We’re pleased to bring you a timely guest post by Sangita Sharma on a recent order by the Delhi High Court, on the usage of a competitor’s registered trademarks as keywords or adwords. Sangita is a 3rd year student at Gujarat National Law University and has previously written for us here and here.
MakeMyTrip vs Booking.com – Looking at the Delhi High Court Injunction on Usage of Adwords
In an order dated 27th April 2022, Justice Prathiba M. Singh awarded an interim injunction in favour of Makemytrip (within the territory of India) in the matter of Makemytrip India Private Limited vs Booking.com B. V. & Ors. Defendants were restrained from using the plaintiff’s registered marks on the Google Ads Program as keywords because this would amount to trademark infringement and constitute passing-off.
Relevant Background and Parties Submission
The plaintiff filed the suit seeking protection of its various registered trademarks used by Defendant No.1- Booking.com B.V as keywords on the Google Ads Program for promoting its services as advertisements when search results are displayed on Google. The plaintiff claims because Booking.com used Makemytrip’s trademarks as keywords, that when a search is carried out for ‘MakeMyTrip’ in Google, often the first advertisement which is displayed is that of Booking.com. Thus, the defendants by such use of the plaintiff’s registered trademark constitute infringement.
Defendant no. 1, similar to the plaintiff, is an online travel portal. The defendant relied on the European Commission case (“Guess judgment”) to assert that there cannot be any restriction on the use of a trademark on the Google Ads Program as a keyword even by the competitors. It contended that restriction on the use of ‘MakeMyTrip’ as a keyword would be contrary to competition law. It was further contended that the use of generic words such as ‘make’, ‘my’, ‘trip’ is permitted as per Sections 34 and 35 of the Act. In a similar vein, the other defendant (Google) argued that the use of the trademark as a keyword does not amount to infringement of the trademark is a globally accepted view.
Issues before the Court
1) Whether the encashment of the goodwill and reputation of a registered trademark by third parties by bidding on it as a keyword through the Google Ads Program would amount to infringement and passing off or not?
2) Whether allowing non-proprietors to bid for a registered trademark as a keyword is justified when it amounts to taking advantage of the distinctive character and reputation of the registered proprietor’s trademark?
3) Whether the use of a registered trademark as a keyword through the Google Ads Program can amount to misrepresentation?
Analysis of the Judgment
Infringement under Section 2(2)(b) and Section 29 of the Act
The Court observed that the Google Ads program allows any entity to bid for keywords that might include anybody’s trademark. The competitors bid against each other for the marks belonging to each other for better visibility of their goods and services on the search engine. The Court also opined that this, as a result, forces a trademark proprietor to bid for its own trademark, or else its competitors could use the registered trademark for advertising their own goods and services. Thus, compelling the owner to make investments in the Google Ads Program.
Based on the reasoning above, the Court stated that Google is encashing the goodwill of the trademark owner by allowing the competitor to book the said mark as a keyword. The Court relied on DRS Logistics (P) Ltd & Ors. v. Google India Pvt. Ltd. (“DRS Logistics”) expansive interpretation of Section 2(2)(b) (‘use’ requires visual representation) read with Section 29(9) (spoken use of word marks can also be infringement), to opine that invisible marks can constitute use, and therefore infringement. The Court also held that defendant no. 1 is using the plaintiff’s mark for the purpose of advertising, therefore Section 29(6)(d) and 29(7) are violated. Also, it relied on People Interactive (I) Pvt. Ltd. v. Gaurav Jerry ((Jerry case) (analysis here)) to state that the invisible use of registered trademarks by non-proprietors dilutes the mark and it is on the same pedestal as online piracy.
It further held that defendant no.1 through the advertisement is diverting business from the plaintiff’s website to its own, thus taking unfair advantage of the Plaintiff’s mark under section 29(8)(a) of the Act. The logic of the Court can be summed up by the example it provided in para 44:
If a person is looking to buy an air ticket and types `MakeMyTrip’ in the search bar, and the first result in the Ad section is of Booking.com, the user may simply visit the latter’s website by clicking on the link and book the ticket. In effect therefore, the user has been directed to a competing website and a direct business loss has been caused to the trade mark owner’s business.
While the logic of the hypothetical seems clear, it does rest on the assumption that the user was not looking specifically for MakeMyTrip (for discounts, memberships, or reputational reasons, for example). Taking that forward, the question of whether a user who intended to go specifically to MakeMyTrip actually gets diverted from that quest then remains unexamined. In certain foreign jurisdictions, these types of questions are examined by looking into customer surveys and data – see for example discussion on clickthrough rate, etc here. To a certain extent, Jerry’s case did look at some data while coming to its conclusion. Could this data-driven approach be emphasized more in Indian Courts? It would help substantiate claims for both confusion and diversion. Perhaps readers could give their thoughts on this.
The invisible use of the mark by a non-proprietor could merely distract or divert. It does not necessarily create consumer confusion or lead to business loss. Actual evidence, through consumer surveys or other methods, would’ve been ideal if understanding this. The Court here seems to have reached its decision solely based on the assumption of business loss. Indian law on trademark infringement focuses on consumer confusion, in addition to the rights of the traders. Therefore, the Court’s reasoning ideally could have taken both these factors into consideration and detailed the reasoning around them when reaching its conclusion.
The Court also held that there is a violation of Section 29(4)(c) which states “the registered trademark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trademark.” . In section 29(4) “and” has been used to denote that all three of the sub-clauses needs to be satisfied for violation of this section. Unlike Sections 29(2), 29(6), and 29(8) (where “or” has been used), there cannot be a violation of only one particular sub-section in section 29(4). It is imperative to note that Section 29(4) is for marks with a reputation in India. The Court’s decision that section 29(4)(c) is violated will automatically transform ‘MakeMyTrip’ into a mark with a reputation without having the need to prove so. Although MakeMyTrip has arguably gained a reputation and goodwill over the years, the Court should have ideally elucidated this rather than skimming through it.
Further, the defendants had relied on the Guess judgment to contend that there was no violation. The Court clarified that the said judgment is not applicable to the present dispute because the facts are different. There, the Commission was dealing with ‘intra-brand’ competition and partitioning national markets, being restricted contractually and here the dispute is regarding competition between rivals.
Claim of Passing-Off
The Court discarded the traditional view that there is no passing off in the use of a mark as a keyword because there is no visible use. It relied on Kerly’s Law of Trade Marks and Trade Names (15th Ed., p.628 & 629) to conclude that the “invisible” use of a mark as a keyword can constitute passing off. The author expressly states that if ‘nobody is misled or likely to be misled, there can be no passing off.’ Thus, the misrepresentation alone cannot amount to passing off. The misrepresentation must lead to deception to constitute passing-off. This gives further cause to appreciate that a data driven approach would be beneficial to derive conclusions in this space.
The Court clarified that as a general rule the “invisible” use of a mark as a keyword can constitute passing off, however, the proprietor of the mark has all the right to book its own trademark for the purpose of advertising. This inclusion of invisible use under the ambit of passing off does seem necessary in light of the technological advances in the current digital world and cases rising related to the use of keywords and meta-tags.
There have been similar cases filed by the plaintiffs where the various defendants were restrained from bidding for any ‘keywords’ on the Google Ads Program that are identical or deceptive variants of the Plaintiff’s mark ‘MakeMyTrip’ on the ground that this action of the defendants constitute trademark infringement and passing off. This order comes at a very apposite time where cases against the use of trademarks on Google Ad Programs are on rise. However, increased clarity on some of the reasoning as discussed above , and more usage of data would have made this order a more robust precedent for disputes involving similar facts.