Wreal, LLC v. Amazon.com, Inc.

Majority - Lagoa, Circuit Judge

Yes, the district court erred in granting summary judgment because it misapplied the likelihood-of-confusion test in the context of reverse-confusion trademark infringement. The Court explained that reverse confusion cases differ from forward confusion cases because the plaintiff, typically a smaller, senior user, fears consumers will associate its mark with the larger, junior user's corporate identity, rather than the defendant profiting from the plaintiff's goodwill. Consequently, the well-established seven-factor test for likelihood of confusion must be applied with specific modifications for reverse confusion. The Court found the district court erred in several areas. First, on the distinctiveness of the mark factor, the lower court failed to consider the overwhelming commercial strength of Amazon's mark, which is crucial in reverse confusion where a powerful junior user can "overwhelm" the senior mark. This factor, considering both Wreal's conceptual strength and Amazon's commercial dominance, weighs heavily for Wreal. Second, regarding the similarity of the marks, the court noted that "FyreTV" and "fireTV" are nearly identical in sound, connotation, and dominant word. Crucially, Amazon's pervasive use of its "amazon" housemark, which would typically dispel confusion in forward-confusion cases, actually aggravates reverse confusion by reinforcing the association of "fireTV" with Amazon, making consumers believe Amazon is the source of "FyreTV." This factor weighed heavily for Wreal. Third, the similarity of the products factor weighed for Wreal. The Court noted that Amazon already sells softcore pornography via fireTV apps and hardcore pornography DVDs on its website, and its direct competitors (Roku, Apple TV) offer hardcore pornography streaming, including FyreTV. A reasonable juror could infer that Amazon, a "do-it-all giant," might "bridge the gap" into dedicated hardcore pornography streaming, leading consumers to attribute both products to a single source. Fourth, the intent factor was also reinterpreted. Adopting the Ninth Circuit's approach for reverse confusion, the Court held that intent is not limited to a specific intent to deceive but includes a general intent to achieve market saturation or culpable disregard of the risk of confusion. Amazon knew of Wreal's mark before launching fireTV and admitted its goal was to prevent customers searching for fireTV from encountering a porn site, which the Court viewed as an intent to "flood the market with advertising in an attempt to lower awareness of Wreal’s similarly named mark." This weighed heavily for Wreal. Finally, on actual confusion, while only two direct instances were identified (a Wreal customer asking "Did you guys just merge with Amazon?" and an Amazon customer inquiring about "adult content" on Amazon "fyreTV"), the Court noted the low bar for proving actual confusion in trademark law, especially considering expert testimony that pornography consumers are less likely to report confusion. Given the totality of circumstances, these instances were sufficient to create a triable issue of fact, favoring Wreal. The survey evidence from both parties, showing low confusion rates, was given little weight, consistent with the circuit's general skepticism toward survey evidence in trademark cases. The Court concluded that, while some factors (similarity of sales outlets and advertising methods) favored Amazon, the overall weight of the modified factors for reverse confusion strongly favored Wreal, making summary judgment inappropriate. The case was reversed and remanded for a jury trial.