Bid or Use of Registered Trademark as Key Word for Google Ads Constitutes Infringement

Bid or Use of Registered Trademark as Key Word for Google Ads Constitutes Infringement – Upholds Delhi High Court

A Single Judge Bench of the Delhi High Court in the matter of Makemytrip India Private Limited Vs. Booking.com B.V. and Ors has held that, use of a registered trademark as a Key Word for Google’s Ads programmes/ promotions constitutes trademark infringement under the provisions of the Trademarks Act, 1999 ("Act”).

Facts and Submissions by the Parties

Makemytrip India Private Limited (“Plaintiff”) filed the present suit for permanent injunction against Booking.com B.V (“Defendant No. 1”) seeking protection of its registered trademark ‘Makemytrip’ and associated/ derivative trademarks thereof. The Plaintiff submitted that it is the registered proprietor of the trademark ‘MakeMyTrip’ under various classes i.e., Class nos. 9, 35, 39 and 43 and had registered the domain name “www.makemytrip.com” way back in May, 2000. It is the case of the Plaintiff that Defendant No. 1 has been using the Plaintiff’s registered trademark as a Key Word on Google’s Ads programme. The Plaintiff’s case was that when a search is carried out for ‘MakeMyTrip’ in Google’s search bar, more often than not, the first advertisement displayed would be that of Defendant No. 1 and its services. The Plaintiff further submitted that Defendant no. 1 has also placed bids to use the Plaintiff’s registered trademark as a Key Word, despite the fact that the Plaintiff had served multiple cease-and-desist notices on the Defendants and the Defendants continued to use the same by relying on the judgement of the European Commission in the Guess Case , wherein it was held that there cannot be any restriction on the use of a trademark (as a Key Word) on Google’s Ads Program. Defendant No. 1 submitted that any restriction to use the Plaintiff’s mark as a Key Word would be contrary to competition law and would be in contravention of the law of foreign jurisdictions. Google (“Defendant No. 3”) submitted that the use of a trademark as a Key Word would not constitute infringement of a trademark and such a position is internationally recognized in many countries including without limitation; UK, USA, EU, Australia, New Zealand, China and Russia.

Issues Raised

The primary issue raised in the present case was whether encashment of the goodwill and reputation of a registered trademark by third parties, by bidding on it as a Key Word through Google’s Ads Program, would amount to infringement and passing off?

Observations by the Court and Conclusion

The Hon’ble Court opined that Section 29 (4) of the Act stipulates that if any party takes unfair advantage of any distinctive character or reputation of a registered trademark, without due cause, then such use would amount to infringement in terms of Sections 29 (6) and 29 (7) of the Act.

The Court further delved into the operations of the Google Ads programme and observed that “......what a trademark proprietor is being forced to do is to bid for its own trademark, in order for the advertisements of its goods and services under the said trademark to be reflected in the advertisement section of the search results and not be hijacked by a competitor. This entails the trademark owner to make investments in the Google Ads Program on a daily basis, failing which its competitors could use the trademark for advertising their own goods and services and have listings higher on the Google search results.”

The Court further observed that even though the Plaintiff was the registered proprietor of the trademark ‘Makemytrip’, it was still required to spend a substantial amount on bidding for its own registered mark, as Defendant no. 3 and 4 allowed even non-proprietors of the mark, like Defendant No. 1 to bid for the same.

The Court then referred to the judgement passed by its co-ordinate bench in the matter of DRS Logistics Vs. Google India Pvt Ltd.(3), and stated that use of a mark as a Key Word in Google’s Ads Program, inasmuch as the mark being used in a hidden manner does not take away the fact that it is, in fact, use of the mark as defined under Section 2 (2) (b) of the Act in relation to those very services. The Court further observed that as the very purpose of Google’s Ads Programme was advertising, it held that use of a registered trademark as a Key Word would squarely fall within the purview of Section 29 (6) (d) of the Act.

The Court further held that as the use of the Plaintiff’s trademark as a Key Word was diverting traffic to Defendant no. 1’s website and generating business for it, such use would amount to taking unfair advantage and would fall foul of Section 29 (8) of the Act. The Court also observed that in various other suits filed by the Plaintiff for trademark infringements due to use of its registered mark as a Key Words under Google’s Ads programme, the Plaintiff had almost every time succeeded in getting an injunction in its favour. The Court further referred to the judgement passed by the Hon’ble Bombay High Court in the matter of People Interactive (I) Pvt. Ltd vs Gaurav Jerry(4) where the question of use of registered trademarks as Key Words by a rival website was considered and answered.

The Court observed that the Bombay High Court had taken a view that invisible use of a registered trademark by non-proprietors, dilutes the mark and equated such an act with online piracy.

The Court also distinguished the Guess judgement, which was cited by Defendant No. 1, in support of its actions, on the ground that the European Commission in that case was dealing with intra-brand competition where the parties were contractually restricted and hence the Guess Judgement not be applicable to the present case.

The Court also referred to Kerly’s Law of Trademarks and Trade Names(5) and noted that, although the Courts (of appeals) have been sceptical to consider “invisible” use of a trademark to constitute infringement, it is clear that a thirdparty bidding on trademark(s) as sponsored keywords for use by internet search engines can constitute misrepresentation.

After due consideration of all the judgements and relevant literature, the Court held that “invisible” use of a mark as a Key Word can constitute passing off as a matter of principle and opined that prima facie use of the Plaintiff’s registered trademarks constituted infringement as the same would be detrimental to the Plaintiff’s monetary and business interests, and also to its brand equity. Accordingly, the Court restrained the Defendants from using the mark ‘MakeMyTrip’ in any manner.

Source : lexology.com