Critiquing the 2023 decisions on Keywords by the Delhi High Court and the Supreme Court, we are pleased to bring to you this two part post by Malak Sheth. In part I of the post, he critiques the Supreme Court’s observation in MakeMyTrip India Private Limited v. Google LLC on likelihood of confusion among the consumers. Malak is a third year law student from Rajiv Gandhi National University of Law, Punjab. In case any reader is interested, this order has previously been discussed on the blog here.
Reconceptualizing Trademark Protection in the Digital Age: A Proposal for Reform in Response to Google Ads’ Policy– Part I
By Malak Sheth
In her highly acclaimed paper titled “Amazon’s Antitrust Paradox”, Lina Khan, the Chairperson of the US Federal Trade Commission, remarks how it is as if Jeff Bezos, Amazon’s Founder, plotted ‘the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them’. The same could be said about Google’s Ads program wherein it seems to have successfully charted through the trademark laws to smoothly bypass them in allowing firms to bid for their competitor’s trademark as a keyword for their advertisement.
As a prelude, the path paved by the Google Ads program in allowing firms to bid on the competitor’s trademark for its use as a keyword seems to be a contentious issue between the trademark proprietors and Google. While on the one hand, the proprietors of the trademark claim it to be an instance of infringement and/or passing off, on the other, Google defends the Ad program for its inability to cause deception to the consumers as to the source of the product.
In March 2024, the Hon’ble Supreme Court in MakeMyTrip India Private Limited v. Google LLC (see here for the order)(“MakeMyTrip case”) refused to provide relief to MakeMyTrip where its competitor, booking.com, was using its trademark as a keyword. The Court held that the matter was not res integra ( judicially unsettled questions of law) in India, purportedly referring to the Delhi High Court’s judgement in the case of Google LLC v. DRS Logistics (“DRS case”), and held that in the absence of ‘likelihood of confusion’, no relief could be granted. This two-part post endeavours to counter and add a new perspective to the existing arguments on this blog, which can be found here, here and here. This is sought to be done by bringing out the underlying problem with the rationale of the DRS case and the Supreme Court’s approach in the MakeMyTrip case in the first part and critiquing the DRS and MakeMyTrip case (“the cases”) for its non-appreciation of the intricacies of the digital world and its erroneous equation with the situations that arise in the physical world in the second part.
Trademarks In The Digital World: The Problem with the Supreme Court’s Approach
The Hon’ble Supreme Court in the MakeMyTrip case limited its query merely to the likelihood of confusion for the consumers and also orally remarked that if a person wants to make a booking through MakeMyTrip, then there is little reason for him to log into Booking.com.
The view taken by the Hon’ble Court fails to take into consideration the function of the trademark as a use-right derived from the company’s goodwill and its intrinsic reputation and unduly focuses on the ‘source-identifying’ or consumer welfare functionality of trademarks. Although this ‘origin function’ of the trademark has been considered as its primary function, the jurisprudence justifying trademarks has increasingly recognised its ‘investment and advertising function’. These emerging justifications become important since an undue focus on the origin functionality, like the approach taken by the Hon’ble Courts in the cases, would fail to consider the nuances of the digital world. These include the use of clever clickbaits and behavioural psychology or dark patterns, consumers can be tricked into making purchases from brands other than the ones from which they initially searched.
Although Trademarks are traditionally seen as regulatory entitlements that help identify the product or services for the consumers, they also have reputation and goodwill due to their large-scale advertising and promotional measures in the offline mode. Therefore, this offline advertisement creates brand awareness amongst the people who usually associate goods and services, often maverick or innovative, with the trademark. However, the problem arises when the competitor firms choose not to expend on offline advertisement but piggyback on the goodwill of others by bidding the highest for their trademarks as keywords. In this manner, they can redirect consumer traffic to their websites by cashing in on consumer bias to select the first result on the Google search engine result page (“SERP”). The Google Ads ensure that the sponsored Ads are showcased at the top of the organic or natural search results.
Further, according to a survey of a consumer market in Germany with a digital literacy rate of around 60%, it is indicative that users cannot sufficiently distinguish organic results from advertisements, causing result selections based on false presumptions. The results can only be presumed to be starker in a developing nation like India where only 38% of Indian households could be said to be digitally literate. This also brings out the merit in the single-judge bench opinion in the case of DRS Logistics v. Google that Indian consumers are presumed to be people of average intelligence and imperfect recollection and cannot be conflated with the European Courts’ standard of an average consumer to be normally informed and reasonably attentive. However, the division bench overruled the single-bench decision in the DRS case and also referred to examples from real life to showcase healthy competition and negated the doctrine of ‘initial interest confusion’ which would be analysed in Part II of this post.
