This blog has been authored by Suhani Chhaperwal, 3rd year student at National Law School of India University, Bangalore
I. Introduction
The growth of trademark applications is not only restricted to tangible goods and services but have also extended to internet search engines such as Google where 80% of global businesses uses Google ads for their PPC campaigns as of 2021 and an era where Search Engine Optimization (SEO) provides 1000% more traffic than organic social media. However, in such changing dynamics, the relevant question raised is whether the courts should stick to the traditional laws of trademark infringement or these laws should be interpreted in accordance with the dynamic technological advancements giving them a modern makeover. This can be analysed through the landmark case of Google LLC v. DRS Logistics (P) Ltd. which summarized the principles applicable in such cases and raises a significant question: whether the surreptitious utilization of a trademark as a keyword, without direct display, can be deemed an act of infringement. To answer this question, the paper will rely on the cases of India as well as foreign jurisdiction having similar issues in question.
In Google v. DRS Logistics, DRS alleged that Google’s Ads Programme allowed third parties to use its trademark as keywords, leading to infringement and higher bids for competitor ads on Search Engine Results Pages (SERPs). The Delhi High Court ruled that this use of trademarks constituted infringement, rejecting Google’s claim of passive intermediary status under the IT Act. The Court held Google liable for promoting and profiting from such use. The decision set a precedent in protecting trademark rights in online advertising, while recognizing unresolved issues around keywords and meta tags in digital commerce.
II. The Legal Maze of Initial Interest Confusion (IIC) Doctrine
The central inquiry in trademark infringement claims hinges upon the likelihood of confusion (LOC). This pivotal question delves into the expected cognitive responses of potential customers encountering the contested trademarks in the marketplace. The court relied on the logic that Section 29 of the Indian Trademark Act, 1999 does not specify the duration of confusion and therefore, it concluded that any degree of potential consumer confusion, regardless of its temporal scope, could constitute actionable infringement. To define it in other terms, confusion that creates initial customer interest, even though no actual sale is finally completed as a result of the confusion.
However, this interpretation diverges significantly from the established framework of the LOC test. Firstly, the trademark consisting of “Aggarwal” is very generic and common and there is no distinguishing factor about the trademark. The test for LOC based IIC doctrine is not the right approach as the courts have to cover various other factors while dealing with trademark infringement. The courts have repeatedly reasoned that extending the doctrine, even including split-seconds, beyond “misleading and deceptive” scenarios into the legitimate realm of “comparative and contextual advertising” could be detrimental. Consequently, in case of Doran v. Salem Inn, Inc., the court reaffirmed the significance of conducting a comprehensive analysis of all relevant LOC factors, emphasizing that negligible “diversion” of attention, without any harm, falls short of establishing a genuine LOC. While diverse trademarks enhance search efficiency and facilitate consumer goal fulfilment, interpreting mere diversion as actionable infringement under the initial interest confusion doctrine potentially prioritizes trademark owner protection at the potential expense of consumer convenience.
Further, the sophistication of consumers becomes an important aspect to the LOC. The court’s reliance on Amritdhara Pharmacy v. Satyadeo Gupta, which emphasizes evaluating likelihood of confusion through the lens of an average consumer with imperfect recall, appears incongruous with its ultimate invocation of the initial interest confusion doctrine in this case. Statistical analyses suggest a high prevalence of user-initiated search refinement, which may be linked to both awareness of search engine limitations and the expectation of brand prominence in search results. Prior to initiating a brand-specific search, consumers often engage in preliminary, non-brand-oriented research, leading to a potentially higher level of consumer sophistication even if they lack prior familiarity with industry brands. Expanding the application of the initial interest confusion doctrine to encompass comparative shopping scenarios could inadvertently undermine the fundamental objective of trademark law: consumer protection.
III. The Wide Interpretation of “Use”
The court, in this case, established that the utilization of a trademark as keywords to prompt the display of advertisements pertaining to goods or services unequivocally constitutes “use of the trademark in advertising” as stipulated in Section 29(6) of the TM Act. It is imperative to elucidate that the phrase “in advertising,” as employed in Section 29(6)(d) of the TM Act, bears a distinct meaning from the phrase “in an advertisement.” The physical manifestation of a registered trademark within an advertisement is not a prerequisite to establish its “use in advertising.” Registered trademarks used as keywords to trigger ads, even without appearing in the ad itself, constitute “use in advertising” under the TM Act.
Nevertheless, it is arguable that these practices do not meet the threshold of being “deceptive, false, or misleading,” as they may present consumers with an opportunity to evaluate a wider range of potentially viable and cost-effective alternatives. The presence of intention also plays an important role to determine the use of trademark. The sponsored links employed in search engine results predominantly function as a mechanism for offering consumers a spectrum of autonomous navigational possibilities, enabling them to freely choose among distinct hyperlinks, as opposed to directing them towards a specific competitor and thus, eliminating the possibility of confusion. Allegation of “use” constituted a threshold requirement, distinct from the elements of “in commerce” and “likelihood of confusion.” Applying the established legal framework for trademark use, the court in Rescuecom Corp v. Google Inc concluded that acts of “internal use” – those confined to non-public contexts and devoid of application to goods, containers, displays, or advertisements – could not qualify as “trademark use” for the purposes of infringement claims. Moreover, the court here clarified that when a defendant’s use of a plaintiff’s trademark remains exclusively within the ambit of “non-trademark” use, meaning it does not serve the function of product source identification, trademark infringement laws cannot apply.
Additionally, Google’s actions fell within the scope of the safe harbour provision enshrined in Section 29(8) and Section 30 of the Act, which protects advertisements displayed in accordance with “honest commercial practices.” The links are just providing consumers with other alternatives which should be considered under fair use. From the case of Cosmetic Warriors Ltd. v. Amazon, it can be argued that within the established legal framework requiring proof of visual, phonetic, or structural similarity, the utilization of a plaintiff’s trademark exclusively as a concealed keyword does not constitute use and fails to meet any of these established criteria. This absence of any potential for consumer misidentification, a fundamental prerequisite for infringement, invalidates claims in such scenarios.
IV. The Broader Policy Arguments and Defences for Google
Following 2004, Google adopted a policy of non-engagement with complaints regarding the use of trademarks as keywords, potentially implying an acceptance of its unrestricted nature. However, such an inference cannot be readily drawn. In 2013, the aforementioned policy regarding trademark as keyword usage underwent further expansion. This expansion manifested in a formal announcement by Google, declaring that it would no longer implement measures to restrict advertisers from selecting third-party trademarks as keywords for ad targeting within these regions. As an independent platform operator, Google relies on automated analytical tools to generate keyword suggestions, ultimately driven by software algorithms. Consequently, it is arguable from the case of Consim info that Google’s actions do not fall within the scope of a “construed definition of active conduct or direct involvement” in trademark infringement due to the absence of intentional intervention or direct control over the keyword selection process.
The court should further take into consideration the other factors established in the case of AMF, Inc. v. Sleekcraft Boats which elaborates on similarity, proximity, strength, marketing channels, degree of care, intent, actual confusion, and product lines. Therefore, without any active conduct and solely relying on LOC while ignoring the other factors, the court erred in reasoning. Analyzing the trademark concerns associated with AdWords necessitates independent consideration, distinct from the other accusations of anti-competitive behaviour levelled against Google. These additional allegations encompass matters such as Consim Info’s claim regarding anticompetitive keyword sales, Trade Comet’s assertions of unfair competition, and the alleged preferential treatment afforded to Google’s own products like Google Maps and Google Places.
Consequently, courts must adopt a nuanced approach to interpreting “trademark use,” favouring a narrower construction that safeguards competition alongside brand protection, achieving a balanced equilibrium between these competing policy goals.
V. Conclusion
The Delhi High Court’s deviation from established legal frameworks, particularly its application of the Initial Interest Confusion Doctrine, illuminates the burgeoning challenges in navigating the delicate balance between robust trademark protection and fostering a vibrant, competitive marketplace.
Further adding layers of nuance to this intricate legal labyrinth are the expansive interpretation of “use” and the invocation of the safe harbour provision. As this dynamic legal landscape unfolds, the article proposes a cogent argument for a nuanced approach that meticulously harmonizes the principles of trademark law, safeguarding brand rights while simultaneously promoting a dynamic and competitive marketplace for the benefit of consumers and businesses alike.