Advertising by keywords on Google Ads & for SEO: How legal is it?

Advertising by keywords, keywords, Google Ads, SEO, Search Engine Optimization

The message coming out from legal world is quite loud and clear that lakhs of digital marketing agencies and brand owners need to be more cautious and careful, henceforth, when it comes to advertising in digital world.

The court has gone a step further in recognising the validity of Indian trademark law in digital world even if it is invisible. Despite being invisible per se, the Court found that use of a competitor’s trademark as a keyword would amount to trademark infringement and passing off.

It has been found that it is common practice in the industry to divert traffic towards its own website by using the most popular or competitor’s trademark. With this decision now its amply clear that, such an act will amount to infringement and passing off.

When a person uses a trademark or service mark without permission, it is trademark infringement. Passing off applies to unregistered trademarks, while trademark infringement applies to registered trademarks.

Remedy for infringement and passing off of Trademark.
If found guilty of infringement or passing off, the law provides for both Civil and Criminal remedy. Under Civil remedy, the Court can grant either

Damages or
An account of profits,

Together with or without any order for the delivery-up of the infringing labels and marks for destruction or erasure. Under Section 135(2) Court can give Ex parte or interlocutory injunction order in accordance with Section 36-42 of Specific Relief Act, 1963 or Order XXXIX Rules 1 & 2 and section 151 (Inherent power of the Court) of the code of civil procedure, 1908, for discovery of documents, preserving of infringing goods, documents or restraining the defendant from disposing Assets which cause adversely affects the plaintiff.

Criminal remedies, provides for penalty under Section 103, which includes punishment with imprisonment for a term which shall not be less than 6 months but which may extend to 3 years and with fine which shall not be less than Rs50,000 but which may extend to Rs2,00,000.

According to section 104 if any person who helped the accused by selling, providing or hiring services of the such good, possessing such goods for sale or any other possible way will be punished with imprisonment for a term which shall not be less than 6 months but which may extend to 6 years and with fine which shall not be less than Rs 50,000 but which may extend to Rs 2,00,000.

Under Section 105 if a person commits any of the offence provided in section 103 or 104 he shall be punishable for the second and for every subsequent offence, with imprisonment for a term which shall not be less than 1 year but which may extend to 3 years and with fine which shall not be less than Rs 1,00,000 but which may extend to Rs 2,00,000. Fines and imprisonment can be reduced if court thinks it fit.

Under Section 111 of the Act forfeiture of goods is provided in the conviction or acquittal under Section 103 if there is no intent to defraud the plaintiff, the court convicting or acquitting him may direct the forfeiture to Government of all goods and things by means of, or in relation to, which the offence has been committed.

- Section 115(3) make offence under Section 103 cognizable and under Sub-Section 4 of Section 115, any police officer not below the Rank of DSP and equivalent may, if he is satisfied that any of the offences referred to in sub-section (3) of Section 115 has been, is being, or is likely to be, committed, search and seize without warrant the goods or things involved in committing the offence, wherever found, and all the articles so seized shall, be produced before a Judicial Magistrate of the first class or equivalent. Provided that the police officer, before making any search and seizure, shall obtain the opinion of the Registrar on facts involved in the offence relating to trademark and shall abide by the opinion so obtained.

Recently in the case of MakeMyTrip India Private Limited v. Booking.com B. V. & Ors.1 , the Delhi High Court granted an interim injunction in favour of the Plaintiff, restraining Defendant from using the Plaintiff’s registered trademark on Google as part of the Google Ads Program and the keywords system as this would amount to trademark infringement and passing off.

Protection for trademark “MakeMyTrip
The Plaintiff claimed protection for its trademark “MakeMyTrip” and its variants and alleged that the Defendant, Booking.com B. V. was using the Plaintiff’s marks on the Google Ads Program to promote their own business and website. The Plaintiff claimed that when a search was carried out for “MakeMyTrip” in the Google search bar, one of the first advertisements displayed in the search results of the ads section was of Booking.com.

It was further alleged that the Defendant, being one of the biggest competitors of the Plaintiff, was infringing upon their trademark rights by using their trademark on Google for the purpose of their own personal gain. It was submitted that a series of letters had been exchanged between the parties preceding this suit wherein the Defendant had agreed to cease bidding and using the trademark of the Plaintiff through the Google Ads Program.

The Plaintiff further submitted that in 2022, however, the Defendant refused to comply with the requisitions of the Plaintiff in view of the decision given by the European Commission in AT.40428-GUESS2 dated 17th December, 2018 (hereinafter “Guess Judgment”), where it was held that there cannot be any restrictions on the use of a trademark on the Google Ads Program as a keyword, including use by competitors.

Further, the Defendant claimed that any restriction upon it would be in contradiction to the Guess Judgment and put them in contravention of the law of other foreign jurisdictions since they are an international entity in the field of providing hotel bookings, airline bookings etc. with worldwide business operations.

The Defendant went on to argue that any restriction on use of the Plaintiff’s mark as a keyword would be contrary to competition law. Finally, the counsel for the Defendant also submitted that the words “make”, “my” and “trip” are all generic words and can be used in a descriptive fashion without contradicting the law.

It is pertinent to note that the counsel for Google also argued the international position stating that such use of a trademark cannot amount to trademark infringement, keeping in mind the positions taken by the courts in UK, US, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China.

Use of the mark ‘MakeMyTrip’ as a keyword is infringing use

The Court opined that, “the use of the mark ‘MakeMyTrip’ as a keyword through Google Ads Program by one of its major competitors, Booking.com is infringing use…It is now well settled in India that use of a registered mark by competitors even as metatags would be infringement…

In fact, the Court took into account the decision of DRS Logistics (P) Ltd & Ors. v. Google India Pvt. Ltd. 2021 (88) PTC 217 (Del) where it was held that, “invisible use of trademark to divert the traffic from proprietors' website to the advertisers' / infringers' website shall amount to use of mark …”

With regards to whether use of a trademark for the purpose of advertisements on the Google Ads program amounts to “use” per the definition of section 2(2)(b) of the Trademarks Act, 1999, the Court stated that, “there is no doubt … that use of the Plaintiff’s mark by Defendant No.1 as a keyword on the Google Ads Program is use for the purpose of ‘advertising’.”

Thus, the Court found that the Defendant’s use of the mark, even though not visible, for the purpose of advertising in an attempt to divert business from the Plaintiff’s website to its own, amounts to taking “unfair advantage of the Plaintiff’s mark.”

With regard to the Guess Judgment, the Court also stated that the factual background of that case was completely different. The said case dealt with intra-brand competition and partitioning national markets, being restricted contractually. Meanwhile, the Court noted that the present case concerns a competitor using the Plaintiff’s trademark as a keyword through the Google Ads Program.

Furthermore, the Court also noted that the actions of the Defendant amounted to passing off, stating that, “The concept of `deceit’ which forms the fulcrum of an action for passing off is clearly present in cases such as this one.”

Lastly, the Court also took into account the fact that the “use” per se in this case was not “visible use”. However, it noted that the traditional notions cannot apply in this case and such invisible use may also amount to misrepresentation or passing off in some circumstances. The Court took into account Kerly’s Law of Trade Marks and Trade Names (15th Ed., p.628 & 629) where it was observed that ‘third party bidding on trademarks sponsored by keywords for use by internet search engines can constitute trademark infringement’.

Therefore, finding a prima facie case in favor of the Plaintiff, the Court granted an interim injunction restraining the Defendant from using the mark “MakeMyTrip” together/in conjunction, with or without spaces for the purpose of using it as a keyword on the Google Ads Program till the next date of hearing. It is also worth noting that the Court did not in fact restrain the Defendant from using the words “make”, “my”, “trip” separately or non-conjunctively on a standalone basis “in a descriptive or generic sense on the Google Ads Program”. It was also clarified that this decision would only apply within the territory of India and not have any global repercussions at this stage.

Brand Owners and Agency doing SCO needs to be more cautious now

With this decision, now it is highly desirable for all advertising agency and digital marketers, especially SCO promoters, as well as brand owners to be careful in use of keywords, while driving traffic towards website, products, services and advertisement by unknowingly falling on some one else registered trademark, be it invisible per se.

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