Last week, the Delhi high court ruled that the mere use of trademarks on Google Ads, an online advertising platform, did not amount to infringement under the Trade Marks Act, 1999.
This was after online travel agency MakeMyTrip (MMT) claimed that its trademarks, “Makemytrip” and “MMT”, were being used as keywords in Google Ads to display ads and links of its rival Booking.com.
The order has opened up a new debate on trademark infringement in the digital realm, revolving around whether it can create confusion among users.
The court observed that Booking.com is a popular website, and that the chances of confusion over MMT and Booking.com were low.
The order implies that there’s always the possibility of a person or entity paying a price to be linked with a popular brand, but such an action will not be considered trademark infringement.
Rather than right or wrong, the question addressed by the court was whether MMT’s trademark was violated or not.
While the law has set criteria to decide whether a trademark is infringed or not, every use of a trademark isn’t necessarily a violation, said Siddhant Chamola, associate partner, Anand and Anand.
For example, if a person says they bought Brand X jacket and posts on social media about it, it won’t be a case of trademark infringement because it does not mean that the person made the jacket of the brand concerned.
“In the Indian trademark law, the test to determine infringement is to see whether an average consumer is likely to get confused between two entities and to the extent that the consumer visits a website thinking that it is the one they had intended to visit," Chamola explained.
Put another way, if a fictitious website called “Make My Show” used the keywords of MMT, it would have caused confusion among consumers and amounted to an infringement.
“Strictly based on this order, a third party can pay for ads to be associated with a keyword so long as the nature of business of the third party and the proprietor of the keyword is similar and the respective parties have their own reputation and informed customer base that understands the distinction between the two companies,” said Safir Anand, senior partner, Anand and Anand.
The order indicates that a third-party trademark can be used in AdWords (Google’ advertising system) bidding if it doesn’t result in any confusion or mislead users about sponsored links and displayed ads.
“While one may pay Google Ads for any keyword that may also be a trademark of some other company, there will be no infringement as long as there is no confusion or deceit in the usage of the trademark concerned,” said Shashank Agarwal, advocate, Delhi high court.
Experts say the judgment should not be interpreted as a blanket approval for businesses to indiscriminately use competitors’ trademarks as keywords as the court’s decision is context-specific and based on the premise that internet users are aware of the difference between sponsored and organic search results.
“While the Delhi High Court’s ruling provides some clarity on the use of trademarks in digital advertising, it also underscores the need for a careful, case-by-case legal analysis.
"As the digital ad landscape continues to evolve, so too will the legal interpretations and applications of trademark law,” said Sonal Alagh, partner, Alagh & Kapoor Law Offices.
What happens when an entity benefits from the name of another by using keywords associated with the latter.
“In such cases, in my opinion the tort of ‘unjust enrichment’ or ‘unfair competition’ may apply.
"How does one prove these wrongs in court, and what kind of tests need to be satisfied needs thorough analysis,” said Chamola.
Unfair competition is any conduct by a market participant that gains or seeks to gain an advantage over its rivals through misleading, deceptive, dishonest, fraudulent, coercive, or unconscionable conduct in trade or commerce.
Unjust enrichment suggests that when a person has gained benefit from another and thereby causes loss to the other person, then one who has gained is required to reimburse the plaintiff in equal terms.
On December 14, the division Bench of the Delhi high court passed the verdict on the case involving MMT and Google.
The judgment was passed in appeals arising from a June 2022 order in which a judge restrained Booking.com from conducting the Google AdWords bidding on MMT’s trademark.
The division Bench now set aside that order.
The high court bench considered provisions of the Trade Marks Act, 1999, including Section 29(2), 29(4), 29(8) and 29(7), for its ruling.
Booking.com was represented by Ankur Sangal, partner, Pragya Mishra, principal associate, and Shashwat Rakshit, associate, with Khaitan & Co.
