In today’s era of growing E-Commerce, online advertising has been an instrumental marketing tool for many businesses, ranging from online service providers and retailers who conduct business transactions only in the cyber space to such business entities whose business is confined to physical market place, despite which they resort to online advertising for marketing their goods/services. The growth of online advertising is hugely attributable to the wide reach of search engines which act as platforms for different entities to market their goods and services.

The search engines work on the basis of a complex algorithm wherein a search term or phrase, referred to as ‘key word’ entered by a user in the search box, gives rise to organic search results. The purpose of a search engine is to enable an internet user to search for webpages set out in search results. The results are dependent on various factors which determine the relevance of a webpage appearing in the search result. On the basis of such factors, the webpages appear in the search result in order of their relevance.

About the Google Ad-Words Program

However, the most wide-spread and far reaching search engine, that is www.google.com, has, introduced a paid advertising program called the Google Ad-Words Program. The Ad-Words Program is a self-serve advertising service for businesses. As per this program, an entity can place bids on particular search terms/phrases, or ‘keywords’ which made available for bidding by the search engine through a ‘Keyword Suggestion Tool’. The program thus allows an entity to, by way of the bidding process, to adopt and use keywords that match the phrases which the internet users are more likely to use/search for through the search engine.

Once a person has successfully bid for an Ad-Word, the search engine would display the webpage owned by such person in the search results under the section of ‘Sponsored Links’. When an internet user clicks on the ‘Sponsored Link’, the search engine earns a revenue by way of the cost paid by the person for displaying its advertisements in the sponsored link. Therefore, by bidding for a frequently searched Ad Word, a person can gain increased visibility on the search engine, leading to increased traffic on its website and diversion of business.  

Trade Marks Infringement on the Google Ad-Words Program

In the above model of advertising, the aspect of trade marks infringement arises when an entity bids on such Ad-Words on which another entity has trade mark rights, statutory or common law. In such a case, owing to the reputation and the goodwill of the said trade mark, which has been adopted as an Ad Word by a third party, an internet user conducts searches for the goods/services provided by such trade marks owner with the same Ad-Word. As a result, the search result, along with the organic results, also reflect the webpages of those entities that have successfully bid for the said Ad-Word on the Google’s Ad Words Program. This leads to a diversion of internet traffic from the webpages of the owner on the trade mark. Also, the entities that have bid for such trade marks as Ad-Words get increased traffic on the basis of the goodwill and reputation that has accumulated in favour of the trade mark that has been made available as the Ad-Word.

 

Case Law : Consim Info Pvt Ltd v. Google India Private Limited & Ors. [2013 (54) PTC 578 (Mad)]

The issues of trade marks infringement on the Google Ad Words Program recently arose before the Hon’ble Madras High Court in the case of Consim Info Pvt Ltd v. Google India Private Limited & Ors. [2013 (54) PTC 578 (Mad)]. The Appellant in this case, that is Consim Info Private Limited is an entity engaged in providing online matrimony services for which it had adopted various trade marks, including, inter alia, Bharat matrimony, Telegu Matrimony, Assamese Matrimony etc. The Appellant had filed a suit for permanent injunction against, inter alia, Google India Private Limited to restrain it from offering the its trade marks as Ad-Words by making the same available for bidding by third parties on its Ad-Word Program and to restrain the Respondent Nos.2-4, which had successfully bid for the said trade marks as Ad-Words from bidding for the same. The Appellant’s contention was that the acts of Respondent Nos. 2-4 of bidding for the their trade marks on Google Ad-Words program constituted primary infringement. It was contended that by bidding for the said trade marks, the Respondents were attempting to ride on the goodwill and reputation of the trade marks that had been assiduously built by the Plaintiff in its various trade marks including Bharat Matriomony, Telegu Matrimony, Assamese Matrimony etc. It was contented that the act of the Respondents qualifies as an act of unfair competition. It was further contended by the Respondent that the act of Google India amounted to secondary/ ancillary infringement, since by offering the same as Ad-Words, it enabled other third party entities, including but not limited to the Respondent Nos. 2-4 to infringe the trade marks of the Plaintiff and pass off their services as that of the Plaintiff on the Google Search Engine.

The Hon’ble Division Bench, concurring with the Single Judge of the Madras High Court observed that the Plaintiff is entitled to injunction. However, the Court observed that since Google India already given an undertaking that it shall not act in a manner so as to infringe the trade mark of any entity, pursuant to its Trade Marks Policy, there was no requirement of disturbing the arrangement among the parties.

During the course of arguments, the most interesting point of discussion that emerged is whether the Plaintiff can claim rights and thereby injunct the Respondents to use words like “matrimony”, “bharat”, “tamil”, “telegu” etc. since there are generic words not capable of being monopolized by any since entity. The Hon’ble Court observed that such words when used independently did not constitute a trade marks infringement, however when used conjunctively, with or without a space, do constitute an infringement.

Analysis and Observations

The decision of the Hon’ble Madras High Court is a welcome step taken by the judiciary which furthers the scheme and the object of the various provisions of the Trade Marks Act, 1999. In view of the wide prevalence and reach of Google India in the field of online marketing, it becomes an apt platform for third party entities to create in the minds of the internet users an impression of association of the web page that appear in the sponsored link with that of the owner of the trade mark which has been searched. For example, if an internet user searches for the word  “X”, which is a well-known mark and is owned an entity “A”, and the search result reflects the webpage of another entity, say B, the public is bound to be led into believing that the entity “B” is in some manner associated with/endorsed by the entity “A” since, “X” being a well-known mark brings to the mind of the public an association with the entity “A”. Therefore, the entity “B” gets a chance to ride on the goodwill and reputation that has been built by “A” in the mark “X” causing passing off.

Further, section 29(7) of the Act reads: “A registered trademark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee” This provision makes it amply clear that when a registered trade mark is being applied by an unauthorized user for advertisement of his/her goods/services, it amounts to infringement. In the digital era, where online marketing has replaced traditional marketing, it is important to adopt a broad definition of the words “applies such registered trade mark to a material”. The Ad-Words program enables an entity to bid for a trade marks as an Ad-Word for the purpose of advertising. Therefore, the party bidding is applying the registered trade mark for the purpose of advertising his/her goods and/or services. Therefore, this act  is squarely covered by the said provision and therefore, is an act of infringement.

Along with passing off and infringement, the act of bidding for the trade mark of an entity by an unauthorized party would also amount to a dilution of goodwill and reputation. Section 29(4)(c) of the Act, according to which a registered trademark is infringed by a person who uses in the course of the trade a mark that: “(c) the registered trade mark 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 trade mark.” It is clear that by bidding for the trade mark of another entity is taking unfair advantage of the repute of the trade mark. Also, the fact that unrelated entities show up in the search results when a trade marks is being used as a key word by an internet user, is detrimental to the distinctive character of the said trade mark.

In view of the above Google should be precluded for enabling unauthorized users to bid for the trade marks of other entities. Such an act would be a violation of statutory and common law rights of the trade mark owner.

It can therefore be concluded that the jurisprudence has taken a turn in the positive direction by affording protection to trade mark owner on the Google search engine.