By Prachi Jain and Ayush Kumar
In this post, Prachi Jain and Ayush Kumar, third year law students at Dr. Ram Manohar Lohiya National Law University, Lucknow have discussed and analysed the case of MakeMyTrip India Private Limited v. Booking.com B. V. & Ors. In doing so, the authors have delved into the complexities involved in a competitor’s use of a registered trademark as a keyword in the Google Ads program and presented arguments from both side of the trademark owner and against.
Introduction
A trademark infringement is said to occur when a party uses a mark that is identical/similar to another party’s mark, thereby creating a possibility that a consumer would get confused as to the source of the goods/services and inadvertently patronize the wrong merchant.[1] Now, what happens when the “use” of that mark is invisible to the consumer’s eye? Recently, the Delhi High Court had to face a similar question as to whether the use of a company’s trademark as keywords by anyone through the Google Ads Program would constitute infringement under the Trademarks Act, 1999 (the “Act”).
MakeMyTrip India (the “Plaintiff”) filed a lawsuit against Booking.com (the “Defendant”) in response to the Defendant’s use of the Plaintiff’s registered trademark as a keyword in the Google Ads program for promoting its services as advertisements when search results are published on Google. This is certainly not a first of a kind case as litigations against Google regarding its keyword policy are steadily piling up in courts across the country, the notable ones being the cases of upGrad v. Scaler, Make My Trip (India) Private v. Happy Easy Go India Private and DRS Logistics (P) Ltd & Ors. v. Google India Pvt. Ltd (“DRS Logistics”).
While this article shall primarily analyse the present case of MakeMyTrip India Private Limited v. Booking.com B. V. & Ors., in doing so, it shall also delve into the complexities involved in a competitor’s use of a registered trademark as a keyword in the Google Ads program and showcase arguments from both sides – for the trademark owner and against.
What is the Google Ads program?
The Google Ads program works in a way wherein companies can bid for keywords that ultimately match the phrases/words that users usually search for. Keywords are merely words or phrases that assist in determining when and where a specific ad can appear. An advertiser can choose keywords that, when put into a search engine by a user, will result in the advertiser’s advertisement being displayed as a sponsored link.[2] For example, if a person wants to book a hotel and searches for ‘make my trip’ in the Google search box, the likely results would be websites such as Booking.com if it has the highest bid for such a term that is already a registered trademark of another company (in this case, ‘MakeMyTrip’).
For instance: On typing “booking.com” in the search bar, its website appears as the first result along with a suffix “Ad” next to it because it probably placed the highest bid for its own trademark.
What were the Plaintiff’s Contentions?
No trademark owner would want an online consumer to be mistakenly led to believe that another company with a confusingly similar name is in any way associated with the trademark owner’s goods or services. On detecting similar activity, MakeMyTrip filed a suit for permanent injunction before the Delhi HC. Their contention was that Booking.com placed their bid for the keyword ‘MakeMyTrip’ to ensure that its website appeared in the top three search results when someone searched for ‘MakeMyTrip’ on Google. Hence, this would be a violation of Section 29(6)(d), 29(7), 29(8), and 29(9) of the Act, which all deal with infringement of trademarks.
What were the Defendant’s contentions?
The Defendant, on the other hand, contended that there existed a strategic partnership between the Parties that removed the keyword bidding restriction. It relied on the Guess judgment, a landmark European Commission decision that stated that competitors might use a trademark as a keyword in the Google Ads Program. Further, they argued that usage of a trademark as a keyword not amounting to infringement was an internationally accepted position in various countries, some of which are the US, South Africa, and Canada.
What were the issues before the Court?
The court was faced with three questions:
1. Whether the use of keywords that are registered trademarks would amount to infringement?
2. Whether this invisible use of the mark constitutes misrepresentation as a matter of principle?
3. Should the trademark owner continue to make investments in Google Ads to promote their own business when Google allows non-proprietors also to bid for such registered trademarks as a keyword?
What did the Court decide?
Upon hearing both the Parties, the Hon’ble Court, relied on several past judgments, a notable one being DRS Logistics which held that such an invisible use of a mark in the form of metatags constitutes infringement. Recognising that impatience is a human behaviour due to which results displayed at the top tend to be the ones generating higher revenues, the Court realised that it is important to recognize such infringement by competitors who bid higher on such registered trademarks as keywords, ultimately defeating the essence of the Act.
Justice Prathiba M Singh ruled that the use of a registered mark by competitors, even as metatags, constitutes infringement, even if the mark is invisible to the user. A competitor’s use of a mark as a keyword might not constitute passing off because the mark is not visible. However, third-party bidding on marks for use by internet search engines might be considered misrepresentation.[3] Thus, the order said that the ‘invisible’ use of a mark as a keyword could constitute passing off as a matter of principle. It was also held that the Defendant’s act of encashing on the goodwill of the Plaintiff’s mark ‘MakeMyTrip’ amounts to taking unfair advantage and falls foul of Section 29(8) of the Act.
Going a step further and deploring the Google Ads program, which requires trademark holders to bid for their own trademark. The court noted that by permitting a registered trademark to be used as a keyword, a trademark owner is obliged to bid for its own trademark in order for its own products and services to appear in the advertisement section of the search results and avoid being hijacked by a rival. Moreover, even if the trademark holder refrains from bidding for their mark and competitor secures the keyword for themselves, a large majority of the users would be directed to competitor’s website causing business loss to trade mark owner’s business.
Further, the Alliance of Digital India Foundation (AIDF), a start-up industry association, applauded the Delhi High Court’s ruling and dubbed it unethical for Google to profit from a brand’s goodwill and reputation by using that brand’s registered trademarks as keywords. Furthermore, the advertising strategy, known in the business as “conquesting”, is not unusual nor exclusively used by Google, other platforms such as Amazon and Apple Store employ it as well.
Google actively investigates the use of trademarks as keywords in the European Union. On the other hand, it has stopped investigating trademark infringements and somewhat diluted the advertising policy standards in India after 2015. Still, Google’s involvement in “conquesting” has raised questions as of late. Google was formally investigated by the federal and state agencies over potential antitrust violations. In 2019, fifty state attorneys commenced a joint probe to look into whether Google’s Ad program qualifies to be charged under monopolistic practices.
What are the usual defences taken by an advertiser in a trademark infringement case?
An advertisers’ primary justification for using a competitor’s trademark as a keyword is that it does not constitute “use” under Section 2(2) of the Act, which states that “use” refers to the use of a printed or other “visual” representation of the mark unless the context indicates otherwise. However, the argument fails the test of law because by using the words “unless the context otherwise requires”, the provision allows for the usage of non-visual trademarks as well.
Moreover, to prevail in an infringement action, since a trademark owner must prove that the defendant’s use of the trademark is likely to mislead consumers as to the source of the products/services, the advertisers claim that such use is unlikely to cause confusion because the advertising appears as sponsored links with the suffix “Ad” added to them, which are clearly distinguishable from organic search results.
Initial Interest Confusion (IIC) Doctrine And The Eight Factor Test
When considering India specifically, the Supreme Court has held that a typical consumer is of “average intelligence and imperfect recollection”. This has been reiterated in various other judgments, including the DRS Logistics judgment. Thus the use of a trademark could be deemed infringement even if it is not visible to the end-user, because coupling the user’s intent when entering a search term and the display of a competitor’s advertisement as a result of the use of a registered trademark as a keyword could indicate a possibility of confusion.
Per the foregoing analysis, if the true source of the commodity is known but the consumer is momentarily confused, infringement may be proven. This is exactly what the IIC doctrine postulates. There is a general assumption that can be extracted from the trademark policy of Google with respect to the Google Ads Program that the ‘likelihood of confusion’ ultimately stems from the visible elements of the advertisement. However, it is critical to recognise that the invisible parts of an advertisement, such as keywords, can have a significant impact on the likelihood of confusion.
The doctrine reasons that even if consumers don’t make erroneous purchases, they are eventually diverted towards an advertiser who causes initial confusion by wrongfully profiting from the goodwill that their competitors have accrued.[4] What’s more, the initial interest confusion can cause consumers to spend significant amounts of time and effort before realizing their mistake. The use of the mark invisibly by a person other than the owner might just distract or divert. It might not always result in revenue loss or consumer confusion. One way of knowing the intensity of the confusion caused by conquesting would be to look at the data from consumer surveys. However, admissibility of survey data in the court is always subject to incredibility and uncertainty. The assumption of commercial loss appears to be the only basis on which the Court in this case based its conclusion. Along with the rights of the traders, customer uncertainty is a key consideration in Indian law regarding trademark infringement. In order to achieve its conclusion, the Court’s reasoning should have ideally taken into account both of these reasons and explained how it came to that decision.
In the case of AMF Inc, the United States Court of Appeals for the Ninth Circuit set out an eight-factor test in order to ascertain whether a consumer who intends to purchase from a given website would be confused just because search results are jumbled up. In determining whether confusion between related goods is likely, the following factors are relevant: i) strength of the mark; ii) proximity of the goods; iii) similarity of the marks; iv) evidence of actual confusion; v) marketing channels used; vi) type of goods and the degree of care likely to be exercised by the purchaser; vii) defendant’s intent in selecting the mark; and viii) likelihood of expansion of the product lines.
So, should branding keyword ads be made unlawful?
In the case of keyword advertising, businesses routinely attempt to attract the competitors’ customers by using their registered trademark. [5] Such a practice, it is argued, is unfair. Thus, given the complexities, it wouldn’t be too far-fetched for one to wonder if keyword branding should be made illegal altogether.
Perhaps, the risk of delegalizing the use of registered trademarks of a competitor as keywords is best demonstrated by the decision of the Madras High Court in the case of Consim v. Google. In this case, a marriage website called ‘Bharat Matrimony’ sued Google and other matrimonial websites for trademark infringement over the usage of its registered trademarks as keywords. The registered trademarks it intended to protect here were quite descriptive in character (for example, “Telugu Matrimony,” “Tamil Matrimony,” and so on). The court acknowledged in its decision that Bharat Matrimony would gain an unfair advantage if the use of such registered trademarks as keywords was found illegal.
It would thus be counterproductive to delegalize the use of registered trademarks completely. In the present case, too, MakeMyTrip wanted the mark “MMT” to be covered in the injunction order. However, because this mark consists solely of letters from the English alphabet, the Court will rule on this matter on the next date of hearing.
What lies ahead
It is true that if consumers are unable to distinguish between organic results and paid advertisements, or if they mistakenly assume an affiliation where none exists, the law must afford the trademark owner some mechanism for remedying the situation. Given that there exists an active complaint redressal mechanism when trademarks are used in ad text and display URLs, or in other words, when the “use” is visible, Google could incorporate a similar mechanism with respect to the use of trademarks as keywords or for cases when the “use” is invisible. Not only would this create a positive environment for the trademark owners, but it would also be a step further in abiding by the ‘local trademark laws’ as mentioned in the trademark policy relating to Google Ads. Alternatively, Google could delineate more clearly the difference between paid and organic results by, for instance, using different fonts, more discernible shading, or simply a label that is more understandable.
Nonetheless, the Court’s ruling could not have arrived at a better time. The interim ruling prohibiting both Booking.com and Google from using the MakeMyTrip mark on the advertisements platform until the next hearing date (on July 27, 2022) begins to solve a gap in the Indian technology law that has existed for the last decade. The final order could be the start of an interesting domino effect.
[1] J Thomas McCarthy, McCarthy on Trademarks and Unfair Competition (4th edn, 2006) [hereinafter, McCarthy].
[2] Jonathan Moskin, Virtual Trade mark Use: The Parallel World of Keyword Advertising (vol 98, Trademark Reporter, 2008) 876.)
[3] James Mellor and others, Kerly’s Law of TradeMarks and Trade Names (15th edn, Sweet and Maxwell 2018) 628, 629.
[4] McCarthy, supra note 1.
[5] American Airlines Inc v Google Inc No 4-2007CV-00487-A.
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