Google Adwords And Infringement Of Trademarks

The internet is booming nowadays and with that the online shopping, online ticket bookings, online games, etc have become popular. But how do the businesses are so famous without marketing? If they do marketing, then how it is regulated and who does it?. These are some of the questions which comes to our mind when we think about online platforms and their business models.

Online platforms do not gain this much popularity just by selling their products but with extensive marketing and planning. To help promote the business of these online platforms, Google provides for google ads. These are the ads which are shown in the search engine or below the sites. Google promotes ads based on the AdWords. These AdWords are nothing but a combination of some words chosen by the proprietor for his/her business promotion, whenever these words are searched, the first site which is displayed in the results is the one which has chosen such words.

Now the question arises that how does this practice of AdWords leads to Trademark infringement?. Trademarks are the words, symbols or phrases that are legally registered by a company on its name by stating that these things are representing our business and no one can use it further to promote their business. Google AdWords are not simply chosen but are chosen by bidding on the words. Like if you are a company and you want the words that are used by your competitor business, then you can do so by bidding on such words. This will lead to Trademark infringement. This type of ads leads to disturbance in the internet traffic of the trademark owner’s site as people are diverted into another platform.

Thus, many questions arises, Why Trademarks are so important for the business?, How the Trademarks are governed and Whether this type of activity violates the said law?, Whether the bidding process of Google ads is legally correct as the non-owners are taking undue advantages out of it?. In this article we will try to analyse the situation and also seek to find the solutions for these.

The First Question: Why Trademarks are so Important for the Business?

Trademarks are important for the business as they provide various advantages to the business and its growth.

• They are the assets which stays forever with the company and also grows with the growth in business.
• They provide protection to our brand or product by giving them a distinct identity then others, which saves it from third-party usage.
• The identity which they create in the market makes it easier for the customers to find the product of the said brand, logo, etc., easily.

Thus, A Trademark is a really important asset for the business.

The Second Question: How the Trademarks are governed and whether this type of activity violates the said law?

Trademarks are governed through the Trademarks Act, 1999[1]. It provides, who can register for a Trademark, what is the procedure of registration, what are the protections provided to the business by gaining a trademark, what can be done when there is a trademark infringement and what constitutes Trademark infringement.

The AdWords which constitutes the Trademark words of another business can violate the law i.e. The Trademarks Act, 1999, as: Section 29 of the act states that, the infringement of Trademarks is caused when:

• When the mark is similar or identical to the trademark that is registered or it has been used in relation to the similar kind of business or services.
• when the mark creates confusion among the customers about 2 different businesses using same type of marks.
• when the trade name used is similar or identical to the trademark registered.
• when there is a reputed registered trademark of the company and it has been used detrimentally causing problems to the reputation of the trademark.
• when the registered trademark is used for packaging, advertising, etc., when the proprietor had not authorized the third party to do so.
• when the registered trademark consists of words and it has been used verbally or by visual representation by any third party.

If any of the said conditions is fulfilled, it is considered to be Trademark infringement.

The Third Question, Whether the bidding process of Google ads is correct as the non-owners are taking undue advantages out of it?.

In a recent judgement named, MakeMyTrip v Bookings.com[2], the Delhi High Court held that, The Google Ads is earning money by selling the goodwill of the Trademark owner by allowing non-owners to book the marks which are already registered by another company in the name of Adwords. Also under section 29[3] of the Trademarks Act, 1999, it is considered as infringement of Trademark if used visually or by verbal representation, thus, constitutes the violation of the law. It also stated that the use of Trademarks by non-owners dilutes the mark and it is on the same pedestal as online piracy.

The above mentioned case arised when, Bookings.com, an online Travel booking platform, bid for the AdWords “Make My Trip”. Due to which the whenever someone searched Make My Trip, it came first but it was a registered trademark of the online platform “MakeMyTrip”, which is also an online travel booking company. The latter reached the court alleging infringement of Trademark by the former. The Defendant relied on many judgments and argued that it cannot be considered as an infringement as stated in Section 34 and 35 of the Trademarks Act, 1999, the use of generic terms cannot be considered as violative of the law.

The court observed that, due to Google’s bidding policy, the competitors bid highly for their opponent businesses marks or words related to their sites to lower the internet traffic on their website and divert the same into theirs. This also makes the bidders bid for their own company’s marks so that nobody else can take it and it increases Google’s investment a lot more.

Thus, the court held that, the use of trademarks as AdWords by another company then the owner will amount to Trademark infringement as the mark has gained a reputation in the market and if it is used by another non-owner company, it will divert the customers as well as will provide an unfair advantage to that company in the cost of owner’s company.

There are many such similar cases in which it has been contested that, The Google Ads bidding process is not practiced to promote the business but to hamper the opponent’s business, making it violative of the law.

CONCLUSION

It can be viewed from the above discussion that, Trademarks are very important in the new digitalized world as they provide distinct identity to the product when the market is flooded with similar kinds of products but it also brings a lot of problems with it. Due to internet, it has become easier to access other’s information, which is also considered as online piracy. Also, the medium used by Google Ads to select and promote AdWords has created a wide scope of Trademark infringement. This can be reduced if the company bidding for words has researched about the words prior bidding, which will reduce this type of conflicts between the companies and also will save the litigation costs.

Author: Ekta Gupta  – a student of National Law University Odisha , in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

References:

[1] The Trademarks Act, 1999.

[2] MakeMyTrip v Bookings com (2022) SCC Online Del 1227.

[3] The Trademarks Act, 1999, s 29.