Initial Interest Confusion Doctrine In Digital Advertising

INTRODUCTION

With the advent of major E-commerce platforms and companies, customers have now shifted their focus from traditional market shopping to virtual shopping. This enables the customers look for multiple products belonging to multiple brands. The brand's overall market presence and overall popularity is dependent upon the positioning of itself on e-commerce platforms. Certain logos, designs, marks are key basis of identification of a brand. A customer basically searches for multiple products, however, is always inclined towards a single brand which he trusts. This, however, creates opportunities for domain squatters to make use of a brand's reputation and value. It is in such circumstances where doctrine of initial interest confusion comes to play.

Initial Interest Confusion is a circumstance that arises when a consumer's focus has been deceptively directed to a product by a brand through SEO manipulation, keyword bidding or look-alike domain names. This fraudulent means used to lure the consumer is what brings on liability, not the actual purchase. New avenues for trademark abuse arose when online advertising progressed from simple pop-ups and banner ads to complex algorithms and targeted marketing.¹ Companies make big-time investments to capture the "Initial Interest" of a consumer which is what leads them to make purchasing decisions. However, it is essential to assess the strategies used by the advertisers to ensure that they are making use of legally permitted competing methods.

UNDERSTANDING THE DOCTRINE

The Doctrine of Initial Interest Confusion (IIC) pertains to a type of trademark confusion that occurs at the initial moment that a consumer sees a mark, long before any transaction takes place. In contrast to conventional trademark confusion, which assesses if the consumer is misled during the purchase process, this doctrine emphasizes on the initial phase of attention or interest. In the current digital marketplace, where customers frequently start their purchasing journey with online searches, such impressions can greatly impact consumer behaviour.

Initial Interest Confusion simply aims to stop such unjust diversion. Take for example, a customer searching for "Brand ABC" who ends up seeing an advertisement for "Brand XYZ" because Brand XYZ has made a bid on the keyword appearing in relation to Brand X. It is not relevant if the distinction has come to notice of the buyer prior to the purchase, if it has already unjustly captured their attention. Initial Interest Confusion differs significantly from traditional methods wherein the misleading takes place during the actual transaction. Courts in India have repeatedly clarified that this accountability arises even if the customer has come to know of the truth.

In the landmark case of Grotrian, Helfferich, Schulz v. Steinway & Sons ², the buyers had believed the "Steinweg pianos" to be connected to "Steinway", however upon realisation of the difference, they did not purchase them. It was held that the initial influence made on the consumer was an infringement and could lead to the goodwill of the original brand being damaged. By clarifying uncertainties at the initial point of interest, Initial Interest Confusion safeguards trademark holders from rivals attempting to misleadingly divert focus. In a digitalcentric economy, where attention is valuable and initial perceptions frequently influence consumer decisions, this principle is essential for ensuring fair competition and protecting brand identity.

RELEVANCE IN THE ERA OF DIGITAL ADVERTISING

Advertising and Marketing have always been key in commercialisation of a brand. In the digital era, products and services are made easily accessible by a single click. Brands hire teams filled with people responsible for advertisement. Great efforts are made to pick and choose the most perfect strategy to attract consumers. Be it catchy tag lines, hashtags, logos, attractive ads on social media platforms, or hiring influencers they all require effort to make and protect.

Google Ads in particular operate through an auction-based system where advertisers bid on keywords relevant to their products or services. When a user enters a search query matching those keywords, Google's algorithm ranks ads based on bid amount, ad quality, and relevance, displaying the highest-ranking ones above organic results. This pay-per-click model charges advertisers only when users click the ad ³

However, such an auction-based system comes with multiple flaws. Bidding on a trademark in Google Ads becomes particularly harmful when it creates a likelihood that consumers will initially believe the ad comes from the trademark owner, diverting traffic before users realize the source. Thus, triggering the doctrine of initial interest. In the Rescuecom Corp. v. Google⁴ case, Google Ads allowed competitors to bid on the trademark "Rescuecom," causing their advertisements to appear prominently when users searched for the brand. This created initial interest confusion as consumers momentarily associated the ads with the legitimate company, diverting clicks before realizing the source. The United States Court of Appeals for the Second Circuit found this actionable under trademark law, emphasizing that even brief confusion suffices to harm goodwill.

Legitimate use occurs when the bid triggers ads that do not display the competitor's mark and include prominent disclosures like "not affiliated with [brand]," or target comparative advertising that truthfully highlights differences without misleading users.⁵

Other examples that expose a plethora of infringement of intellectual property right through digital advertising is typo-squatting and lookalike app icons. Typo-squatting registers domain names mimicking popular ones through common misspellings, such as "amaz0n.com" instead of "amazon.com" or "flipcart.com" for "flipkart.com," to exploit typing errors. These sites divert traffic by trading on initial confusion, often displaying lookalike designs or ads before redirecting or selling counterfeits. Users arriving via misspellings experience initial confusion, believing they reached the real brand, only to encounter redirects or counterfeit offerings. Such a practice not only diverts customers but also has anti-trust implications.⁶

Counterfeit apps replicate icons, layouts of Uber or Spotify, using near-identical designs to appear in relevant searches. These apps attempt to ride on the goodwill of well-established brands. Consumers are thus drawn by visual familiarity and often mistake them for official updates or alternatives. Thus, triggering doctrine of initial interest confusion. The abuse and counterfeit of apps beyond luring consumers and infringement of intellectual property rights also skewes the dimensions in market and competition.

LEGAL POSITION IN INDIA

The Doctrine of Initial Interest Confusion is still in its nascent phase of development in India. Indian jurisprudence and Indian judicial developments still has a long way to go in comparison to America. The Trademark Act, 1999 does not include the phrase or make an explicit section for the doctrine. The provisions relating to trademark infringement and passing off have protected registered and unregistered trademarks for decades. However, no provision is carved out for protection against "initial interest confusion."

Firstly, the Division Bench of Delhi High Court decided Kapil Wadhwa v. Samsung Electronics ruled on the pertinent issue of tagging of website. In this case, Kapil Wadhwa and others were importing products of the Respondent company in India without their permission or consent of the rightful proprietor. These products were imported for the purpose of sale and moreover, the same were sold at a cheaper rate than that of the proprietor. The Respondent entity had filed a case for infringement of trademark under section 29 and 30 of the Trademark Act, 1999. The Appellant was not only selling the products at a discounted rated on their website but were also tagging the website of Respondents. Such tagging would cause an unaware consumer to believe that the website of the Appellant is legitimate and the sale of products is authorised, true, and directly from Samsung. It is also pertinent to note that the products sold by the Appellant and Respondent were not the same. Through the tagging of Respondent website, a consumer is deceived into and mislead to clicking on the website of Appellant selling unauthorised goods. Moreover, the lower rates further lure customers into purchasing goods of the Appellant over the Respondent. This thus, triggering doctrine of initial confusion. The Appellants argued that tagging on website came within the ambit of fair use. However, the Single Judge Bench held that the act of import and sale in itself was unauthorised and an infringement so the idea of "fair use" does not occur. This was reaffirmed in the Division Bench ruling.

Secondly, Madras High Court laid to rest the issue of using trademarks as ad words. In the case of Consim Info Private Limited v. Google India Private Limited, the Appellant is a company engaged in the business of matrimonial services through their website. The Appellant had trademarked various words like "Bharatmatrimony" "Tamil matrimony" "Assamese matrimony". Whereas, the Respondent company used some of the trademarked words in adwords or keyword suggestion tools to aid internet search/browsing. It was the case of the Appellant that use of trademarked words in AdWords or keyword suggestions would divert business. Moreover, it was argued that an advertisement that is a result of a google search which included their trademarked terms would make a person believe that such advertisements are connected to their business. Thus, this would create confusion in the mind of consumers. The Court ruled that terms such as "Tamil" "Gujarati" "Muslim" were "generic" and "descriptive" and merely indicative of one's identity. Moreover, the Respondents had been making active efforts to protect infringement. Thus, the use of trademarked terms in AdWords would thus not amount to infringement.

REFORMS AND FUTURE CHALLENGES.

There are certain reforms necessary with respect to the doctrine of initial interest confusion in digital advertising. Courts just use it as a way of tracking down for infringement, while not focusing on actual loss that brands suffer in terms of money as well a reputation. Most people surfing web nowadays get carried away by sponsored links. Brands and big MNCs who advertise in the name of other well-established brands should compulsorily disclose of the real brand name instead of copying under someone else's logo/brand. Any kind of infringement done, can be stopped and. Additionally, we could understand the originality of brands. Global rules need to be synced globally in order to stop this kind of infringement.

Nowadays, with the rise of AI and tech, it has become very easy to clone and copy someone's brand name and voice name and sell it under someone else. It has become very difficult to prove whether a voice is AI generated or an actual one. Furthermore, all voice-based searches, and reality features, escalate the issue as viewers are provided with limited context to correctly identify the source of the advertisement. There shall be made available more advanced tools to track down such AI generated content and voice overs as brands have started to suffer losses due to AI generated content and advertising. Domain squatters, i.e. those people who sell material registered under someone else are doing it more easily and effectively with the help of AI.

Such complexities are further highlighting the urgent necessity in front of regulators to adopt flexible technology responsive framework that will help curbing these domain squatters. Additionally, digital platforms like YouTube, Instagram shall be educated on ethical practices and must be regulated in such a way that no such kind of generated content will be published on these platforms. Without the induction of such reforms, mitigating such risks across the digital world would become difficult and it will continue to hamper the reputation and make brands suffer losses.

SHORTCOMINGS

Although, the doctrine protects trademarks at digital marketplaces, it overextends rights in terms of e-commerce growth. The doctrine posits carious flaws such as advertising threats, consumer sophistication and overprotection.

In the case of MakeMyTrip India Pvt. LTD v. Booking.com (2022)The Delhi High Court denied an interim injunction in MakeMyTrip India Pvt. Ltd. v. Booking.com B.V. (2022)⁷ This ruling rejects the initial interest confusion claims but this approach invites criticism for undermining the core purpose. The ruling restricts use under section 2(2)(b) of the Trademarks Act, 1999 to visible misleading elements, dismissing no display triggers of confusion. Section 30(1) of the Trademarks Act, 1999 clearly allows honest and comparative advertising that references competitors marks, thereby increasing pro-consumer value. The doctrine's reach However, the doctrine's expansive reach threatens this balance any fleeting visual or conceptual similarity, even if ultimately clarified, may trigger infringement liability. This creates a chilling effect: competitors may self-censor truthful comparisons fearing litigation over transient consumer attention, even when final purchasing decisions involve no confusion.

Despite legal provisions for safeguarding the rights of the consumers, competitive advertising is still subject to scrutiny. This is because competition in the online marketplace potentially stifles essential

Afterall, the doctrine's trajectory demands to preserve the competitiveness of the market. Courts have to differentiate between actionable misleads and lawful attention seeking strategies and thereby ensuring brands awareness does not equal to infringement.

With India's digital marketplace expanding, it is pertinent that there are statutes in place to apply this doctrine efficiently. It is to encourage facilitation of rather than suppression of comparative exchange of information, healthy competition and promotion of innovation.

CONCLUSION

The Doctrine of Initial Interest Confusion in the expanding digital marketplace has become significant in understanding how a consumer's attention can be swayed or redirected. The beginning stages of interaction are pertinent as the brands depend on search rankings, targeted advertising and keyword investment. IIC comes to use in identifying when this attention is induced through deceptive means of another's trademark

The doctrine calls for an equilibrium between protecting the interests of the consumers while also promoting efficient competition. Making use of innovative marketing strategies is permitted however, consumers must not be influenced because of another brand's goodwill. Given the evolving trends in online marketing such as AI recommendations, algorithmic tracking and multi-platform integration, the legal norms need to adjust.

Ultimately, the aim is to protect the trademarks of the consumers, which demands transparency and accountability in the strategies used. This is where integrating IIC principles comes into play, as it fosters a sense of trust and responsibility. These measures are essential for preserving the integrity of a progressively evolving digital market.

Footnotes

1. Jatinder Maan & Gurjinder Singh, Initial Interest Confusion Vis-À-Vis Trademark Law, 3 Indian J. Integrated
Rsch. L. 571 (2024)

2. 365 F. Supp. 707 (S.D.N.Y. 1973)

3. Sandhi Sarun, Meta Tag Hijacking Runs Wild as Regulators Look Away Until Pushed, BestMediaInfo

4. [562 F.3d 123 (2nd Cir. 2009)]

5. Zachary J. Zweihorn, Searching for Confusion: The Initial Interest Confusion Doctrine and Its Misapplication
to Search Engine Sponsored Links, 91 Cornell L. Rev. 1265 (2006).

6. Deciphering Initial Interest Confusion: Its Impact on Online Marketing and Domain Name Disputes
(GenerisOnline, date unknown).

7. (COMM) 268/2022

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