In this day and age, internet is a powerful tool for advertising with limitless reach and keyword advertising is the most popular form of digital advertising. It has generated massive revenue streams for search engines offering the service, for instance, Google’s ad revenue amounted to US dollars 146 billion and majority of the advertising revenue came from keyword advertising.

Google AdWords, Google’s flagship program that facilitates keyword advertising is no stranger to legal controversies. Recently, the Delhi High Court directed Google to suspend the advertising account belonging to, a travel booking site for bidding and adopting MakeMyTrip’s marks as keywords through Google’s AdWords Programme.

What are Keywords?

Business vector created by vectorjuice

Keywords are words, phrases, numbers, or symbols used as search strings by the user in a search engine. Search engines such as Bing or Google, through Bing Ads and Google AdWords respectively, allow advertisers to sponsor any keyword which will then trigger their advertisements when a user employs it as a search string. This sponsoring process is called bidding for keywords and in the event, multiple users bid for the same keyword, the highest bidder has his sponsored advertisements/links appear beside the organic results that were generated by the algorithm in response to the search string on the engine. This form of advertising enables the advertiser to directly focus on the target audience who are already interested in the services related to the keywords and the higher placement of the advertisement makes it easier for the user to click and access the advertisement. Moreover, the search engines profit every time a sponsored advertisement/link is accessed by a user.

When does a Potential Issue Arise?

It is pertinent to note that these keywords can either be generic terms like “red bag” or trademarks such as “Louis Vuitton” and the issue arises when the latter is bid for. The mechanism allows for third parties to bid on their competitor’s trademarks thereby ensuring search visibility for their advertisements as they are displayed above or alongside the organic results containing the competitor’s links and products. For instance, HappyEasyGo could have bid for words such as ‘trip’, ‘travel’ or any location which would effectively allow them to showcase their travel advertisements to users searching for those results but it was their conscious choice to bid for ‘MakeMyTrip’ which is a trademark belonging to MakeMyTrip exclusively for their business activities. Thus, it can be argued that this practice allows for third parties to unfairly profit off certain marks and their reputation.

Yet another issue that simultaneously prevails is whether Google’s practice of selling trademarked terms to third parties and profiting off these transactions infringe the rights of the registered proprietors of the trademarks. This leads to registered proprietors of the marks suing both the search engine that sells the marks and the third parties that are bidding and purchasing the same.

The Trade Marks Act, 1999:

Section 29 of the Act clearly states that infringement occurs when a person not being a registered proprietor uses in course of trade, a mark identical or deceptively similar in relation to goods or services in respect of which the trademark is registered. In order to effectively determine infringement, it must be established that the mark has been used in the course of trade by both the search engine and the third-party advertiser.

The law surrounding third parties bidding on trademarks has been settled by way of many injunctions as seen in Make My Trip (India) Private Limited v. Happy Easy Go India Private Limited [CS(COMM) 916/2018], in which the Court has explicitly asked the search engines to suspend the advertising accounts of the infringing party. For instance, Google’s advertising policy states that it takes intellectual property violations seriously and it allows for registered trademark owners to raise complaints against such keyword advertisements. It is understood that third parties intend to redirect the customers from the actual goods and services offered under the trademarked keyword to goods and services offered by them through the sponsored advertisements/links. Furthermore, there is a reasonable confusion that occurs in the minds of a consumer as to which product is the actual product and the confusion exists between the sponsored link and the organic results. Usage of trademarks for the purpose of advertisements without authorisation from the rightful owner could be argued to be a violation of Section 29(7) of the Act.

It’s trickier to determine the liability of search engines in such matters as seen in the case Consim India Pvt Ltd v. Google India Pvt Ltd [2013 (54) PTC 578 (Mad)], where it was alleged that Google committed contributory infringement and the determination of liability hinged on the aspect of use according to Sections 2(2)(b) and (c) of the Act. It was held that Google had not infringed on the rights of the trademark proprietor but this decision was based on the descriptive nature of the subject marks which did not allow for substitutions. Hence, Google’s practice was declared to be an honest practice.

Likely Evolution of Keyword Advertising

Therefore, the law surrounding the usage of trademarks as keywords is grey especially when it comes to determining the liability of the search engines such as Google. The subject marks in the Consim case were too descriptive for the Court to pin any kind of liability on the search engine and in order to do so, the interpretation of ‘use’ of trademarks must be broadened.  Presently, traditional form of advertising is digital advertising and advertising on keywords is going to evolve further which mandates an effective recourse for the proprietors to secure their rights.

This article has been authored by Subhikssha K.