In the realm of business, the significance of Goodwill cannot be overstated as a company’s value appreciates with a positive reputation. Customers associate the goodwill of a company with its value, making it an essential factor. A trademark, serving as a symbol of goodwill, derives its value from the perception of the public who consistently choose products and services associated with the trademark. Recently, a division-bench of the Delhi High court overruled the decision of a single-judge bench of Justice Pratibha M. Singh concluding that the use of a registered trademark as a keyword constitutes trademark infringement. The petition was initially filed by MakeMyTrip (India) Private Limited, one of the largest travel companies in India, against Google LLC and its Ads Program, which is at the center of the whole conundrum
UNDERSTANDING THE FACTS
The Ads Programme (formerly Google AdWords) is a Google-managed platform allowing advertisers to create and display online ads for their websites. This allows them to promote their product by generating higher-traffic on their websites. These ads appear on the first page of the Search Engine Results Page (SERP). The Google Ads Program features sponsored ads in response to search queries, utilizing auctioned keywords. Advertisers use these keywords as triggers for their campaigns, and Google is compensated for each click on a sponsored link leading to the advertiser’s landing page. Hence, keywords hold certain economic value and can be helpful for a business in increasing its consumer base. MIPL, the complainant, owns trademarks such as ‘MakeMyTrip’ and ‘MMT.’ It alleged that the use of these trademarks as keywords in Google Ads by Booking.com, resulting in the display of links/ads, constitutes trademark infringement under Section 29. It is aggrieved by Booking.com bidding for its trademarks as keywords for displaying advertisements, asserting that such actions constitute trademark infringement.
MAIN ISSUE
The main question before the bench was whether the use of trademarks as keywords would amount to infringement under the Trademarks Act, 1999.
TRACING THE CASE
Initially, a single-judge bench of the high court, based on Justice V. Kameshwar Rao’s observations in DRS Logistics (P) Ltd. v. GOOGLE India (P) Ltd., 2021 SCC OnLine Del 5767, concluded that employing a registered trademark as a keyword amounts to trademark infringement. The observation highlighted Google’s utilization of MIPL’s goodwill, allowing a competitor to book MIPL’s trademarks as keywords.
In the case of DRS Logistics Pvt Ltd & Others vs Google India Pvt Ltd & Others (CS (Comm) 1/2017), the Plaintiff sought an injunction against Google and third parties, preventing them from using the registered trademark as a keyword in Google ads. The Court held that, even if assumed to be invisible, the keyword directed internet traffic to the competitor’s/advertiser’s website, causing confusion among the general public about the webpage’s origin. Therefore, it was held that Google had a responsibility to verify that the chosen keyword by an advertiser was not a trademark, and even if it was, to ensure that it had been properly licensed or assigned. Subsequently, in an appeal challenging this judgment, the Court concluded that using a trademark as a keyword for displaying advertisements constituted the use of the trademark in advertising, falling under the purview of Section 29(6) of the Act. Additionally, the Court examined the fundamental functions of a trademark and sided with Google, asserting that it did not find anything inherently unlawful in Google’s use of trademarks as keywords, as long as there was no confusion regarding the association or relevance of the links or ads displayed to DRS. In the absence of any likelihood of confusion, DRS’s complaint would not be legally actionable under Section 29(2) of the Trademarks Act. The court also went on to observe that “the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous”. The user may be looking for reviews of the trademark owner’s products, or even looking at competitors who offer similar goods or services. Balancing the various competing interests at play, the Court rejects the contention that the “Trademarks Act grants the proprietor of the trademark monopoly over the SERP yielded by a search query that contains the trademark”.
ARGUMENTS AND JUDGMENT
Coming back to the case in discussion, aggrieved by the decision of the single-bench, parties filed an appeal against it. MIPL contended that Booking.com also bids for MIPL’s trademarks as keywords and that Booking.com’s advertisements or links should not be visible as sponsored links on the SERP. This contention was rejected on the ground that an internet user is not likely to be misled into believing that the services offered by Booking.com are those of MIPL as it is a well-known and popular platform. Therefore, the order suggests that there is a potential for an individual or organization to pay a cost to associate themselves with a well-known brand, yet this behavior would not be deemed as trademark infringement.
The court, while reiterating that all the three conditions mentioned in clauses (a) (b) and (c) must be met for the proprietor of the registered trademark to bring an infringement suit, also held that it was not violative of Section 29 (4) because the court had erred in applying the section by not considering whether the conditions as specified under Clause (b) of Sub-section (4) of Section 29. The bench relied on the decision of the Supreme Court in the case of Renaissance Hotel Holdings Inc. v. B. Vijaya Sai and Ors. Section 29(4) of the Act addresses a scenario where an accused trademark is the same or similar to a registered trademark but is used for goods or services that are not alike. While Section 29(2) deals with situations where the trademarks and covered goods are identical or similar, Section 29(4) pertains to cases where the trademarks are identical but the goods or services are dissimilar to those for which the trademark is registered. Hence, because the services offered by Booking.com are similar to the services covered by MIPL’s trademarks, section 29 (4) will not be applicable. The applicability of section 29 (2) was not examined because the single judge had not found the use of MIPL’s trademarks as infringing use under Section 29(2) of the Trade Marks Act
The court also rejected the argument that section 29 (8) was infringed. Relying on Google LLC v. DRS Logistics (P.) Ltd. and Ors , the bench reiterated that the use of trademarks as keywords by competitors, absent any confusion or deceit, does not per se amount to infringing use.
Section 29(7) was also held to be inapplicable. This provision pertains to applying a registered trademark to material intended for labeling, packaging, business papers, or advertising goods or services. The argument that using keywords in the virtual realm is equivalent to applying the trademark in Google Ad Program software was dismissed. This is because neither Google nor the advertiser physically applies the trademark to any material for labeling, packaging, or business papers.
CONCLUSION
This ruling is of great significance as it adds substantially to the legal principles governing trademark rights in India. It builds upon the established standard in the country, where the evaluation for infringement centers on determining if an average consumer is likely to be confused between two entities, particularly when navigating a website under the impression that it is the intended destination. The judgment now allows a third party to purchase ads linked to a keyword, as long as the business nature of the third party aligns with that of the keyword proprietor, and both parties have distinct reputations and informed customer bases capable of recognizing the differences between the two companies.
BY: AYUSH GUPTA, STUDENT OF LAW, NLU-DELHI
DUCTUS EDGE 