IP Law Daily, TRADEMARK—W.D. Wash.: Utah ad network could have participated in scheme to misuse Amazon brand, (Oct 21, 2020)

By Thomas Long, J.D.

Amazon’s allegations put the network and its principals on notice of contributory trademark infringement claims raised against them, and the defendants had sufficient contacts with Washington to be subject to jurisdiction.

Operators of a Utah-based online advertising network that allegedly took part in a scheme to use a website falsely branded with Amazon’s trademarks to deceive customers into purchasing services from other parties could be liable for contributory trademark infringement, the federal district court in Seattle has decided. The ad network and its employees allegedly took actions to drive web users and recipients of telemarketing phone calls to the fake Amazon site, with knowledge that the operators of the site were not associated with Amazon and were violating Amazon’s trademark rights. Amazon’s complaint was adequately pleaded to withstand a motion to dismiss. The court also determined that personal jurisdiction existed against the defendants in Washington State, based on the purposeful direction of activities to residents of that state (Amazon.com, Inc. v. Oron, October 20, 2020, Martinez, R.).

According to Amazon’s complaint, Cash Network LLC, and its two part-owners Rasheed Ali and Peter Bradford (the "Cash Network Defendants"), operated an online advertising network. Defendants Roy Oron, his business partner Maayan Marzan, and their company Clickomy Ltd. (the "Oron Defendants") allegedly paid Cash Network to send web traffic to a site that used Amazon’s brand to deceive consumers into purchasing the Oron Defendants’ services. The Cash Network Defendants engaged affiliate marketers to publish ads—including prerecorded voicemail messages—encouraging people to click on links or visit websites. People who responded to the ads were redirected to domains controlled by Cash Network, which then sent them to the Oron Defendants’ Amazon-branded webpage. That page purported to offer a "Work at Home Opportunity With Amazon" to those who bought a "kit" from the Oron Defendants. Clicking on any link on that page resulted in being taken to yet another webpage, which offered the Oron Defendants’ services for sale. Amazon asserted that the two groups of defendants worked closely together in created the content of the fake Amazon-branded site.

Amazon accused the Cash Network Defendants of engaging in contributory trademark infringement by provided services to Oron, Marzan, and Clickomy with knowledge that the services were being used to violate Amazon’s trademark rights. Amazon also alleged that these defendants directly monitored and controlled the instrumentality the Oron Defendants used for the violations.

Personal jurisdiction. The Cash Network Defendants raised a personal jurisdiction challenge, pointing out that neither Ali nor Bradford resided in Washington State, and Cash Network LLC had its principal place of business in Murray, Utah. They asserted that their employees worked at the Utah office or remotely from North Carolina.

Amazon contended that personal jurisdiction existed in in the Western District of Washington because the Cash Network Defendants directed their efforts at Washington State when they "used a Washington-based web service provider, employed a Washington-based employee, and paid an affiliate marketer to send deceptive advertisements to over a million Washington phone numbers." The Amazon-branded site incorporated visitors’ physical locations based on their IP addresses, which Amazon argued led to the targeting of Washington State residents with references to their locality.

Resolving disputed facts in favor of Amazon, as the nonmovant, the court found that Amazon’s allegations connecting the Cash Network Defendants with the alleged scheme made a prima facie showing of personal jurisdiction. "Amazon has presented facts, the result of significant investigation, which tend to show that each of these Defendants was in control of businesses and websites directly affiliated with this scheme or directed individuals or businesses in how to conduct this scheme," the court said. "There is prima face evidence that this scheme targeted individuals in all 50 states, including this one." Amazon’s causes of action "undeniably relate" to the Cash Network Defendants alleged forum-related activities, the court concluded.

Contributory liability. The Cash Network Defendants also moved to dismiss the contributory infringement claims as inadequately pleaded. The court denied the motion, holding that Amazon’s claims were plausible on their face and contained sufficiently detailed allegations to meet notice-pleading standards. In the court’s view, Amazon not only adequately alleged that these defendants "continued to supply services to one who they knew was engaging in trademark infringement or false advertising," but also attached email exhibits appearing to support the allegations. The defendants discussed the fake Amazon "advertorial" by name, and the court deemed it plausible that they knew the companies they were working with were not legitimately connected to Amazon. Amazon also alleged that Cash Network directly controlled the distribution and marketing of the Oron Defendants’ infringing website. These allegations were sufficient to withstand a motion on the pleadings.

This case is No. 2:19-cv-00523-RSM.

Attorneys: James Harlan Wendell (Davis Wright Tremaine LLP) for Amazon.com, Inc. Roy Oron, pro se.

Companies: Amazon.com, Inc.; Cash Network LLC

Cases: TechnologyInternet Trademark GCNNews WashingtonNews