Use of Third-Party Trademarks as Keywords in Online Advertisements
The number of businesses promoting their products online has increased dramatically in the past few years. But this rapid growth has also led to a spike in IP-related disputes among companies. These conflicts often arise when businesses promote their products or services on search engines using registered trademarks of a third-party, leading to a loss in web traffic and business for respective trademark owners. Companies indulge in it to benefit from the reputation and goodwill of an established brand. Google Ads, a popular tool for advertising on the Google Search results page, is often misused by businesses who advertise products and services by using third-party trademarks as their keywords. This has led to trademark infringement litigations all over the world.
In this article, we will first understand the Google Ads program, the role it plays in keyword trademark infringement, liability of search engines, and a couple of case studies that emphasize on the need for trademark monitoring.
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Understanding Google Ads Program
Google Ads (formerly known as Google AdWords) is a program that helps businesses advertise products and services online using specific keywords. When an internet user inputs a phrase or keyword in the Google search bar, the search engine generates the most relevant results according to the algorithm. Businesses can bid to appear as sponsored results/links for specific search terms or phrases, also known as keywords. Google Ads operates on a pay-for-placements basis only. Every word or keyword receives numerous bids. Based on various parameters, the program establishes the placement of various ads created by advertisers. The advertiser pays a fixed amount to Google each time an internet user clicks on the sponsored link.
Let us now cover how keyword trademark infringement takes place in online advertisements.
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 utilize trademarks in the wordings of an advert, given that they are lawfully utilized. 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. A form can be submitted to Google by the advertiser stating that the owner has consent 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 get involved in cases of trademark infringement 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 utilize a trademark or brand name when publishing a review or product details of particular goods or services offered by a particular brand. For example, the partners of Tupperware® can advertise and sell its products online by using the Tupperware brand name.
One can file a complaint and appeal to Google to remove the ad if a trademark infringes the trademark owner’s rights. This process takes around six to nine weeks. One can contact a lawyer for advice on other steps to protect the brand online or offline.
There are several instances where sellers have chosen specific generic terms or particular trademarked terms as keywords. For example – a seller has a shoe-selling business and wants to advertise his shoes on Google. For the same, he will create an online advertisement with an appropriate ad title and text and bid on a specific keyword to show the ad on the Google Search results page. The seller can bid on a generic or descriptive keyword for shoes such as ‘footwear,’ ‘sports shoes,’ ‘running,’ ‘gym,’ etc.
In many instances, the generic or descriptive terms used as keywords are registered trademarks for particular goods and services. These terms can be used easily as keywords. In other circumstances, its unauthorized use would lead to trademark infringement. Still, in the present scenario, due to the keywords’ descriptive or generic nature, one cannot stop other entities from using these terms to describe and advertise their goods and services. Take, for example, the case of Matrimony.com that took place in 2019.
Matrimony.com Limited filed a case to restrain other matrimonial companies from using Telugu, Tamil, Kerala, Kannada, Gujarati, Punjabi, Bengali, Marathi, Christian, and Sindhi together with phrases like matrimony or matrimonial as keywords for SEO. Matrimony.com was the registered trademark owner of several generic terms. Google India Pvt. Ltd. was accused of using trademarks belonging to Matrimony.com as keywords for advertising other websites offering matrimonial services. Nonetheless, the court held in favor of Google. The judge remarked, “it is also relevant to point out that the plaintiff, though holding a registered trademark, have also used them as keywords and paid Google for advertisements…such being the position, the mere registration of the trademark of the generic words, in my view, will not entitle the plaintiff to get an order of injunction.”
Using another company’s name in an advertisement is also known as piggybacking. Companies often use it to unfairly ride off the goodwill and reputation of their competitors’ businesses by creating confusion in the customers’ mind. The courts, however, have mostly refrained from holding the search engines liable for allowing advertisements on third-party trademarks. Nevertheless, the Delhi High Court recently ruled in favor of the aggrieved third party while holding the search engine accountable. An important note to make here is that “likeliness of confusion” must be established for a ruling in favor of the trademark owner. We will discuss the “likelihood of confusion” in keyword advertisements in a later section.
There is one more side to this issue of trademark infringement. Google makes a profit every time a user clicks on an ad on a search engine results page. Thus, it is making money out of infringement on the rights of the trademarks’ owners. This causes the brand owners to sue both the search engine selling the keywords and the third parties bidding and purchasing.
In the next section, we will talk about the importance of the likelihood of confusion in a trademark infringement case.
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 dimension to whether third parties should be allowed to use registered trademarks as keywords is how such usage affects consumer behavior. The Indian courts have established on multiple occasions that an Indian customer is a layman. Therefore, when a trademarked term is used as a keyword, it is safe to assume that the consumers can become confused by advertisements that use third-party trademarks as keywords. They can believe that such advertisements originate from or are 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, substantial damages were awarded 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?
In its defense, Google has often taken shelter under the umbrella of intermediaries’ benefits. It emphasizes that it is merely a platform for internet users to search and businesses to advertise their products and services. Moreover, it has attempted to establish that all the decisions that go into formulating a digital ad through Google Ads are taken solely and entirely by the sellers, and the program has no say in it. It simply follows the highest bid and renders the services curated under the program.
The Delhi High Court questioned Google on equality in its policy for India, against the EU countries. This was based upon investigating cases that involved the use of trademark as a keyword on its platform by third parties, that resulted in traffic diversion from the trademark owners’ website to platforms belonging to third parties.
“In a way the [third party] advertiser through oblique motives is cashing upon the goodwill of the trademark owner for his own benefit and through which process Google is earning revenue and as such is equally liable for the omissions and commissions of the advertiser,” said Justice V. Kameswar Rao while adjudicating M/S DRS Logistics (P) Ltd (owners of Agarwal Packers and Movers) Vs. Google India Pvt. Ltd. in 2021.
DRS Logistics claimed that multiple third-party businesses utilize Google’s services to display their infringing adverts when a user types “Agarwal Packers & Movers” into a search engine.
The court analyzed Google policy and noted that while the conglomerate looked into the use of the trademark as a keyword, this was limited to the EU. “It is unclear that on what basis a distinction has been drawn by Google between certain countries with regard to the trademark policies so formulated and followed,” said the court.
“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.
Online trademark infringement has become rampant during these digital times. All companies must protect their trademarks online to safeguard their business as well as 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. However, trademark monitoring is a critical task, and it is advised to utilize the services of a trademark monitoring expert.
Sagacious IP is one of the world’s leading IP research and consulting companies, offering a wide range of services for companies, law firms, inventors, and more. Its trademark monitoring service can help you keep a check on the unfair and unauthorized use of your trademarks. Visit our service page to know more about trademark monitoring service.
– Maitrayee Sinha, Akash Dudhwa (IP Filing and Prosecution) and the Editorial Team