.” 47 U.S.C. § 230(e)(2). However, the Ninth Circuit has held this “intellectual property” exclusion applies only to federal intellectual property law. Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1119 (9th Cir. 2007).[2] Hence, if the CDA applies to these facts, Plaintiff's state law claims cannot survive.

         The Court finds that the CDA does apply. Plaintiff does not contest that Amazon is “an interactive computer service;” rather, he argues that the information which forms the basis of his claims (i.e., the emails and online advertising generated through Amazon's “keyword” algorithm) has not been “provided by another information content provider” as the statute requires. His position is that, in creating the algorithm that generates the keywords and then purchasing the right to use them on third-party search engines, Amazon is a “direct actor” rather than a passive conduit of information content generated by some other provider.

         The Ninth Circuit has spoken on this issue. In Carafano v. Metrosplash.com, Inc., 339 F.3d 1119 (9th Cir. 2003), an online dating service was held, under the CDA, to be immune from liability for false representations posted on the website regarding the plaintiff. The Carafano court cited with approval the ...


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