Delhi High Court Reinforces 'Initial Interest Confusion' Test in Hotels.com v. Hotelcom

A major case in trademark law has been formulated by the Delhi High Court, granting a permanent injunction on the use of the mark "HOTELCOM" in a suit against the global Hotel booking platform Hotels.com. The Court leaned on the doctrine of First Interest Confusion and decided that any confusion, however brief, in the minds of the consumers can be used to prove infringement as per the Trade Marks Act, 1999.

Justice Tejas Karia noted that infringement does not have to be measured through a completed purchase determination only. The confusion can be experienced long before a consumer actually comes in contact with the mark. Although the consumer might eventually know that the product or service is not owned by the registered owner, the infringer might have already succeeded in their objective by drawing the attention of the consumer and steering them off the original mark. Even a temporary confusion may be subject to action in such cases as a trademark infringement.

The Court gave weight to the ruling in Under Armour Inc. v. Anish Agarwal and Anr. in which it was determined that a brief confusion between two competing marks may be sufficient to prove infringement. Hotels.com, beneficiary of a good reputation in the international business with partnerships with major hotel chains like Taj Palace, The Leela Palace, JW Marriott, ITC Maurya, The Oberoi, and Radisson Blu, cited that the mark name of the defendants HOTELCOM was phonetically and structurally similar to its own and was being used to confuse the consumers at the expense of its goodwill. The accused, in their turn, argued that they advertised their services to hoteliers and not to everyday consumers and that advanced purchasers will not be deceived by the resemblance.

This argument did not convince the Court. It is believed that even advanced consumers can be lured into initially using the infringing mark and that this diversion in itself is considered infringement. Justice Karia mentioned that the intention of the infringer can be achieved by simply redirecting the attention of the consumer. The consumer can then, at his own initiative and with full awareness of the fact that it is not in association with the registered Trade Mark, decide to take the infringer product; however, due to its own unique features.

Following this line of argument, the Court held that both infringement and passing were proved. It granted the suit against Hotels.com and damages of Rs. 5,00,000.

This ruling is of particular relevance to the digital economy, where users are frequently redirected to sites and services via brand names and domain names. Through renewed adjudication of the principle of Initial Interest Confusion, the Delhi High Court has come out crystalline that trademark protection applies to the initial point of consumer contact, and safeguards brand owners against undue diversion of attention that aims at deploying its reputation.

Article by Adv. Akshatha Deepak