SanMedica International et al v. Amazon.com

Filing 130

REDACTED VERSION OF 124 MEMORANDUM DECISION AND ORDER granting in part and denying in part 59 Sealed Motion for partial summary judgment; denying 62 Sealed Motion for partial summary judgment. Signed by Judge David Nuffer on 3/27/15 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

SANMEDICA INTERNATIONAL, LLC, a
Utah limited liability company; WESTERN
HOLDINGS, LLC, a Nevada limited liability
company,
Plaintiffs,

MEMORANDUM DECISION
AND ORDER
FILED UNDER SEAL

v.

AMAZON. COM, INC., a Delaware
corporation,

Case No. 2:13-cv-00169-DN
District Judge David Nuffer

Defendant.

Presently pending are the parties ' cross-motions for summary judgment fil ed on July 2 1,
2014. 1 For the reasons set fo r below, after reviewing the parties' memoranda, the undisputed
facts and the relevant legal authorities, Amazon's motion for summary judgment is hereby
GRANTED in part and DENIED in part, and Plaintiffs' motion for partial summary j udgment is
DENIED. Oral argument is unnecessary. 2

1
Defendant Amazon.com, Inc.'s Motion for Summary Judgment as to Liability and Damages ("Amazon's MSJ"),
docket no. 59, filed July 21, 2014 (filed under seal). See also Redacted-Nonconfidential Defendant Amazon.com,
Inc.'s Motion for Summary Judgment as to Liability and Damages, docket no. 63, filed July 22, 2014; Plaintiffs '
Motion and Supporting Memorandum for Partial Summary Judgment Regarding Liability and for Injunction
Pursuant to the Utah Truth in Advertising Act and the Lanham Action ("Plaintiffs' MPSJ"), docket no. 62, filed July
21, 2014 (filed under seal). See also Redacted-Nonconfidential Plaintiffs' Motion and Supporting Memorandum for
Partial Summary Judgment Regarding Liability and for Injunction Pursuant to the Utah Truth in Advertising Act and
the Lanham Act, docket no. 69, filed July 25, 2014.
2

See DUCivR 7- l(t).

BACKGROUND ............................................................................................................................ 2
STANDARD OF REVIEW ............................................................................................................ 4
UNDISPUTED MATERIAL FACTS ............................................................................................ 4
ANALYSIS ................................................................................................ ..................................... 9
Summary Judgment on Plaintiffs' Trademark Infringement Claim under§ 32 of the
Lanham Act, codified as 15 U.S.C § 1114 is Inappropriate ................................... 9
The Degree ofSimilarity of the Marks .................................................................. 12
The Intent of the Alleged Infringer in Adopting its Mark ..................................... 12
Evidence ofActual Confusion .......................................... ..................................... 13
The Relation in Use and the Manner of Marketing Between the Goods or
Services Marketed by the Competing Parties ............................... ............ 14
The Degree of Care Likely to be Exercised by Purchasers .................................. 14
The Strength or Weakness of the Marks ............................................................... 15
Other Relevant Factors ......................................................................................... 16
Summary Judgment is Granted in Favor of Amazon as to Plaintiffs ' Trademark
Infringement Claim under§ 43(a) ofthe Lanham Act, codified as 15 USC§
1125(a) .................................................................................................................. 17
Summary Judgment on Plaintiffs Utah Truth in Advertising Act Claim is
Inappropriate ......................................................................................................... 22
Utah Code Ann. § 13-11 a-3(J)(i) .......................................................................... 23
Utah Code Ann. § 13-11 a-3(1)(t) .......................................................................... 25
Plaintiffs Are Not Entitled To Summary Judgment for a Permanent Injunction .............. 25
Injunctive Relief Under§ 1114(J)(a) of the Lanham Act ..................................... 26
Injunctive Relief Under UTAA ............................................................... ............... 27
Amazon is Entitled to Summary Judgment that Statutory Damages Under the UTAA
Are Limited to a Single Award of$2,000 ............................................................. 27
ORDER ...................................................................... ................................................................... 30

BACKGROUND
Plaintiff Western Holdings, LLC ("Western Holdings") owns the trademark for
SeroVital, a dietary supplement that promotes the human body's natural production of serum
human growth hormone levels. Plaintiff SanMedica International, LLC ("SanMedica") has a
license to use the SeroVital trademark. Starting November 15, 2012, SanMedica offered
SeroVital for sale on Amazon.com ("Amazon"). On or about December 12, 2012, Amazon
removed the SeroVital product from the Amazon marketplace for a policy violation. Although
SeroVital was no longer available for purchase on the Amazon marketplace, Amazon's internal
bidding system (Hydra) continued to bid on the word SeroVital with search engines, such as

2

Google, Bing, and Yahoo. Consequently, Hydra generated and published ads on the search
engines when consumers searched for SeroVital. The sponsored ads represented that SeroVital
could be purchased at Amazon. These sponsored ads continued to appear through September 9,
2013.
On March 6, 2013, Plaintiffs filed a Complaint3 against Amazon. Plaintiffs subsequently
filed an Amended Complaint4 on September 3, 2013, which sets forth causes of action for: (1)
trademark infringement under the Lanham Act; (2) unfair competition based on false
representation in violation of Lanham Act 15 U.S .C. § 1125(a)(l )(A); (3) unjust enrichment; ( 4)
injunctive relief; (5) declaratory relief; and (6) violation of the Utah Truth in Advertising Act 5
("UTAA").
Amazon has moved for summary judgment on Plaintiffs' trademark infringement, unfair
competition based on false representation, unjust enrichment, and UTAA claims.6 Amazon
contends that summary judgment should be granted in its favor on the above claims because
Plaintiffs cannot show any likelihood of confusion resulting from Amazon 's use of the SeroVital
mark.7 "Alternatively, Amazon asks the Court to enter judgment in favor of Amazon on
Plaintiffs' claim to actual damages, and also decide the maximum allowable statutory damages
under the ... [UTAA]." 8 Plaintiffs ' cross-move for partial summary judgment on their claims for
trademark infringement, unfair competition based on false representation, violation of the
UTAA, and injunctive relief. 9
3

Complaint and Jury Demand, docket no. 1, filed March 6, 2013.

4

Amended Complaint and Jury Demand, docket no. 31, filed September 3, 2013.

5

Utah Code Ann.§ 13-1la-l, et al.

6

Amazon's MSJ at 2.

7

/d

8

!d

9

Plaintiffs' MPSJ at 2.

3

STANDARD OF REVIEW
"The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law." 10
When analyzing a motion for summary judgment, the court must "view the evidence and draw
all reasonable inferences therefrom in the light most favorable to the party opposing summary
judgment." 11 However, "the nonmoving party must present more than a scintilla of evidence in
favor of his position." 12 A dispute is genuine only "if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party." 13 "The fact that the parties have filed crossmotions for summary judgment does not affect the applicable standard." 14
UNDISPUTED MATERIAL FACTS
The following material facts are mostly undisputed in the briefing, but where facts
offered were disputed, those disputes have been removed by editing and only the undisputed
portions remain. Some minor edits and consolidations have been made to improve readabi lity
without changing meaning.
1.

Western Holdings is a limited liability company organized and existing under the

laws of the state ofNevada. Western Holdings owns the trademark for SeroVital. 15

°Fed. R. Civ. P. 56(a).

1

11

Mathews v. Denver Newspaper Agency LLP, 649 F.3d 1199, 1204 (lOth Cir. 2011) (citation and internal
quotations omitted).
12

Ford v. Pryor, 552 F.3d 1174, 1178 (lOth Cir. 2008)(citations omitted).

13

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,248 (1986); see also Kerber v. Qwest Group Life Ins. Plan, 647
F.3d 950, 959 (1Oth Cir. 2011 ).
14

Ditty v. CheckRite, Ltd., Inc., 973 F. Supp. 1320, 1326 (D. Utah 1997) (citing Heublein, Inc. v. United States, 996
F.2d 1455, 1461 (2d Cir. 1993)).
15
Plaintiffs' MPSJ at 9; Defendant Amazon. com, Inc.'s Opposition to Plaintiffs' Motion for Partial Summary
Judgment and for Injunctive Relief at 12 ("Amazon's Opposition"), docket no. 83, filed August 21 , 2014 (filed
under seal).

4

2.

The SeroVital trademark was first used in interstate commerce on September 14,

2012. An application for registration of that trademark was filed in the United States Patent and
Trademark Office (the "USPTO") on March 5, 2012. The trademark was published for
opposition by the USPTO on December 18,2012. And on May 21,2013, the USPTO issued a
certificate of trademark registration to Western for SeroVital, Reg. No. 4,339,758. 16
3.

Western Holding licenses the use of its trademark to SanMedica. 17

4.

SanMedica is a limited liability company organized and existing under the laws of

the State of Utah, with its principal place of business in Salt Lake City, Utah. 18
5.

Hydra is:
Amazon's internal bidding system ... that automatically generates and
evaluates · advertisements on search
·
such as
Yahoo or

I

16

Plaintiffs' MPSJ at 9; Amazon's Opposition at 13.

17

Plaintiffs' MPSJ at 9; Amazon's Opposition at 12. See also Nunc Pro Tunc Licensing Agreement, docket no. 6 1-

±·
18

Plaintiffs' MPSJ at 9; Amazon's Opposition at 13.

19

Plaintiffs' MPSJ at 14; Amazon's Opposition at 18- 19. See also docket no. 62-10.

5

6.

Amazon (AMZNOOOOOO 15) describes the four components of a

sponsored links ad generated by Hydra as:

7.

SeroVital was offered for sale on the Amazon Marketplace on or about November

15, 2012.
8.

Hydra identified the word "SeroVital" beginning on or about November 15, 2012

.. . and consequently, Hydra bid on the word Sero Vital with Google, Bing, and Yahoo.
Thereafter, Hydra generated and published

21

ads when consumers searched for "SeroVital" or

"SeroVital hgh" on Google, Bing, and Yahoo, with the following language:

22

Serovital at Amazon.com- Qualified orders over $25 ship
free. Buy Serovital at Amazon!
www.Amazon.com
and

20

Plaintiffs' MPSJ at IS; Amazon's Opposition at 19-20. See also docket no. 62-1 0.

21

There is a dispute among the parties whether the ads were "customized". "Sponsored" is a better description.
Hydra bids on certain keywords, and when the keyword is matched to a user's search query, an ad is generated with
the keyword and a sponsored ad is shown in the search results.
22

Plaintiffs' MPSJ at 10-ll; Amazon's Opposition at 15.

6

Serovital-h~h

at Amazon- Qualified orders over $25 ship
fre·e. Buy Serovital-hgh at Amazon!
www.Amazon.com

9.

Hydra's [sponsored] ads ... claiming SeroVital was for sale on Amazon were

consistent with the four components described in AMZN00000015, and helped Amazon attract
customers to its website. 23
I 0.

Amazon removed the SeroVital product from the Amazon Marketplace for a

policy violation on or about December 12, 2012. 24
11.

Amazon "stop-listed" the keyword "SeroVital" from use in its sponsored ads

published by search engines on desktop computers on March 15, 2013. 25 But some ads continued
to appear through September 9, 2013. 26
12.

From December 13, 2012 through at least September 9, 2013 (''Advertising

Period"), Amazon 's sponsored ads [for SeroVital] continued to be published when consumers
searched for "Sero Vital" or "Sero Vital hgh" on Google, Yahoo, and Bing?7
13.
There were -

During the Advertising Period, Hydra generated over -

clicks on the sponsored ads. Of those who entered Amazon's store during the

Advertising Period, .
14.

sponsored ads.

purchased some product other than SeroVital. 28

Each ... ad ... represented that SeroVital was for sale and could be purchased on

Amazon. But when a consumer clicked on the sponsored ad, it took him or her to a landing page
on Amazon.com that contained offers for sale of other products, but not SeroVital. Other
23

Plaintiffs' MPSJ at 16; Amazon's Opposition at 20- 21.

24

Amazon's Opposition at 23; Plaintiffs' Repl y in Support of . . . [Plaintiffs' MPSJ] at 34 ("Plaintiffs' Reply"),
docket no. 101, filed September 15,2014 (filed under seal).

25

Plaintiffs' MPSJ at 13; Amazon's Opposition at 18.

26

Plaintiffs' MPSJ at 16; Amazon's Opposition at 20- 21.

27

Plaintiffs' MPSJ at I I; Amazon's Opposition at 16.

28

Plaintiffs' MPSJ at 11- 12; Amazon's Opposition at 16.

7

products included, at times, Original Forumula GH3 , AminoGH, Secratatropin HGH, Genf20
Plus, Controlled Labs Blue Growth, Gerovital H3 Evolution, and HGH Complex. 29
15.

During the period when Amazon ran the accused ads, but SeroVital was

unavailable in the Amazon Marketplace, users who clicked on the accused ads were taken to
pages at Amazon.com that did not show SeroVital. Rather, other products appeared, which were
clearly labeled and were not represented by Amazon or third-party sellers to be SeroVital. 30
16.

There is no evidence of actual confusion resulting from Amazon's use of the

SEROVITAL mark. 31
17.

In all ads in which it used the SEROVITAL mark, ... [it was] clear that the ad

was placed by Amazon, and the stated URL disclosed that clicking on the ad would take the user
to Amazon.com. 32
18.

On January 28, 2013, SanMedica sent a written notice to the Registered Agent for

Amazon.com, Inc. , pursuant to the .. . [UTAA], 33 giving notice to Amazon that it was in
violation of the provisions of the UTAA by using deceptive, misleading, and false advertising
practices relating to the purported sale of SeroVital on Amazon's website. As required by the
UTAA, Plaintiffs notice demanded that Amazon, within I 0 days of receipt of said notice : (a)
remove all advertisements on the internet that advertise, offer, state, or imply in any way that
Amazon carries or offers for sale SeroVtal; (b) promulgate a correction notice with the same
search engine providers containing the deceptive advertisements that states that SeroVital is not

29

Plaintiffs' MPSJ at 12-13; Amazon's Opposition at 16- 17.

30

Amazon's Opposition at 23; Plaintiffs' Reply at 34.

31

Amazon's Opposition at 24; Plaintiffs' Reply at 34-35.

32

Amazon's Opposition at 24; Plaintiffs' Reply at 35.

33

Utah Code Ann. §13-I la-4( 5).

8

offered for sale by Amazon; and (c) send written proof of its compliance with the demand to
Plaintiffs within the 10-day period.
19.

34

Amazon has failed to provide proof that it has complied in a timely manner with

the demands of the notice. And after the filing of the original complaint on March 6, 2013,
Amazon continued for approximately six months, until September 2013, to ... advertise
SeroVital for sale ... by using that trademark in advertisements placed through search engine
providers. 35
20.

After Amazon removed SeroVital from Amazon.com, Amazon sold -

in

various goods and services who arrived at Amazon.com by clicking on an accused ad. 36

ANALYSIS
Summary Judgment on Plaintiffs' Trademark Infringement Claim under § 32 of the
Lanham Act, codified as 15 U.S.C § 1114 is Inappropriate
Plaintiffs' first cause of action is for trademark infringement pursuant to § 1114( l )(a) of
the Lanham Act. Section 1114(1 )(a) allows the owner of a registered mark to bring an
infringement action against any person who "use[s] in commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered mark in connection with the sale, offering for sale,
distribution, or advertising of any goods or services on or in connection with which such use is

likely to cause confusion, or to cause mistake, or to deceive.... " 37 In order to establish a claim
oftrademark infringement under§ 1114(1 )(a) of the Lanham Act, four elements must be
established: (1) the mark is valid and legally protected; (2) the mark is owned by the plaintiff; (3)

34

Plaintiffs' NIPSJ at 16; Amazon's Opposition at 21.

35

Plaintiffs' MPSJ at 16; Amazon's Opposition at 21-22.

36

Amazon's Opposition at 24; Plaintiffs' Reply at 35 .

37

15 U .S.C. § 1114( I )(a).

9

the defendant used the trademark in commerce without consent; and (4) defendant's use of the
trademark will create the likelihood of confusion. 38
In the present case, there is no dispute that the mark is valid and legally protected. The
Sero Vital mark is registered with the United States Patent and Trademark Office.
There is also no dispute that Western Holdings is the registered owner of the mark.
The third element requires unauthorized use of the mark in commerce. Amazon contends
that Plaintiffs gave it a license to use the mark when they listed the product for sale on
Amazon.com. 39 Amazon claims that §..1 of the "Amazon Services Business Solutions Agreement
dated November 2, 2012, grant[s] Amazon a 'royalty-free, non-exclusive, worldwide, perpetual,
irrevocable right and license to use' materials and trademark related to product sold on the
Amazon site[.]"40 And "[t]he terms of the license allowed Amazon to use the SeroVital mark in
advertisements unless and until Plaintiffs asked Amazon to discontinue certain uses." 41
Plaintiffs take issue with the document. Plaintiffs argue, among other things, that " [t]here
is no explanation who, if anyone, signed the document, or in what capacity, and for what
product. . .. Thus, there is no evidentiary foundation for its introduction or use." 42
The third element has been met. It is undisputed that on January 28, 2013, Plaintiffs
notified Amazon about the issue and demanded that Amazon discontinue using Plaintiffs'
trademark. Amazon has not shown that it had a license to use the trademark after it was notified
to discontinue the use of the trademark on January 28, 2013.

38

l5U.S.C. § 1114(1 )(a).

39

Amazon's Opposition at 3.

40

ld at 3-4.

41

Id at 4.

42

Plaintiffs' Reply at 6.

10

The only remaining factor to consider is whether Amazon' s use of Plaintiffs' mark likely
caused consumer confusion. "The Lanham Act is intended 'to protect the ability of consumers to
distinguish among competing producers,' not to prevent all unauthorized uses." 43 Consequently,
in order to constitute trademark infringement, the party alleging infringement has the burden of
proving likelihood of confusion from the unauthorized use of the trademark. 44
The Tenth Circuit has recognized three types of confusion: direct confusion, indirect
confusion, and initial interest confusion. 45 The type of confusion alleged by Plaintiffs is initial
interest confusion. 46 "Initial-interest confusion ' results when a consumer seeks a particular
trademark holder's product and instead is lured to the product of a competitor by the competitor's
use of the same or a similar mark. "' 47 "As the name implies, the improper confusion occurs even
if the consumer becomes aware ofthe defendant's actual identity before purchasing the
product." 48 A court, however "cannot simply assume a likelihood of initial interest confusion,
even if it suspects it," as the "proponent of such a theory must prove it." 49 Initial interest
confusion is evaluated according to the six-prong test announced in King of the Mountain Sports
Inc. v. Chrysler Corp. 50 "These factors are not exhaustive. And they should not be applied

43

Uiah Lighthouse Minislrv v. Found.ation fo r Apologetic !nformation and Research. 527 F.3d 1045. 1052 (quoting

Two Pesos v. Taco Cabana. 505 U.S. 763, 774, 112 S. Ct. 2753. 120 L.Ed.2d 6 I 5 ( 1992)).
44

Australian Gold, Inc. v. Hatfield. 436 F.3d 1228. 1238 (lOth Cir. 2006).

45

1-800 Contacts. Inc. v. Lens. com. Inc .. 722 F.3d 1229 ( 10th Cir. 20 13).

46

Plaintiffs' MPSJ at 4 (stating that Plaintiffs were victims of Amazon's unlawful bait advertising).

47

1-800 Contacts. 722 F.3d at 1239 (quoting Australian Gold. 436 F.3d at 1238).

48

!d.

49

Vail Associates. Inc. v. Vend-Tel-Ca.. Ud.. 5 I 6 F.3d 853. 872 (10th Cir. 2008 l; see also Network Automation. i nc.
v. Advanced Svstems Concepts. Inc.. 638 FJd 1137, 1 I 49 (9th Cir. 20 l I ) ("(WJhen we examine initial interest
confusio n, the owner ofthe mark must demonstrate likely confus ion. not mere diversion."); .f..-800 Contacts. 722
F.Supp.2d at 1173 ('"Likelihood of confusion· signifies more than a mere possibility.").
50

185 F.3d I 084. I 089 (1Oth Cir. 1999).

11

mechanically; some factors may carry far more weight than others depending on the
circumstances."

51

The factors are:

(a) the degree of similarity between the marks;
(b) the intent of the alleged infringer in adopting its mark;
(c) evidence of actual confusion;
(d) the relation in use and the manner of marketing between the goods or services
marketed by the competing parties;
(e) the degree of care likely to be exercised by purchasers; and
(f) the strength or weakness of the marks. 52
"Likelihood of confusion is ordinarily a question of fact for the jury, but summary
judgment is appropriate if no reasonable juror could find that such a likelihood exists." 53
Accordingly, the King of the Mountain factors apply to Plaintiffs' trademark infringement claim
and are analyzed separately below.

The Degree ofSimilarity ofthe Marks
Similarity between marks is tested on the levels of sight, sound, and meaning.

54

The issue

in the present case is not that Amazon is using a mat:k of its own which has a strong likeness to
SeroVital, instead, this case concerns the use of Plaintiffs' exact mark in advertisements
sponsored by Amazon. The marks, therefore, are identical. This factor weighs in favor of finding
of likelihood of confusion.

The Intent of the Alleged Infringer in Adopting its Mark
Under this factor, the focus is on "whether defendant[s] had the intent to derive benefit
from the reputation or goodwill of plaintiff[s]. " 55 Amazon argues it had no intent to derive

51

1-800 Contacts. 722 F.3d at 1?39.

52

ld.

53

!d. at 1242; see also 5'ally Beautv Co. , inc. v. Beautyco, !riC.. 304 F.3d 964, 972 (] Oth Cir. 2002l; King ofthe
Mountain, 185 F.3d at 1089 ("Courts retain an important authoritv 'to monitor the outer lim its of substantial
sim ilarity within which a jurv is permitted to make the factua l determ ination whether there is a likelihood of
confusion." (brackets and internal quotation marks omitted)).
54

King ofthe Mountain, I 85 F.3d at 1091 .

55

!d. at 1091- 92 .

12

benefit from the reputation or goodwill of Plaintiffs because the product violated its Drugs, Drug
Paraphernalia & Dietary Supplements policy and Amazon considered the product objectionable
and dangerous. 56 Plaintiffs argue that an inference or a presumption of likelihood of confusion is
established because the mark was not chosen randomly or by accident; instead, Amazon, through
its Hydra program, intentionally chose to create ads representing SeroVital for sale. 57
"Evidence that the alleged infringer chose a mark with the intent to copy, rather than
randomly or by accident, typically supports an inference of likelihood of confusion." 58
"Conversely, if the evidence indicates a defendant did not intend to derive benefit from a
plaintiffs existing mark, this factor weighs against the likelihood of confusion." 59 Accordingly,
"[t)he proper focus under this factor is whether defendant had the intent to derive benefit from
the reputation or goodwill of plaintiff." 60
There is a dispute of fact whether Amazon intended to use the mark after it banned the
sale of SeroVital, and also whether Amazon intended to derive benefit from the reputation or
goodwill from the mark. Accordingly, Amazon's intent is a disputed fact that cannot be
determined as a matter of law.

Evidence ofActual Confusion

It is undisputed that there is no evidence of actual confus ion. 61 This factor weighs against
a finding of likelihood of confusion.

56

Amazon's Opposition 30- 31.

57

Plaintiffs' Reply at 42 (citing Utah Lighthouse .Ministry v. Foundation (or Apologetic Information and Research.
527 F.Jd 1045. 1055 (10th Cir. 2008)).
58

Utah Lighthouse Ministrv. 527 F.3d at I 055.

59

Hear/springs. Inc. v. Hearfspring, Inc.. 143 F.3d 550.556 (lOth Ci r.l 998).

°King ofthe Mountain,

6

61

185 F.3d at ·1090 (internal quotatio n marks and citation omitted).

See Undisputed Material Facts,~ 16.

13

The Relation in Use and the Manner of Marketing Between the Goods or Services Marketed
by the Competing Parties
This fourth factor is generally analyzed by "separately considering (1) the similarity of
products and (2) the similarity in the manner of marketing the products." 62 "'The greater the
similarity between the products .. . the greater the likelihood of confusion. "' 63 The similarity of
the products, to some degree, weighs in Plaintiffs' favor because Amazon offers for sale products
that are somewhat similar to SeroVital. Evidence has been presented that once a consumer
clicked on the SeroVital sponsored ad, the consumer was taken to an Amazon's landing page that
contained offers for sale of products, such as, Original Forumula GH3 , AminoGH, Secratatropin
HGH, Genf20 Plus, Controlled Labs Blue Growth, Gerovital H3 Evolution, and HGH Complex.
As to the similarity in the manner of marketing, both companies market their products
online. Amazon contends that initial interest confusion is unlikely given the context of the
online ads and Amazon 's clear identification as the source of the advertisement. Although
Amazon's sponsored ads identified Amazon as the source of advertisement, the ads stated that
SeroVital was available on Amazon. Therefore, the language ofthe sponsored ads could have
caused initial-interest confusion; that is, consumers being lured to Amazon with the expectation
of SeroVital being available for purchase on the Amazon marketplace. This factor weighs in
Plaintiffs' favor.

The Degree of Care Likely to be Exercised by Purchasers
"A consumer exercising a high degree of care in selecting a product reduces the
likelihood of confusion . .. . The relevant inquiry focuses on the consumer's degree of care

62

Sally Beauty Co., Inc .. 304 F.3d at 974.

63

Universal Money Ctrs .. Inc. v. Am. Tel. & Tel. Co .. 22 F.3d 1527. 1532 (I Oth Cir.). cert. denied. 513 U.S. I 052.
115 S.Ct. 655. 130 L.Ed.2d 558 (1994) (citation omitted).

14

exercised at the time ofpurchase." 64 Amazon argues that purchasers will not be confused
because internet shoppers are sophisticated and "[s]hopping for specialized or costly goodssuch as an expensive dietary supplement that claims to promote the human body's generation of
a powerful substance like human growth hormone- involves a high level of care by
consumers. " 65
Consumers of such a product are likely to exercise a moderate to high degree of care and
deliberate much more about the purchase, which weighs against a finding of likelihood of
confusion. However, having potentially been misled into an initial interest, a potential Sero Vital
consumer may satisfy him or herself that the other related products on Amazon's landing page
are at least as good as the SeroVital product. 66 Amazon 's reputation for helpful
recommendations may work here to its detriment. Amazon 's ad, therefore, may have
impermissibly capitalized on the goodwill associated with the mark. There are triable issues as to
this factor.

The Strength or Weakness ofthe Marks
"To assess the relative strength of a mark, one must consider the two aspects of strength:
(1) 'Conceptual Strength: the placement of the mark on the [distinctiveness or fancifulsuggestive-descriptive] spectrum;' and (2) 'Commercial Strength: the marketplace recognition
value of the mark. "' 67 "Under the conceptual strength prong, the categories, in descending order
of strength, are: fanciful; arbitrary; suggestive; descriptive; and generic." 68 Neither party has
addressed this particular factor. However, it seems that Sero Vital falls under the fanciful mark
64

Sallv Beautv Co .. Inc .. 304 F.3d at 975 .

65

Amazon's Opposition at 27.

66

See docket no. 62-7.

67

King of the Mountain Sports, 185 F.3d at I 093 (quoting 2 McCarthy on Trademarks and Unfai r Competition

§ 11:83 (4th ed.)).
68

!d.

15

definition of a "coined word[ ] that ... [has] been invented or selected for the sole purpose of
functioning as a trademark." 69 Also, it seems likely that the mark has great commercial strength,
as the evidence shows that in less than a one year period, Hydra generated oversponsored ads, which resulted in approximately -

clicks on the sponsored ads.

Other R elevant Factors

"[O]ther factors may be considered, and the weight of any given factor can depend very
much on context."70 1-800 Contacts is instructive in the particular circumstances of this case. 1800 Contacts dealt with initial-interest confusion. The Tenth Circuit applied initial-interest

confusion to the facts of the case:
[A] consumer enters a query for '1-800 Contacts ' on Google; sees a screen
with an ad for Lens.com that is generated because ofLens.com 's purchase
of one of the nine Challenged Keywords; becomes confused about whether
Lens.com is the same source as, or is affi liated with, 1-800; and therefore
clicks on the Lens.com ad to view the site. Lens.com has exploited its use of
1-800's mark to lure the confused consumer to its website. 7
In determining whether Lens.com's keyword activity was likely to lure the confused
consumer to its website, the court focused on the AdWords data evidence which set "an upper
limit on how often consumers really were lured in such fashion." 72 The data revealed "that
initial-interest confusion occurred at most 1.5% of the time[.]"73 The court concluded that such a
low number "cannot support an inference that Lens.com's keyword activity was likely to ' lure(]'
consumers away from 1-800." 74

69

!d.

70

1-800 Contacts. 722 F.3d at 1243.

71

/d. at 1244.

72

/d.

73

!d.

74

!d

16

In the present case, there is similar evidence setting an upper limit on how often
consumers were lured to Amazon's website by clicking on the sponsored ads. It is undisputed
that during the Advertising Period, approximately those, there were approximately -

sponsored ads were generated. Out of

clicks on the sponsored ads. The click to impression rate

of the sponsored ads is approximately

I

percent. This rate sets the "upper limit on how often

consumers really were lured in such a fashion." Amazon contends that of the'clicked on the ads for SeroVital, only.

made any purchase at Amazon.com, a measly

percent." 75 Although consumer purchases constitute .
purchase rate but instead on the
-

I

users that

I

percent, the focus is not on the

percent rate that consumers were lured to Amazon's website.

percent, although a relative small number, is not so insufficient to suggest that there was

no likelihood of confusion.
In weighing the King ofthe Mountain factors above, initial-interest confusion is a close
decision. Though summary judgment is appropriate on the issue of likelihood of confusion in
appropriate cases, this is not such a case. A rational fact-finder could find in favor of either party
on this issue-especially given the uncertainty surrounding the intent and degree of care prongs.
Amazon's and Plaintiffs' cross-motions for summary judgment on Plaintiffs' trademark
infringement claim under § 1114(1 )(a) are DENIED.

Summary Judgment is Granted in Favor of Amazon as to Plaintiffs' Trademark
Infringement Claim under § 43(a) of the Lanham Act, codified as 15 USC § 1125(a)
Section l J?5(a) is a broad federal unfair competition provision. It creates a federal cause
of action against:
(1) Any person who, on or in connection with any goods or services, or any

container for goods, uses in commerce any word, term, name, symbol, or device,
or any combination thereof, or any false designation of origin, false or misleading
description of fact, or false or misleading representation of fact, which75

Amazon's Opposition at 31.

17

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the
affiliation, connection, or association of such person with another person,
or as to the origin, sponsorship, or approval of his or her goods, services,
or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature,
characteristics, qualities, or geographic origin of his or her or another
person's goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is
likely to be damaged by such act. 76
Section 43(a) may be violated by a range of conduct. Plaintiffs style their second cause of
action as an "unfair competition by false representation in violation of Lanham Act 15 U.S.C. §
l 1?5(a)(l )(A)." This subsection is generally referred to as the trademark infringement prong or
false designation of origin theory of recovery.77 In order to establish a claim for trademark
infringement under § ll25(a)( 1)(A), the following elements must be established: (1) that the
plaintiff has a protectable interest in the mark; (2) that the defendant has used 'an identical or
similar mark' in commerce, and (3) that the defendant's use is likely to confuse consumers." 78
Notably, an infringement claim under§ 1125(a)(l)(A) has nearly identical elements to an
infringement claim under § II 14(1 )(a). 79 Although Plaintiffs have specifically designated their
second cause of action under § 1125(a)( I )(A), they instead request summary judgment relief on a
false advertising claim.80 A false advertising claim falls under§ 1125(a)(I)(B) ofthe Lanham
Act. In order to prevail on a false advertising claim, Plaintiffs must proof that

76

15 U.S.C § 1125(a).

77

McCarthy. supra.§ ? 7:13.

78

/-800 Contacts. 722 F.3d at 1.239 (internal quotation marks and citation omitted).

79

ld ("An infri ngement claim under§ [1114(1 )(a)) has nearly identical elements [to § 1125(a)(l )(A)) except that
the registration of a mark [under§ 111 4(1 )(all serves as prima facie evidence ofboth the mark's valid itv and the
registrant's exclusive ri ght to use it in commerce." (internal quotation marks and citation omitted)).

80

Plaintiffs' MPSJ at 30 ("[T]his Court should grant partial summa1y judgment finding Amazon liable for false
advertising under 15 U.S.C. § 1125(a)(l) (20 14).").

18

(1) [Amazon] made a false or misleading description of fact or representation of
fact in a commercial advertisement about [its] own or another's product; (2) the
misrepresentation is material, in that it is likely to influenc.e the purchasing
decision; (3) the misrepresentation actually deceives or has the tendency to
deceive a substantial segment of its audience; (4) [Amazon] placed the false or
misleading statement in interstate commerce; and (5) [Plaintiffs] ha[ve] been or . .
. [are] likely to be injured as a result of the misrepresentation, either by direct
diversion of sales or by a lessening of goodwill associated with its products. 81
Amazon argues that Plaintiffs ' false advertising theory is untimely. "Amazon understood
throughout this litigation that Plaintiffs are only asserting a claim under § 1125(a)(1 )(A)." 82
Amazon contends that "[i]t would be fundamentally unfair to allow Plaintiffs to interject this
new claim at the end of the case, after the close of discovery and after the dispositive motions
cutoff. Amazon would be prejudiced because, among other reasons, it has not had the benefit of
conducting discovery into the bases for this claim." 83 Plaintiffs state that even if they " have not
technically designated their Second Claim for Relief as 'False Advertising' under

§ 1125(a)(1 )(B), Plaintiffs have put Defendant on notice through its pleadings in its Amended
Complaint ... paras. 42 through 47, that Defendant has made false representations likely to
cause confusion stemming from Defendant's unlawful bait advertising."

84

Plaintiffs' allegations in paragraphs 42 through 47 of their Amended Complaint state:
42. Defendant has without authorization, on or in connection with the
promotion and sale of its goods in interstate commerce, made or contributed
to the making of representations of fact that are false and misleading which
are likely to cause confusion, or to cause mistake, or to deceive purchasers
and potential purchasers into believing that Plaintiffs ' product, Sero[V]ital,
is available for purchase from Defendant.
43. Defendant's acts constitute unfair competition and are misleading
representations of facts.

81

Zoller Labs.. LLC v. NBTY Inc.. 1 I 1 P. App'x 978, 982 (1Oth Cir. 2004).

82

Amazon's Opposition at 35.

83

ld at 36.

84

Plaintiffs' Reply at 40.

19

44. Upon information and belief, Defendant's acts of unfair competition and
misrepresentations have led to, among other things, initial interest confusion
in consumers stemming from Defendant's "bait and switch" practices.
45. Upon information and belief, Defendant's acts of unfair competition and
misrepresentations have deceived and, unless restrained, will continue to
deceive the public, including consumers and retailers, and have injured and
unless constrained will continue to injure Plaintiffs and the public,
including consumers and retailers, causing damages to Plaintiffs in an
amount to be determined at trial and other irreparable injury to the goodwill
and reputation of Plaintiff and its product, Sero[V]ital.
46. Upon information and belief, Defendant's acts of unfair competition are
willful, intentional and egregious and make this an exceptional case within
the meaning of 15. U.S.C. §1117(a), entitling Plaintiffs to attorney's fees.
47. Plaintiffs have no adequate remedy at law to compensate them for all
the damages the Defendant's wrongful acts have and will cause. 85
"As a general rule, a plaintiff should not be prevented from pursuing a valid claim just
because .. . [it] did not set forth in the complaint a theory on which . . . [it] could recover,
'provided always that a late shift in the thrust of the case will not prejudice the other party in
maintaining his defense upon the merits." 86 "The purpose of 'fact pleading,' as provided by
Fed.R.Civ.P. 8(a)(2) , is to give the defendant fair notice of the claims against him without
requiring the plaintiff to have every legal theory or fact developed in detail before the complaint
is filed and the parties have opportunity for discovery." 87 Although Amazon contends that it has
not had the benefit of conducting discovery into the bases for the false advertising theory and
will suffer prejudice if Plaintiffs' theory is considered, Amazon does not state what, if any,
additional discovery would be needed and how it might affect the outcome of the pending crossmotions for summary judgment. Prejudice seems particularly unlikely here, as Amazon has

85

Amended Complaint at 11-12.

86

Evans v. McDonald's Corp.. 936 F .2d 1087, 1090 (10th Cir. 199]) (quoting 5 C. Wright & A. Miller, Federal
Practice & Procedure§ 1219 at 194 (1990)).

87

/d. at I091.

20

responded to the merits of Plaintiffs' false advertising claim. Accordingly, Plaintiffs' false
advertising theory will be considered.
Plaintiffs' false advertising claim, however, fai Is on the merits. Specifical ly, Plaintiffs
have failed to present evidence that Amazon's misrepresentation was material- that the
misrepresentation likely influenced consumers purchasing decisions. Failure to establish any
element of a prima face case for false advertising is fatal to Plaintiffs' false advertising claim and
makes it unnecessary to examine the other elements.88 Plaintiffs contend that "the literally false
nature of Amazon's ads do not require a showing ofmateriality." 89 This is incorrect. The Tenth
Circuit has stated that materiality of the misrepresentation is a required element for a false
advettising claim. 90 Plaintiffs also argue that "the advertisements of Amazon were material on
their face."

91

More specifically, Plaintiffs state that "[p)art of the purchaser's decision is where

one purchases the product. People shop Amazon because of the vibrant Marketplace. These
essential facts regarding the nature and reputation of Amazon, and promises of the ad, on their
face are likely to influence the purchasing decisions of consumers." 92
In the present case, Amazon's misrepresentation was that consumers could purchase
Sero Vital on Amazon.com. But when consumers clicked on the sponsored ads, they were taken
to a landing page that did not contain for sale any SeroVital products. Amazon's
misrepresentation thus related to the marketing of the product, that is, the channel through which
a consumer may purchase the product. Amazon's misrepresentation did not discuss the quality or
88

McCarthy, s upra. §§ 27:24 and 27:35.

89

Plaintiffs Reply at 40-41.

90

Zoller Labs., 11.1. F. App'x 978; see also Johnson & Johnson Vision Care. Inc. v. 1-800 Contacts. Inc., 299 F.3d
1242, 1250-51 ( 1 1th Cir. 2002) ("To the extent that the Fifth C ircuit decision marks a c ircuit split. we stand with the
First and Seco nd Cil'cuits. concluding that the plaintiff must establish materiality even when a defendant's
advetiisement has been found literally false.") .
91

Plaintiffs' Reply at 41.

92

!d.

21

32

characteristics of Sero Vital which could potentially affect consumers' purchasing decisions. 93
Under the undisputed facts on this motion, no reasonable jury could find that Amazon's
mi srepresentation likely influenced a consumer's purchasing decision. 94 Because Plaintiffs bear
the burden of proof at trial as to each essential elements of their false advertising claim, and have
failed to present any evidence on the materiality element, Plaintiffs' summary judgment on their
fa lse advertising claim is denied. Summary judgment is appropriate in Amazon's favor as to
Plaintiffs' false advettising claim.
Summary Judgment on Plaintiffs Utah Truth in Advertising Act Claim is Inappropriate

Plaintiffs argue that Amazon has violated the UTAA by using deceptive, misleading, and
false advertising practices relating to the sale of SeroVital on Amazon' s website. The stated
legislative purpose of the UTAA "is to prevent deceptive, misleading, and false advertising
practices and forms in Utah." 95 Further, the UTAA "is to be construed to accomplish that
purpose and not to prohibit any particular form of advertising so long as it is truthful and not
otherwise misleading or deceptive." 96
Plaintiffs bring their UT AA claims under§ 13-1 1a-3(i) and (t) .97 These subsections state,
in relevant part: "Deceptive trade practices occur when, in the course of a person's business,
vocation, or occupation that person: ... (i) advertises goods or services or the price of goods and
services with intent not to sell them as advertised ... or (t) engages in any other conduct which

93

See Johnson & Johnson Vision Care. 299 F.3d at 1250 ("A plaintiff may establish this materialitv requiremen t bv
proving that 'the defendants misrepresented an inherent gualitv o r c haracte ristic of the product."' (quoting Nat'!
Basketball Ass'n v. Motorola. Inc., I 05 F.3d 84 L 855 (2d Cir.l 997) (i nte rnal quotations om itted)).

94

C[ Tovota Motor Sales. U.S.A .. Inc. v. Tabari. 61 0 F.3d 11.71. 1179 (9th Cir.20 I 0) ("[R]easonable. prudent and
experienced internet consumers.... s kip fro m site to s ite, ready to hit the back butto n whenever thev're not satisfied
with a site's contents. T hey f ully expect to find some sites that a ren't what they imagine based on a glance at the
do main name or search engine sum mary.").
95

Utah Code Ann. § 13-1 1a-1.

96

!d.

97

Plaintiffs' MPSJ at 22.

22

similarly creates a likelihood of confusion or a misunderstanding." 98 Plaintiffs seek both
injunctive relief and damages pursuant to the UTAA. Amazon contends that Plaintiffs ' motion
for summary judgment on their UTAA claims must be denied under both subsections.
Utah Code Ann.§ 13-11a-3(l)(i)
Amazon, citing the official comments to the Uniform Deceptive Trade Practices Act
("UDTPA"), claims that subsection (i) "has historically referred to ' bait advertising,' which is 'a
practice by which a seller seeks to attract customers through advertising at low prices products
which he does not intend to sell in more than nominal amounts. "'99 Amazon argues that
''Plaintiffs do not contend that any of Amazon 's advertisements were misleading with respect to
the availability of Sero[V]ital at a certain price." 100 Amazon further states that "subsection (i)
requires intent, yet the evidence in the record demonstrates that what triggered the
advertisements was Plaintiffs' listing of SeroVital for sale on Amazon.com in contravention of
Amazon's policies banning such products." 101 According to Amazon, "[i]t is not and has never
been Amazon's intent to place advertisements for items that it does not offer on its website. " 102
Plaintiffs reply that "the language of the UTAA subsection 3(1 )(i) is not identical to
[section] (9) of the UDTPA" 103 and "rather than referring to a comment from the 1966 UDTPA,
the true intent of the Legislature should be determined from the UTAA's actual language." 104
Plaintiffs argue that "it is undisputed that Amazon repeatedly advertised, through its sponsored

98

Utah Code Ann. § 13- 11a-3(i) and (t).

99

Amazon's Opposition at 39 (citing Uniform Deceptive Trade Practices Act, Official Comment to §§ 2(a)(9) &
( 1966)).

('! 0)
100

Amazon's Opposition at 40.

101

!d.

102 1d.
103

Plaintiffs' Reply at 36.

104

1d. at 37.

23

ads to each individual consumer entering a search on Google, Yahoo, or Bing, that SeroVital was
available for sale on Amazon.com during the [Advertising Period] ... of almost 9 months, when
Amazon had the stated intent not to sell SeroVital as advertised." 105
The UDTPA's comment provides a narrow definition of"bait advertising." The crux of
such advertising is that the offer to sell as contained in the advertisement is not a bona fide effort
to sell the advertised product. Thus, bait advertising describes a range of commercial behaviors
where the initial offer is insincere. The Code of Federal Regulations, Title 16 Commercial
Practices, for example, defines bait advertising as
an alluring but insincere offer to sell a product or service which the advertiser in
truth does not intend or want to sell. Its purpose is to switch consumers from
buying the advertised merchandise, in order to sell something else, usually at a
higher price or on a basis more advantageous to the advertiser. The primary aim
of a bait advertisement is to obtain leads as to persons interested in buying
merchandise of the type so advertised. 106
Accordingly, Amazon's sponsored ads for SeroVital fall within the definition of bait
advertising. With this definition in mind, the remaining issue is whether Amazon advertised
SeroVital "with intent not to sell ... as advertised." Amazon argues that "[i)t is not and has
never been Amazon's intent to place advertisements for items that it does not offer on its
website. When Amazon discovers Hydra has placed an advertisement using a trademark for a
product it does not offer, it removes the trademark from that advertisement." 107 Plaintiffs
contend that Amazon "had the stated intent not to sell SeroVital as advertised." 108 Accordingly,
Amazon's intent to advertise the product after banning the product from its marketplace on
December 13, 20 12 is a disputed material fact that cannot be resolved on summary judgment.

105

I d.

106

16 C.F.R. § 238.0.

107

Amazon's Opposition at 40.

108

Plaintiffs' Reply at 37.

at

37.

24

Amazon's and Plaintiffs' cross-motions for summary judgment on Plaintiffs' UTAA claim under
to§ 13-lla-3CJ)(i) are DEN IED.

Utah Code Ann. § 13-lla-J(l)(t)
Section 13-11 a-3(1 )(t) is the catch-all provision of the UT AA. It states that a deceptive
trade practice occurs when " [a] person engaged in any other conduct which similarly creates a
likelihood of confusion or of misunderstanding." 109 UT AA does not provide a definition of or
the factors to consider in determining "a likelihood of confus ion or of misunderstanding" under
the UTAA. The King of the Mountain factors, used to determine the likelihood of confusion
under the Lanham Act, seem most appropriate under the present circumstances. As the factors
have been discussed above, there is no need to reiterate the previous discussion. Summary
judgment is not appropriate on the issue of the likelihood of confusion based on the present facts
and the King ofthe Mountain factors. Accordingly, Amazon's and Plaintiffs' cross-motions for
summary judgment on Plaintiffs' UTAA claim pursuant to 13-11 a-3(1 )(t) are DENIED.

Plaintiffs Are Not Entitled To Summary Judgment for a Permanent Injunction
Plaintiffs move for a permanent injunction under the Lanham Act and UT AA.
Specifically, "Pia·intiffs request that this Court enjoin Amazon from using its Hydra program
until and unless it is able to verify to the Court that it has el iminated from its program publication
of advertisements about products, particularly those owned by Plaintiffs, that it does not sell on
its website." 110 Amazon contends that a permanent injunction is not warranted because it has
"long ago ceased its use of Plaintiffs' mark." 11 1 Amazon further argues that "Plaintiffs' requested
injunction is overbroad. They seek to enjoin Amazon from using Hydra to generate

1
09

Utah Code Ann. § 13- 1'I a-3( 1)(t).

110

Plaintiffs ' MPSJ at 36.

11 1

Amazon's Opposition at 40.

25

advertisements for any products and in any capacity, whether Amazon sells those products or
not." 11 2
"It is well settled [that] an injunction must be narrowly tailored to remedy the harm
shown." 113 "[A] district court's decision to issue or deny a permanent injunction [is reviewed] for
an abuse of discretion." 114 "A district court abuses its discretion when it issues an arbitrary,
capricious, whimsical, or manifestly unreasonable judgment." 115 Accordingly, whether or not a
permanent injunction is ultimately granted against Amazon, the scope of the injunction must be
narrowly tailored to remedy the harm, if any, suffered by Plaintiffs . Plaintiffs are not entitled to
the broad injunctive relief they have requested.

Injun ctive R elief Under § 1.114(1){a) ofthe Lanham A ct
Under the Lanham Act, injunctive and other equitable relief may be granted to prevent
further violations of a Plaintiffs trademark rights. 116 "For a party to obtain a permanent
injunction, it must prove: (1) actual success on the merits; (2) irreparable harm unless the
injunction is issued; (3) the threatened injury outweighs the harm that the injunction may cause
the opposing party; and ( 4) the injunction, if issued, will not adversely affect the public
interest." 117 At this juncture, the actual success on the merits element for injunctive relief has not
been satisfied. Until the disputed factual matters concerning the likelihood of confusion with
respect to Amazon's use ofPlaintiffs' mark are resolved, a permanent injunction is
inappropriate.

11 /d. at41.
2
113

Garrison v. Baker Hughes Oilfield Operations. T .. 287 F.3d 955. 962 (1Oth Cir. 2002).
nc

114

.John Allan Co. v. Craig Allen Co. L.L. C .. 540 F.3d I 133. 1142 (I Oth Cir. 2008).

115

Id. (guotin!! Prairie Band Potmvatomi Nation v. Wagnon. 476 F.3d 818, 822 (10th Cir. 2007)).
116 15U.S.C.§ 1116(a).
117

Prairie Band Potawatomi Nation v. Wagnon. 4 76 F.3d 818, 822 (I Oth Cir. 2007).

26

Inj unctive R elief Under UTAA
Section 13-1 la-4(2)(a) ofUTAA states: "Any person ... may maintain an action to
enjoin a continuance of any act in violation of this chapter . .. . If, in such action, the court fi nds
that the defendant is violating or has violated any ofthe provisions of this chapter, it shall enjoin
the defendant from continuance of the violation." 118 And "[i]t is not necessary that actual
damages be proven ."

119

Thus, "if a court finds that a defendant is violating or has violated ...

[UTAA], the court is required, by the word 'shall,' to enjoin the defendant from further
violations."

120

Plaintiffs' request for permanent injunction pursuant to UTAA is denied at this

time because fact issues remain concerning Plaintiffs ' entitlement to such relief.

Amazon is E ntitled to Summary Judgment that Statutory Damages Under the UTAA Are
Limited to a Single Award of $2,000
Amazon asks for judgment in its favor on the maximum allowable statutory damages that
can be awarded under the UTAA. 121 Section 13-lla-4(2)(a) states, in relevant part, that "[a]ny
person ... may maintain an action to enjoin a continuance of any act in violation of this chapter
and, if injured by the cou11, for the recovery of damages." Subsection (b) further states that "[i]n
addition to injunctive relief, the plaintiff is entitled to recover from the defendant the amount of
actual damages sustained or $2,000, whichever is greater." 122 Plaintiffs have indicated that they
are pursing statutory damages under UTAA. 123 Plaintiffs argue that "[w]hen subsections (2)(a)
and (2)(b) of§ 13- I 1a-4 are read together, the plain language of the statute allows a plaintiff to
118

Utah Code Ann. § 13- ll a-4(2)(a) (emphasis added).

119

/d § 13-lla-4(2)(a).

120

Proctor & Gamble Co. v. Haugen. 947 F. Supp. 1551, I 555 (D. Utah 1996).

121

Amazon's MSJ at 2.

122

Utah Code Ann. § 13-11 a-4(2)(b ).

123

Plaintiffs' Reply at 42 ("Consequently, Plaintiffs must rely on the remedies of injunctive relief under the Lanham
Act and the UTAA to prevent future violations, and a claim under the UTAA for statutory damages... .").;see also
Plaintiffs' Memorandum in Opposition to Defendant Amazon.com, Inc.'s Motion for Summary Judgment as to
Liability and Damages ("Plaintiffs' Opposition") at 31, docket no. 82, filed August 21 , 20 14 (same).

27

seek injunctive relief and actual or statutory damages fo r any act in violation ofthe statute. Thus,
statutory damages should be awarded for each violation ofthe UTAA."

124

That is, Plaintiffs

interpret the section to allow a finding "that each separate publication of the offending ad and
individual sol icitation constitutes a separate deceptive trade practice, or, at a minimum, a
violation occurs each time an individual consumer clicked on an offending ad in response to
Amazon's individualized solicitation."

125

Plaintiffs contend that "[a)llowing Amazon to continue

to publish customized ads in response to individuals searching for Sero Vital for the sole purpose
of driving more purchasers to its website, in exchange for payment of a mere$ 2,000, one-time
fee, would be the equivalent of'a kind of judicially imposed compulsory license' which wou ld
allow Amazon free use ofthe SeroVital trademark in perpetuity." 126
Amazon argues that "if Plaintiffs have a viable UTAA claim, they are entitled only to a
single statutory damages award of $2,000." 127 The plain language of the statute, according to
Amazon, entitles Plaintiffs to a single award of$2,000 in statutory damages. 128 Amazon cites to

Anderson v. Felsted, 129 as additional support for its interpretation of the UT AA. Anderson dealt
with the Utah Consumer Sales Practices Act ("UCSPA") which contains language simi lar to the
section at issue in this case. Section 13-11- 19(2) of the UCSPA reads: "A consumer who suffers
loss as a result of a violation of this chapter may recover . .. actual damages or $2,000,
whichever is greater, plus court costs." Anderson interpreted the provision to create "the
opportunity for a consumer to recover what is essentially a civ i I penalty in the amount of $2000
124

Plaintiffs' Opposition at 33-34.

125

ld at 36.
/d.

126
127

Defendant Amazon. com, Inc.'s Reply in Support of its Motion for Summary Judgment as to Liability and
Damages ("Amazon's Reply") at 2, docket no. I 00, filed September 15, 2014.
128

ld. at 9.

129

2006 UT App 188. 137 P.3d I.

28

where the consumer's actual damages may otherwise be de minimis, speculative, or too difficult
to prove[.]" 130 Amazon also points out that other provisions of Chapter 13 of the Utah Code
specifically include the "per violation" or "for each violation" language which is missing from
the UT AA and therefore the omission should be presumed to be purposeful by the Utah
Legislature.

131

As for Plaintiffs' contention that a single award of $2,000 would amount to a

judicially imposed compulsory license, Amazon argues that no such compulsory license could
occur when the $2,000 single payment is coupled with a right to injunctive relief to stop any
further violations.

132

"It is well settled that when faced with a question of statutory interpretation, 'our primary
goal is to evince the true intent and purpose of the Legislature.'"

133

"The best evidence of the

legislature's intent is the plain language of the statute itself." 134 Utah courts "presume[ ] that the
expression of one [term] should be interpreted as the exclusion of another." 135 Utah courts
"therefore seek to give effect to omissions in statutory language by presuming all omissions to be
purposefu1." 136 The plain meaning ofthe provision at issue in the present case grants a plaintiff
the opportunity to elect either to prove actual damages sustained, or to claim a statutory damage
award of $2,000. There is no indication that the Utah Legislature intended to allow an award of
statutory damages on a per violation basis. It is reasonable to assume that the Utah Legislature
chose to set a cap on statutory damages while allowing unlimited recovery of actual damages. If

130

Anderson. 2006 UT App 188. 1! 14.

131

Amazon's MSJ at 33 .

132

Amazon's Reply at 9-10.

Marion Energy. Inc. v. KFJ Ranch P~~hip. 20 I 'I UT 50. ' 14. 267 P.3d 863 (quoting Salt Lake Cnty. v. Holliday
Water Co., 2010 UT 45, ~ 27, 234 P.3d 11 05).
133

134

ld

135

!d. (internal quotat ion marks and citation o mi tted).

136

!d.

29

an aggrieved party believes that statutory damages are not adequate, that party may seek to prove
actual damages. Moreover, Amazon is correct that a single award of$2,000 would not amount to
a judicially imposed compulsory license, because the aggrieved party would also be entitled to
injunctive relief of any further violations. Finally, this interpretation seems appropriate given that
an aggrieved party, if meritorious on its UTAA claim, would not only be entitled to injunctive
reli ef, actual or statutory damages, but would also be entitled to attorneys' fees and other costs,
and corrective advertising.

137

Accordingly, if Plaintiffs ultimately prevail on their UTAA claim,

they will be entitled to a single award of $2,000 in statutory damages.

ORDER
IT IS HEREBY ORDERED that Amazon's motion for summary judgment 138 is
GRANTED IN PART AND DEN IED IN PART.
I) With respect to Plaintiffs' claims for trademark infringement pursuant to 15 U.S .C. §
1114 and violations ofUTAA, Amazon's motion is DENIED;
2) Although Amazon moved for summary judgment on Plaintiffs ' unjust enrichment
claim, its briefing did not address this claim. Under Federal Rule of Civil Procedure
56, the moving party has the burden of establishing that no genuine issues of material
fact exist with respect to each claim for which the movant seeks summary judgment.
Amazon has failed to meet its burden on summary judgment with respect to this
claim. Accordingly, Amazon's motion for summary judgment on Plaintiffs' unjust
enrichment claim is DENIED;

137

See Utah Code Ann. § 13-11 a-4(2)(c) ("Costs shall be allowed to the prevailing party unless t he court otherwise
directs. The court shall award attornevs' fees to t he prevailing party.""); see also § 13-11 a-4(3) ("The court may
order the defendant to promulgate corrective advertising bv the same media and wit h the same distri bution and
frequency as the adve•tising found to violate this chapter.").
138

Docket no. 59.

30

3) Amazon is entitled to summary judgment on Plaintiffs' false advertising claim
pursuant to 15 U.S.C. § ll25(a);
4) Amazon is entitled to summary judgment that statutory damages under the UTAA is

limited to a single award of $2,000.

IT IS FURTHER ORDERED that Plaintiffs' motion for partial summary judgment is
DENIED. 139
Within fourteen days, the parties shall meet and confer and email to
[e-mail] a redacted version of this document that may be fi led on the publ ic
record. The redacted copy shall be a text-based PDF document.
Dated March 27, 2015.

B~:rr

~

David Nuffer
United States District Judge

139

Docket no. 62.

31