How Third Party Trademarks in Keywords Can Lead to Trademark Infringement

The growth of businesses promoting their products online has skyrocketed in recent years. However, this surge has also led to a rise in intellectual property (IP) disputes. Companies using third-party trademarks as keywords in search engine ads often cause consumer confusion and harm trademark owners’ traffic. Businesses often engage in this practice to capitalize on the reputation and goodwill of established brands. Google Ads is often misused by businesses bidding on third-party trademarks as keywords, affecting trademark owners’ brand visibility. This misuse has led to trademark infringement litigations worldwide.

This article explores the Google Ads program, how trademark infringement happens through keywords in online ads, the legal implications for search engines, and key case studies that highlight the importance of trademark monitoring.

Understanding Google Ads Program 

Google Ads (formerly Google AdWords) enables businesses to advertise products and services online by bidding on specific keywords. When users enter a search term in the Google search bar, the engine presents the most relevant results according to its algorithm. Advertisers can bid on keywords so that their ads appear as sponsored links in search results. Google Ads operates on a pay-per-click (PPC) model, where advertisers pay Google every time a user clicks on their ad.

While Google Ads helps businesses reach customers, it also opens doors for third-party misuse of trademarks, leading to trademark infringement issues. Let’s delve into how such infringements occur in online advertising.

Infringement Through Trademarks Used as Keywords

A company using third party trademarks to divert web traffic to its website can severely destroy the original brand’s reputation in the market. Moreover, it is quite easy and lucrative to misuse third party trademarks online. Let us understand this with an example. Suppose a user wishes to purchase the latest mobile phone but is unfamiliar with the brand’s official website. He will visit the search engine and punch in specific keywords in the search bar. The search engine will present natural search results along with the sponsored links of advertisers bidding on the search terms entered by the user. Trademark law ascertains whether advertising using registered trademarks as keywords amounts to infringement or not.

Google allows third parties to use trademarks in ad wording, provided they use them lawfully. However, there are some differences in the level of restrictions in different geographical regions. In general, there are ways to use third party trademarks in online ads correctly. For instance, resellers offering a branded product online can use a trademark in their advertising copy.

Moreover, business affiliates and partners can use trademarks in the ad copy. The trademark owner can permit licensees to use the registered trademark for advertising through Google Ads. The advertiser can submit a form to Google stating that the owner has consented for authorized partners to use the brand names online. The trademark owner can also notify Google if they choose to revoke the license. However, if the partner agreement restricts the use of trademarks, then it is the responsibility of the trademark owner to enforce this restriction. Google does not involve itself in trademark infringement cases between other entities.

The next section highlights a few examples of the usage of trademarks as keywords for advertisements.

Examples of Trademarks Used as Keywords in Advertisements

Informational websites can legally use a trademark or brand name when publishing reviews or product details about a particular brand. For example, Tupperware® partners can advertise and sell products using the Tupperware name. However, if a trademark infringes on the trademark owner’s rights, one can file a complaint with Google to remove the ad, a process that typically takes six to nine weeks. It’s advisable to consult legal experts for further protection steps, both online and offline.

Sellers often use specific trademarked terms or generic keywords as search engine advertisement keywords. For instance, a shoe seller might use terms like ‘footwear’ or ‘sports shoes’ to advertise. These keywords can be generic or descriptive terms, which are often also registered trademarks. While businesses can freely use some generic terms as keywords, unauthorized use of specific trademarked terms can lead to infringement. A notable example is when Matrimony.com filed a case in 2019 against Google for allowing other matrimonial services to use its registered trademarks, like regional names combined with ‘matrimony,’ such as “Telugu matrimony” or “Punjabi matrimony.” The court ruled in favor of Google, noting that the plaintiff used similar keywords and paid for ads. Therefore, owning a registered trademark for generic terms does not automatically entitle one to prevent others from using them as keywords.

Using another company’s name in an ad is called piggybacking, where businesses capitalize on a competitor’s reputation. Courts typically don’t hold search engines liable for ads using third-party trademarks unless there’s a “likelihood of confusion.” The Delhi High Court recently ruled in favor of a trademark owner in such a case, emphasizing that confusion must be established for the case to succeed. Google profits from these ads, leading to lawsuits from brand owners against both the search engine and third-party advertisers.

Likelihood of Confusion

The essential function of trademark law is to secure the real identity and origin of any good or service. It provides statutory protection to specific goods and services and distinguishes them from other goods and services. The statute defines what constitutes trademark infringement and prohibits the use of any deceptively similar mark that “is likely to confuse.” Thus, the likelihood of confusion is instrumental in determining whether a trademark violation has taken place or not. This aspect of trademark law is significant because there is no uniform standard concerning trademark violations through the use of third party trademarks as keywords in online advertisements. Therefore, the existing problem concerning keywords is whether it has all the essential elements of trademark violations. 

One crucial factor in determining whether third parties should use registered trademarks as keywords is how this usage affects consumer behavior. The Indian courts have established on multiple occasions that an Indian customer is a layman. Therefore, using a trademarked term as a keyword can confuse consumers, as they may see ads with third-party trademarks. Consumers could believe these ads are from or sponsored by the trademark owner. Hence, it becomes essential for third parties to prohibit such keyword linking in ads.

To further our understanding, let us take a look at some recent cases involving the use of third party trademarks in online advertisements.

Case Study: Veraz vs. Open Discovery SA

On May 4, 2018, the Division III of the Federal Court of Appeals in Argentina delivered a landmark decision regarding the use of third party trademarks. One of the key elements in the case was the behavior of the defendant (Open Discovery). The defendant used the plaintiff’s widely known trademark “VERAZ” as a keyword to appear on the internet via the advertisement for customers searching specifically for the plaintiff’s trademark.

The decision by the court: In the court’s decision, the act of excessive usage of the trademark was seen as unfair competition. The court issued a resolution, establishing that such behavior amounts to undue use of trademarks as well as an act of unfair competition. Hence, the court awarded substantial damages to the plaintiff for the unfair use of its trademark.

Case Study: Teve Compras vs. Sprayette & Google

In 2020, Teve Compras filed a complaint against Sprayette and Google, claiming that whenever a user searched for “Teve Compras” on Google, a sponsored link by Sprayette would pop up through Google Ads. The plaintiff regarded this as excessive use of the registered trademark that took advantage of the prestige and diverted its customers to another website.

The decision of the court: The court said that terms like “TV,” “Teve,” and “Compras” (parts of the plaintiff’s trademark) were commonly used words and were describing activities of both the defendant and the plaintiff. Hence, it rejected the complaint.

Through the decision of the court on both of these cases, we comprehend that unfair use of registered trademarks to take advantage of a brand’s reputation amongst consumers can be trademark infringement. However, companies have the right to advertise using generic terms even when they may be registered as a trademark by a competitor.

Now, an important question arises – can search engines like Google that allow businesses to advertise products and services using third party trademarks be held liable for their part in trademark infringement? The next section delves into the same.

Can Search engines like Google be held liable?

Google has often defended itself by claiming it operates merely as a platform for users to search and for businesses to advertise their products and services. It asserts that advertisers, not Google, make all decisions regarding digital ads on its Google Ads platform. The platform follows the highest bid and delivers the ads as per the program’s structure.

However, the Delhi High Court questioned Google’s policy, pointing out that it treats India differently from EU countries when it comes to trademark use in ads. The issue arose when third-party businesses used trademarks as keywords in their ads, diverting traffic from the trademark owners’ websites to third-party sites.

In the 2021 case of M/S DRS Logistics (owners of Agarwal Packers and Movers) vs. Google India, Justice V. Kameswar Rao said, “The third party is taking advantage of the trademark owner’s reputation for their own benefit, and Google is making money from this, so Google is also responsible for what the advertiser does.”

DRS Logistics claimed that multiple third-party businesses utilized Google’s services to display infringing adverts when a user types “Agarwal Packers & Movers” into a search engine.

The court looked at Google’s policy and found that while Google controls trademark usage in ads in the EU, it does not do the same in India. The judge pointed out that Google should follow the same rules in India as it does in the EU, where internet literacy is higher, to ensure fairness and prevent confusion.

“It is clear from Google’s EU and EFTA (European Free Trade Association) policy that Google provides a higher duty of care in a jurisdiction where large portions of the population are internet literate. This aspect further fortifies my finding as to why such a policy should be followed in India,” said Justice Rao.

Conclusion

Online trademark infringement has become rampant during these digital times. All companies must protect their trademarks online to safeguard their business as well as their reputation in the marketplace. Prolonged unauthorized use of a trademark can weaken the trademark owner’s claim over the mark. There are numerous tools that can help monitor the online use of trademarks and identify threats from competitors to minimize the risk of trademark infringement. Therefore, trademark monitoring plays a key role, so it’s important to engage a trademark monitoring expert.

Protect your trademark from online misuse today! Learn more about our comprehensive trademark monitoring service and safeguard your brand’s reputation. Contact us today and start your journey.

– Maitrayee Sinha, Akash Dudhwa (IP Filing and Prosecution) and the Editorial Team

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