[MakeMyTrip v Booking.com on Google Ads] Google is encashing on goodwill of trademark owners: Delhi High Court

The Delhi High Court recently expressed a prima facie view that the use of a registered mark like ‘MakeMyTrip’ as a keyword on Google Ads by a competitor like Booking.com would amount to trademark infringement [MakeMyTrip India Pvt Ltd v. Booking.com BV and Ors]..Justice Prathiba M Singh held that it is now a well-settled law in India that the use of a registered mark by competitors, even as metatags, would be infringement despite the fact that the same may be invisible to a user."Defendant No.1 is using the mark of the Plaintiff, even though the same is not visible, for the purpose of advertising in an attempt to divert business from the Plaintiff’s website to its own website. The same is done by encashing on the goodwill of Plaintiff’s mark ‘MakeMyTrip’. In the prima facie opinion of the Court, this practice amounts to taking unfair advantage of the Plaintiff’s mark and also falls foul of section 29(8) of the Act...".The Court was dealing with a suit filed by MakeMyTrip seeking protection from misuse of its trademark by its competitor, Booking.com, which was using the mark to get greater visibility of its own advertisements on Google searches.It was argued by MakeMyTrip that Booking.com was using ‘MakeMyTrip’ as a keyword on Google Ads, as a result of which when a search is carried out for Make My Trip, quite often, the first advertisement that is displayed as a search result is of Booking.com.MakeMyTrip also stated that Booking.com had made bids for the keyword ‘makemytrip’ on the Google Ads program to ensure that its website is shown as one of top three search results in the advertisement category when someone searches for ‘MakeMyTrip’ on Google.Such use of a registered trademark would constitute infringement, especially when done by a competitor like Booking.com, it was claimed.However, Google argued that the use of the trademark as a keyword is not infringement and this is the position internationally, including in the UK, US, European Union, China and several other countries..On Google Ads, trademark holders have to bid for their own trademark.The Court said that by using a registered trade mark as a keyword, Google Ads seeks to create a platform for two competitors to bid against each other for their respective marks for better visibility of their goods and services on the search engine.Therefore, in effect, a trademark proprietor is being forced to bid for its own trademark for the advertisement of its own goods and services to be reflected in the advertisement section of the search results so that it is not hijacked by a competitor, the Court said.“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,” Justice Singh noted..Google is cashing in on the goodwill of trademark owners.It was held that goodwill in a mark is created by the proprietor of the mark and the reason why the user may be searching for a particular mark is due to the investment made by the trademark owner in its promotion, advertisement, merchandising and other promotional activities.“When a user, therefore, searches for a well-known mark or a mark, which he or she has heard about in the past, on a search engine, it is due to the goodwill and reputation which is associated with the mark. It has nothing to do either with the search engine or with the competitor. The distinctive character of the said mark is because of the use by the Plaintiff and the promotion which the Plaintiff does of its own trademark.”The judge noted that in the present case, MakeMyTrip was being forced to bid for his own mark on a daily and monthly basis, because of the fact that Google allows even non-proprietors to bid for a registered trademark as a keyword.“…there is no doubt in the mind of the Court 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’. Google is encashing the goodwill of the trade mark owner by allowing the competitor to book the said mark as a keyword.”.Looking beyond the traditional concept of Passing Off.Dealing with the issue of passing off, the Court said that the essence of passing off is misrepresentation, which is calculated to cause damage to business or goodwill. The traditional concept of ‘misrepresentation’ and ‘passing off’, Justice Singh said, consists of a defendant adopting for his own goods or business, material like a name or a mark which is deceptively similar to the claimant.Restricting an action of passing off to such an ‘adoption’ might be obsolete in view of the technological advances in today’s digital world, the Court stated. The concept of `deceit’ which forms the fulcrum of an action for passing off is clearly present in cases such as this one, Justice Singh said. “Going by the traditional wisdom, such use of a mark as a keyword by the Defendant might not constitute passing off as there is no visible use of the mark by the Defendant. However, in Kerly’s Law of Trade Marks and Trade Names (15th Ed., p.628 & 629) it is stated that third party bidding on trademarks as sponsored keywords for use by internet search engines can constitute misrepresentation.”The order said that the ‘invisible’ use of a mark as a keyword can constitute passing off as a matter of principle.“This, however, would not mean that the Plaintiff cannot be permitted to book its own trade mark as a keyword. The Plaintiff itself can surely use its trademark as a keyword on the Google Ads Program if it wishes to promote itself on the search engine.”.On these grounds, the Court passed an interim order restraining both Booking.com and Google from using the MakeMyTrip mark on the ads platform till the next date of hearing.The judge said that at this stage, the injunction will be restricted to the territory of India..The matter will now be heard on July 27 along with other similar matters..Senior Advocate Amit Sibal, along with Advocates Mohti Goel, Sidhant Goel, Deepankar Mishra, Abhishek Kotnala and Karmanya Dev Sharma appeared for MakeMyTrip.Senior Advocate Chander Lall along with Advocates Ankur Sangal, Pragya Mishra and Shashwat Rakshit appeared for Booking.com.Senior Advocates Arun Kathpalia and Sandeep Sethi, along with Advocates Aditya Gupta, Sauhard Alung, Neel Mason, Ankit Rastogi, Vihan Dang, Vennela Reddy, Aditi Umapathy, Parva Khare and Devangini Rai appeared for Google..[Read Order]