Introduction
Online keyword advertising at
search engines is a form of contextual advertising, and had become a very effective
tool for online advertising. The keyword advertising is believed to be
pioneered by Yahoo in 1996 when Chip Royce, marketing manager, wanted targeted
advertising for the users who searched in by the keyword golf. After that the
trend so started had been followed by many search engine operators and they
have made it gradually a major source of revenue. Google has reported recently
multibillion dollars as revenue from their popular service AdWords.
There had been various cases in
last decade relating to such keyword advertising where the plaintiff had sued
advertisers and also search engine operators for using trademarks as
searchable keyword for triggering the advertisements. The main contention of
the trademark owners had been that trademarks cannot be used as searchable
keywords as this enables the advertiser to free-ride over the goodwill of
someone else. Also, the trademark owners contend that by using
trademarks as searchable keywords for advertising, the advertiser gets a direct
and easy access to the trademark owner’s hard earned goodwill and brand awareness, which he unfairly exploits by diverting the prospective customer's interest advertiser’s own products. This allegedly amounts
to unfair competition and partial passing off.
Dealing with such cases, the
courts across globe had opined their view on case to case basis. None had
explicitly declared that whether such use of trademark, i.e. using trademarks
as searchable keywords for triggering advertisements, amounts to trademark infringement or not.
The researcher, not taking side
on either sides, here puts forth some issues which must be looked into while deliberating
upon the matter.
First, we will get a brief know-how of Keyword Triggered Advertising. Then we will address the issue
and deal with the gray areas related to the issue, where clear stand is still
to be taken. Apart from theoretical arguments we will discuss a few example and use some analogies to put light from different angles on the matter.
How keyword triggered advertising works?
A marketer who advertises the product chooses certain
keywords or combination of keywords and registers them with the search engine.
Whenever an internet user, searches anything on the search engine using a
string of text, and if that string comprises any of these registered keywords,
the advertiser’s advertisements gets triggered and gets displayed on the same
page where search results are displayed for the said search string. An
illustrative example is depicted below. In this example a user searches for
the word ‘jeans’ on the famous search engine 'Google'. As you can see, on the right hand side of the search results,
advertisements are displayed.
The Controversy
This tool of keyword advertising
on search engines had been in controversy for long for use of trademarks as the
searchable keyword for triggering advertising by the advertisers. There had
been cases where the trademark owners have sued the advertisers as well as the
search engine owners for various claims like initial interest confusion[1],
unfair competition, misrepresentation in commercial advertising, dilution of
trademark, loss of reputation, unjust enrichment, etc.
The marketers who allege these claims have few basic
contentions. For e.g., that the advertisers are exploiting the trademark’s value
and goodwill in market to advertise their own products. Which, in a manner,
amounts to free-riding by the advertisers on the efforts all done by the
trademark owner.[2]
To comprehend better let us look into the following hypothetical
example. Fiat registered the keyword ‘Fiat Linea’, which is a trademark owned
by Fiat as a keyword with Google Adwords. Now when a search engine user searches
for ‘Fiat Linea’ (a car by Fiat), then along with the search results, and
advertisement for ‘Maruti Suzuki’s SX4’ appears on the same webpage, just
because the user had used ‘Fiat Linea’ as keyword. Now ‘Fiat’ claims that
Maruti Suzuki is:
a)
creating confusion in the users mind that Fiat
Linea and Maruti Suzuki SX4 are linked in some manner, i.e. initial interest
confusion
b)
getting benefitted by the marketing efforts done
for Fiat Linea by Fiat, thus getting unjust enrichment.
c)
using ‘Fiat Linea’ trademark for selling its own
products, which amounts to commercial use of the trademark which belongs to Fiat
and thus amounts to trademark infringement.
d)
the advertiser poses unfair competition to the
trademark owner by targeting prospective customers who are interested and
search for the trademark owner’s product.
These few issues are apparently the core of the controversy,
that whether trademarks should be allowed to be used as keywords to trigger
advertisements.
Here let us be clear that this thesis does not deal with
issues which are already deliberated and decided upon by the courts. These are
the cases in which the trademark has been used not just for triggering
advertisements but are also depicted in the text of the advertisement including
the webpage links along with the advertisements. This thesis also excludes
deliberating upon the cases where the trademark is used for the re-selling
purpose of the products of trademark owner.
Initial
Interest Confusion
Initial Interest
Confusion is a legal doctrine under trademark law that permits a
finding of infringement when there is temporary confusion that is dispelled
before the purchase is made. Generally, trademark infringement is
based on the likelihood of confusion for a consumer in the marketplace. This
likelihood is typically determined using a multi-factor test that includes
factors like the strength of the mark and evidence of any actual
confusion.
The court said ads
containing Geico mark (left) were likely to confuse people while those that
didn't (right), weren't likely to confuse. Because the court did not discuss
any possible exceptions for "fair" uses of the Geico mark in the ads,
it appeared to impose a "strict liability" test of whether or not an
ad contained the mark. Consistent with the Geico case, some courts have
ruled that as long as the trademark is not in the advertiser's sponsored
ads, there's no infringement[4].
The dispute in the matter is
based on assumption that a search engine user, when makes a search, where the
search string comprises the trademark, he is searching for the trademark
owner’s product’s information.
First, researcher avers that it
is just an assumption, that the user, when uses a certain trademark name for
searching on a search engine, is specifically looking for that particular
product or its information only. What if one searches with the words ‘Cars like
TATA Nano’? When a person searches using words ‘TATA Nano’(an automobile
product by TATA) on any search engine, he may be searching for the class of
cars in the category of which TATA Nano belongs. Because he may not know what
that particular product segment is called, to which TATA Nano belongs, to use
it as keyword for his searching. Or he may be searching for any other cars if
any are there in that product segment. But in this case, if the keyword
advertising is not allowed, the user of the search engine will not be able to
see the advertisements from the competitors of TATA Nano, about whom he
explicitly intends to know.
However, the contention that keyword advertising creates confusion
only holds good in the cases in which the advertiser uses the trademark of the
competitor in his own triggered advertisement[5]. In a case the defendant
used the trademark ‘Smart Money Clip’ as the heading of its advertisement,
which was held confusing to ascertain the source of the product offered in the advertisement.
But the contention holds baseless in other cases where
advertisements are totally explicit and are certain or easy to ascertain the
source of the products through the advertisements. Because the way the ads are
displayed, totally demarcates and differentiates advertisements from search
results. For instance, in Google AdWords, such advertisements are displayed in
a separate column of a page on which at the top of the column it is explicitly
visible ‘Ads’ or ‘Sponsered Links’[6]. Same in the case of Yahoo,
Bing and other popular search engines. There also is a column line which
separates search results from the ads displayed. So, as far as the contention of
confusion is concerned, it is taken care will by the search engine owners which
had been recently brought to the court by the plaintiffs.
Trademark Infringement
Now another contention is that
the keyword advertiser gets benefited by the goodwill and marketing efforts of
the trademark owner to get its products advertised, which leads to unjust
enrichment to the advertisers.
What if Pepsi comes up with a
marketing plan that they will install or hire bill-boards near every Coca-Cola
outlet and advertise Pepsi on them? Will it be called an immoral or unethical
marketing practice? Earlier doing the same was not possible because of many
constraints due to lack of resources and technology. But now the internet world
had made it possible by just a click of effort. Therefore Pepsi has full right
to post any such billboards wherever they want, Coca-Cola is not entitled to
oppose such gorilla marketing efforts by any of his competitors including
Pepsi, unless it is in direct conflict with laws of the territory.
I would rather say that the keyword advertising,
specifically when trademarks are used as keywords, augments the government’s
efforts to foster a perfectly competitive market and helps customers to get
knowledge about the products in the market in a more easy way. If a prospective
customer searches for Fiat Linea and in the process, without any efforts also
comes to know about various other products which lie in competition to Fiat
Linea, then isn’t it favorable to customers, getting them well informed and
knowledgeable about the products available in the market? On the same hand it
will also foster the culture of making marketers sell their goods by the virtue
of the value in their offering, rather than the marketing efforts and puffery
advertisements they put to attract customers.
Unjust Enrichment
Let us take another revealing
example. Let us compare the keyword triggered advertising process to a
situation in a supermarket. Lets assume Hindustan Lever (HL) extensively markets
a luxury soap. A customer, gets interested in that product and goes to
supermarket to buy the soap. When he goes to the supermarket searching for the
HL’s luxury soap, he also comes accross to see Baba Ramdev Pharmacy’s (BRP)
Soap lying in the same shelf. The question here arises that; Is BRP getting
unjustly enriched when customer sees BRP’s products lying in the shelf? No,
certainly not. Because in this case the customer has come to see the HL product
in the supermarket, not to a exclusive showroom of HL. It cannot be assumed in
every case that a customer will be looking for an exclusive showroom for seeing
HL’s products.
Similarly search engines is an
independent part of internet world and is everyone is free to sell their own
products. If search engines display advertisements to the users of his own
search engine there should be no hindrance for them doing so. After all, a
search engine is just another market place with free market policy and not some
entity which is bound to take care of special interest of any other business
entity. Similarly, as the customer intends, he is able to see the HL product
lying the shelf. BRP’s products are just visible to the customer because they
also exist in the market for the customers.
In the same way when a person
searches for Fiat Linea on a search engine, the marketing efforts by TATA for
Fiat Linea are taken care by the search results which appear on the left hand
side of the screen. If TATA had done enough marketing on online media then the
very first entry in the search result will direct the search engine user to the
most relevant website for getting pertinent information on Fiat Linea. So there
lies no question of any damage done to the goodwill and efforts in marketing by
the trademark proprietor in this case.
In the earlier example of HL and BRP, another question
arises; Can Hindustan Lever ask the supermarket owner to not to put Hindustaan
Lever and BRP’s products on the same shelf or remove BRP’s products from the
shelf on which HL’s products are kept? No he cannot. Because if Hindustaan Lever
does so, he will be asking the supermarket owner to provide a pseudo exclusive
showroom environment for each customer coming to supermarket searching for HL’s
soap, and that too without any consideration in return for the supermarket
owner. Further, if the supermarket owner satisfies any such request by HL, then
HL will get unjustly enriched by getting an exclusive showroom of its products
without any extra efforts. And on the same hand it will be detrimental to the
efforts done by BRP in making its products accessible to the customer by making
them available in the supermarket. So, basically if HL asks the supermarket
owner to remove BRP products from the shelf, then HL will be violating the
various norms established in anti-monopolistic and unfair trade practices
statutes in force in various countries in world, by making efforts to
unscrupulously prevent the customers from getting knowledge about other
products in the market. So to make it more clear, it’s the plaintiff who will
get unjustly enriched if the trademark keyword searching is not allowed to the
competitors.
We can
rightly extrapolate from the above arguments that the plaintiffs should actually
pay the search engines to not to display competitor’s advertisement when a user
searches using their trademarks as keywords. At least this will make the
trademark owners pay something in order to get an exclusive showroom environment
on that particular search engine.
Ultimately
the grund norm is that internet is market place. If customer approaches a
market searching for any particular product, he or she has full right to know
about various other products available in the market which can satisfy his or
her requirements. And on a medium like internet, where search engines are the
door to find and reach the websites, it will not be possible unless the
customer knows the domain name or product name of each and every product in the
market. Not allowing such keyword advertising will only conceal such existence
of other substitute products. This will again amount to unfair trade practice.
So to know about the alternative to the products he is intending to buy or seek
information for, keyword triggered advertisements, specifically using
trademarks as searchable keywords, are the most simplified manner which
benefits both the consumers and the marketers, that too without making any
significant damage to the goodwill or reputation of the competitors. And ultimately
it is no doubt that the whole idea behind the system of facilitating the
trademark protection is to prevent unfair use of trademarks. Not to help trademark
owners to put a veil on the existence of their competitors in the market.
Now let
us discuss a few landmark judgments on the issue in European Union (EU) and
India
Google France v Louis Vuitton (2010)[7]
This case was filed by a group of companies under
the big umbrella of LMVH[8]. There were different claims by
these companies against Google’s AdWords. They claimed that Google allowed
their trademarks to be used by advertisers to trigger the advertisements.
Secondly they claimed that Google displayed identical trademarks in the third
party advertisements.
In this landmark case on the issue of trademarks as
searchable keywords to trigger advertisements, the highest court in EU ruled
that Google cannot be held liable for the trademark infringement, if any done,
unless Google’s active role is proved in infringement of the trademark.
In this
famous case the court held the following rulings.[9]
a)
When Google allows the advertisers to choose
and use the trademarks for triggering advertisements, it cannot be said that
Google had used the trademark. It is the advertisers who are actually using the
trademarks. So Google cannot be held liable unless an active role of Google is
proved in such infringement. It is the third party advertisers who are liable
to be sued for such infringement if any.
b)
Onus is on trademark owners to make it come
to the knowledge of Google of such infringement, and if proved then Google is
obliged to remove such advertisements. Google can only be held liable if it
knowingly allows infringing advertisements to get displayed.
c)
The court also held that the use of a trademark by third party, should
only be such that it facilitates the customers with knowledge of other
alternative products available in the market. The third party advertisement
should not use the trademarks in the body of their advertisement so as to
create confusion in mind of the customer about the origin and source of the
product so displayed in the third party advertisement.
d)
The court ruled that all further cases of such claim of infringement
should be dealt case by case by the national courts. And search engines are
allowed to sell trademarks as keywords.
e)
The third party advertisers when using the trademark of some other person
should disclose the origin and the source of the goods they are offering with
certainty.
After this ruling, search
engine operators got relieved to a great extent as they were continuously sued
for various such cases in last decade.
So after a lot of obscurity on the issue the EU court in
Luxemburg made the situation crystal clear that the Trademarks should not be
used in the third party advertisements, so as to cause a commercial use of the
trademark owned by other, by referring to a precedent case.[10]
Consim Info Pvt. Ltd. v Google India Pvt. Ltd. and
Ors.
The Google Adwords controversy hit India in 2009 when Consim Info which runs BharatMatrimony.com got temporary injunction from Madras High Court[11], against Google India alleging the same trademark infringement and unfair competition. Consim Info alleged that Google and the competitors of BharatMatrimony.com, allegedly Jeevansathi.com, SimplyMarry.com, are using its trademarks to trigger the advertisement on the search engine. Consim Info mentioned a list of various trademarks of which it is owner. These trademarks consisted of terms like AssameseMatrimony, BengaliMatrimony, TamilMatrimony, PunjabiMatrimony, etc.
At
the appeal for injunction by Consim Info, concerning the propensity of the
internet world, Madras High Court granted temporary injunction against Google restraining
it from displaying such advertisements.
But in the recent judgment on the same case by the
Madras High Court on 30th September 2010,[12]
the court delivered the judgment on the same lines as European Union,
vindicating Google and Others from the trademark infringement allegation by
Consim Info. The court meticulously recorded the catharsis of the evolution of
the rulings from past to till date related to the issue – “Trademarks as
searchable keyword on search engines to trigger advertisements”.
The court also held that that words Bharat,
Matrimony, Tamil, etc are generic words. If these words will be prohibited from
use as searchable keywords then there will be left very less options for both
search engine users and the advertisers. So the claim on these generic words, like
Tamil, Assammeese, Bengali, Matrimony etc., for which almost no synonyms are
there, is unjustified.
Search engine is an information
provider. When any search is made on search engine, the search engine replies
with all relevant information available on internet related to the search
string. We can see search engine as a broker of information. Search engine is
an independent business entity on itself, which provides information to the
user. It is to be noted that search engine is an independent business entity in
itself and it provides the information service to its users free of cost.
Press Release-Court of Justice of the European
Union
As per very recent press release on 22nd
September 2011, any court across world has first time opined on the matter
discussed in this thesis. The press release was done after close to five months
of a case decided by the court[13], when the judgment lead
to a lot of controversy regarding some issues which are the heart of this
thesis.
The press release clarifies following points:
o
“The Court observes that the trade mark’s
function of indicating origin is adversely affected where the advertisement
displayed on the basis of the keyword corresponding to the trade mark does not
enable reasonably well-informed and reasonably observant internet users, or
enables them only with difficulty, to ascertain whether the goods or services
referred to by the advertisement originate from the proprietor of the trade
mark or an undertaking economically connected to it or, on the contrary,
originate from a third party. However, use of a sign identical to another
person’s trade mark in a referencing service such as ‘AdWords’ does not
adversely affect the advertising function of the trade mark.”[14]
o
“The Court also considers, for the first time,
the protection of the trade mark’s investment function. Thus, the use by a
competitor of a sign identical to the trade mark in relation to identical goods
or services has an adverse effect on that function where that use substantially
interferes with the proprietor’s use of its trade mark to acquire or preserve a
reputation capable of attracting consumers and retaining their loyalty. In a
situation in which the trade mark already enjoys a reputation, the investment
function is adversely affected where such use affects that reputation and
thereby jeopardises its maintenance.”
o
“It cannot be accepted that the proprietor of a
trade mark may prevent such use by a competitor if the only consequence of that
use is to oblige the proprietor of the trade mark to adapt its efforts to
acquire or preserve a reputation capable of attracting consumers and retaining
their loyalty.”
o
“Where the advertisement displayed on the
internet on the basis of a keyword corresponding to a trade mark with a
reputation puts forward an alternative to the goods or services of the proprietor
of the trade mark with a reputation – without offering a mere imitation of the
goods or services of the proprietor of that trade mark, without causing
dilution of the trade mark or detriment to its repute (tarnishment) and
without, moreover, adversely affecting the functions of the trade mark – such
use falls, as a rule, within the ambit of fair competition in the sector for
the goods or services concerned.”
Perusing these cited text from the press release, it can be
observed that, for the first time, any court across world has first time ever
opined on the matter whether trademarks can be used as searchable keywords on
search engines for triggering advertisements.
Conclusion
Thus after a long period of uncertainty and inconsistency in
the judgments in the last decade about the issue, courts made their stand
clear. That use of trademarks as searchable keyword for triggering
advertisements is not trademark infringement, or unfair use. Even if any wrong
is done by the advertisers in process, then only the advertisers are liable to
be sued, not the search engine operators, unless there is active involvement is
proved on the part of the search engines.
Courts held that, this way of
advertising is in consonance with the welfare of the customers, and fostering
of competition in the market. The contention that goodwill and reputation of
marketers are free-ridden by making such use of trademarks is also rendered
futile as the court was clear to assert that that the goodwill and reputation
are taken care by the natural search results on the search engine.
On the same hand court also provided the chance of fair
trial to each plaintiff so coming in future by declaring that in future such
cases should be dealt on case by case basis by the courts, and the degree of
wrong being should be ascertained on case by case basis based on the facts of
the cases.
[1] “Initial interest confusion occurs
when the defendant uses the plaintiff’s trademark in a manner calculated to capture
initial consumer attention, even though no actual sale is finally completed as
a result of the confusion.” Interstellar
Starship Services, Ltd. v. Epix Inc., 304 F. 3d 936, 941 (9th Cir. 2002)
[2] Google France Sarl v Louis Vuitton Malletier SA, [2010]
R.P.C. 19
[3] Government Employees Insurance Co. (GEICO)
v. Google, Inc., 330 F.Supp.2d 700
[4] Government Employees Insurance Co. (GEICO)
v. Google, Inc., 330 F.Supp.2d 700
[5] Storus Corp. v.
Aroa Marketing Inc., [2008]
WL 449835.
[6]
See the image rendered in section How it
works?
[7] Google France Sarl v Louis Vuitton
Malletier SA, [2010] R.P.C. 19
[8]LVMH stands for Moët Hennessy • Louis
Vuitton, which is group of various luxury brands in EU.
[9] Supra, n 2
[10] O2 Holdings Ltd v Hutchison 3G Ltd, [2008] R.P.C. 33
[11] Consim Info Pvt. Ltd. v Google India Pvt. Ltd., People Interactive Pvt. Ltd. , Jeevansathi Internet Services Pvt. Ltd.
and Times Business Solutions Ltd., MANU/TN/2523/2009.
[12] Consim Info Pvt. Ltd. v Google India Pvt.
Ltd. and Ors, MANU/TN/1816/2010.
[13] Interflora Inc., Interflora British Unit v.
Marks & Spencer plc, Flowers Direct, [2010] EWHC 925 (Ch)
[14] Court of Justice of the European Union,
Press Release No. 97/11, Luxembourg, 22 September 2011
