The “Initial Interest Confusion” Doctrine in Indian E-Commerce

Introduction

With the e-commerce and online marketing business growing manifold, trademark protection in India is entering a new phase. Unlike conventional brick-and-mortar businesses, search engine rankings and keywords are the backbone of the e-commerce business space. Such a cyber world brings to the center stage the law of Initial Interest Confusion (IIC) – where a consumer may be misled by the abuse of a trademark as an initial search function, despite the fact that such confusion is resolved before the transaction is finalized. Although this doctrine is deeply rooted in American law, Indian Courts are gradually warming up to accepting its contours in trademark cases originating from cyber marketplace.

This Blog is a critical examination of the legal basis, judicial inclination, and operational implications of the IIC doctrine in Indian trademark law, especially in the ambit of the Trade Marks Act and the relevant precedents.

The Concept of Initial Interest Confusion: An Overview

Initial Interest Confusion occurs when a buyer’s initial interest or attention is caused by misleading use of another rival’s trademark. The buyer may realize the distinction later and not buy, but the diversion in itself is actionable as it unfairly benefits at the expense of the trademark owner’s goodwill.

In its traditional statement, the U.S. in the case of Brookfield Communication, Inc. v. west Coast Entertainment Corp., the appellate court, held that use of the trademark “MovieBuff” as meta-tags by a competitor was infringement, as it generated initial interest confusion–though no one consumer was ever misled at point of purchase. The reasoning is that wrongful attraction unfairly competes with attention from consumers, something in e-commerce spaces is a scarce asset.

Statutory Provisions of India

According to the Trade Marks Act, the primary provisions that relate to confusion of consumers are:

• Section 29(1) – Prohibits unauthorized use of identical trademarks.
• Section 29(2)(b) – Includes infringement by use of identical marks that lead to a possibility of confusion among the public.
• Section 29(4) – If a trademark has an outstanding track record in India, it protects identical goods and services.

Even though the Act does not contain the doctrine of IIC, judicial interpretations of “likelihood of confusion” provide an opening for invoking it.

For unregistered marks, common law action of passing off grant’s protection to business goodwill, targeting misrepresentation culminating in deception or loss to consumers.

Case Law Analysis: Glimmer of IIC in Indian Jurisprudence

Indian courts have not directly declared the IIC doctrine as enunciated in the U.S., but certain judgments reflect is implicit use, particularly in domain names, keyword advertising, and internet misleading.

• Consim info Pvt. Ltd. v. Google India Pvt. Ltd.,

In this case, the complainant, which owned a range of matrimonial websites like BharatMatrimony.com, TamilMatrimony.com, and TeluguMatrimony.com, accused the respondent of allowing its rivals to bid on its trade marks as AdWords keywords. Consequently, if individuals searched for these terms, they were redirected to sponsored links that led to competing services. The Madras High Court addressed whether the said usage would amount to passing off and trademark infringement. The Court identified that the customers may be confused at the start of the search process, although they are aware of what the site ultimately is. It observed that the business on trademark goodwill may cause confusion within the mind of the public and be considered passing off. The court did not strictly hold the term ‘initial interest confusion’, but reasoning was exactly in harmony with its spirit, viz., fraudulent diversion of user attention, however fleeting in nature, can have legal consequences.

• DRS Logistics v. Google India Pvt. Ltd.,

The Court ruled that whether the use of the trademark “Agarwal Packers and Movers” as a key word on Google AdWords was trademark infringement. The plaintiff, being a leading logistics company, complained that their mark has been used by competitors to advertise similar services and hence direct prospective customers. Court decided that bidding on a mark as a key word by itself, absent deceptive use in ad copy, was not infringement per se. And yet it drew a distinction between permissive and non-permissive use, adopting the position that wherever sponsored links gave rise to a likelihood of confusion or led consumers to think that there was an association with the owner of the trademark, the use could actually be said to be infringing. The Court emphasized that even if the confusion were only at the nascent stage, when the consumer was being drawn in to click on the ad, that by itself may cause reputational damage and goodwill misappropriation. That concession shows the judiciary’s growing acceptability towards initial interest confusion theory.

The Doctrine’s Practical Application in Indian Internet Commerce

In India’s virtual sphere, where success on the Internet equals success in business, enforcement of trademarks must adapt. These websites utilize algorithmic and ad placement techniques that are vulnerable to manipulation through trademark abuse.

Current IIC-generating practices are:

• Keyword Bidding – Shelling out for a rival’s trademark as a key word in an online search.
• Meta-Tagging – Placing famous marks in the site’s back-end to augment search rankings.
• Misleading domain names and URLs – Creating websites with near names but look-alike sites to mislead consumers.
• Comparative Advertising – Suggesting false association or party with a product that is trademarked.

Such acts have the potential to deceive customers prior to a transaction being completed, weakening the trademark’s uniqueness.

Comparative Jurisprudence

A comparative analysis worldwide warrants India’s realization to anticipate IIC by de jure recognition.

• United States– Brookfield’s Ninth Circuit and more recently Playboy v. Netscape, consistently held that transitory confusion has legal significance.
• European Union– In the case of Interflora Inc. v. Marks & Spencer plc, a test of unfair advantage and dilution was used by the court, thereby protecting brand identity against keyword misappropriation.
• Canada– The courts have been conservative, requiring close but not excluding IIC nexus of harm and confusion.

These courts observe that consumer confusion does not need to persist to buy in order to be enforceable, especially where initial diversion unjustifiably takes advantage of brand fame.

Critique and Counter-arguments

The IIC doctrine, in spite of its utilities, has criticisms against it. For some it is overarching and extends trademark protection too far, tending to kill comparative and reference advertisements, other cite the complexity in proving initial confusion per se without ultimate deception. Regardless, Indian jurisprudence is taking gradual cautious steps to achieve an equilibrium – brand security vis-à-vis competitive marketplace.

Recommendations for Indian Courts and Legislators

Judicial clarification through clear acknowledgment of IIC in court rulings will minimize confusion. Provisions on digital and initial confusion can be included in amendments to the Trade Marks Act. The courts should also accept the digital evidence such as analytics, surveys, and clickstream data. There is also the need to have extra judicial training on digital IP infringement trends.

Conclusion

While the Initial Interest Confusion doctrine does not have statutory force in India, its precepts are being recognized by courts in e-commerce litigations. As digital interactions grow, formal adoption of IIC will strengthen enforcement of trademarks and maintain consumer confidence.

There is need to have a harmonized legal system, judicial activism and industry awareness in order to deter fraudulent digital marketing. So far, development via case laws is the most appropriate path to take in the enforcement of rights against misleading practices.

Author:– Ram Gopal Bhardwaj,  in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

References

1. Trade Marks Act, 1999 (Act No. 47 of 1999), India Code, https://www.indiacode.nic.in/bitstream/123456789/1999/1/A1999-47.pdf.
2. Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036.
3. Consim Info Pvt. Ltd. v. Google India Pvt. Ltd. & Ors., (2013) 54 PTC 578.
4. DRS Logistics (P) Ltd. v. Google India Pvt. Ltd. & Ors., 2021 SCC OnLine Del 5767.
5. Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020.
6. Interflora Inc. & Anr. v. Marks and Spencer plc, [2014] EWCA Civ 1403.
7. Google Ads Trademark Policy (Updated 2024), Google Support, https://support.google.com/adspolicy/answer/6118.
8. People Interactive (I) Pvt. Ltd. v. Gaurav Jerry & Ors., 2014 SCC OnLine Bom 868.
9. Christian Louboutin SAS v. Nakul Bajaj & Ors., (2018) 253 DLT 728.
10. Mattell Inc. & Ors. v. Aman Vij & Ors., 2017 SCC OnLine Del 11003.
11. European Union Trade Mark Regulation (EU) 2017/1001 – Recital 16 & Article 9(2), Official Journal of the European Union, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32017R1001.
12. Law Commission of India, 253rd Report on Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015, https://lawcommissionofindia.nic.in/reports/Report_No.253_Commercial_Division.pdf.