In an appeal before the Delhi High Court, two subsidiaries of the DRS Group namely DRS Logistics and Aggarwal Packers & Movers, alleged that Google’s use of their trademark in its Ads Program amounted to trademark infringement. Google on the other hand argued that mere use of keywords does not fall under the ambit of “use” under the Trademarks Act, 1999. Upon hearing both sides, Delhi High Court upheld the Single Judges order and ruled in favour of DRS Logistics.
Before diving into the issues and observations made by the High Court, it is pertinent to understand how Google’s Ads Program operates and the purpose of the keywords. When a user/consumer searches for a product on Google’s search engine, the results populated are of two types:
- a) the results of actual search from its database; and
- b) sponsored results that top the list.
Therefore, the advertisers of the business pay for marketing of their products by linking their web pages to the search terms either directly or indirectly associated with their products. Given that there are multiple businesses for each category of the products, the purchase is subjected to a bidding mechanism where the highest bidder gets to link its product with the search term and its webpage is populated as the sponsored result at the top of the list attracting the attention of the consumers. Therefore, when an advertiser purchases multiple keywords relating to its product it increases the chances of the sponsored link of the advertiser to be enlisted at the top of the search results as per the consumer’s requirements.
Brief Facts
DRS’ trademark ‘Agarwal Packers & Movers’ has been used by Google as a ‘keyword’ by third parties/competitors of DRS on Google’s search engine which resulted in DRS’ competitors’ websites to be displayed as sponsored links at the top of the search results upon a consumer’s search of the said trademark of DRS effectively diverting the traffic to its competitor’s websites.
The issues which arise in this case can be summarized as follows:
- Whether the use of trademarks as keywords amounts to ‘use’ under the Act?
- Whether such ‘use’ is attributable to Google?
- Does the use of trademarks as keywords constitute trademark infringement under Section 29 of the Act?
- Do ‘Meta Tags’ and ‘Keywords’ distinct serve a similar purpose for advertising?
- Can Google avail safe harbour defence under Section 79 of the IT Act?
Contentions
It was contended on behalf of Google that use of trademark as ‘Keywords’ in its Ads Program does not amount to ‘use’ under the Act, because use of keywords is not per se infringement across many jurisdictions. Since keywords are not visible to users/consumers, therefore, their use does not qualify as ‘use of a mark’ since, ‘use’ under Section 2(2)(b) of the Trademarks Act, is to be construed as ‘use of printed or other visual representation of the mark’. As the keywords are invisible, the statutory test of confusion (based on the marks perceptibility) is not met.
In addition to this, Google said that even if ‘use’ of keywords amounts to using a trademark, such use is made by the advertiser and not by Google. As Google merely permits the advertisers to use keywords for display of sponsored links and does not select the keywords. Furthermore, since Google is an intermediary, it can claim safe harbour under Section 79 of the Information Technology Act 2000. The single bench’s reasoning was erroneous since a ‘Meta Tag’ and ‘Keywords’ have two different purposes and cannot be construed as same, Google argued.
On the other hand, DRS contended that Google actively promotes sponsored ads, encouraging third parties to employ its registered trademarks as keywords and that Google cannot claim safe harbour under the IT Act. It was also argued that ‘Meta Tags’ & ‘Keywords’ serve similar functions. Moreover, Google using DRS’ trademark as a keyword in its Ad Program resulted in the diversion of traffic from the DRS’ website to its competitors and, therefore, amounted to infringement under the Act. DRS stated that internet users are deceived into believing that they are availing the services of DRS.
Delhi HC’s Findings
After hearing the contentions of both parties, the High Court concluded that foreign judgements cited by Google seem to be inconsistent in determining the law. Also, HC relied upon the Supreme Court’s judgement in Hardie Trading Ltd. v. Addisons Paint & Chemicals Ltd wherein it was held that Section 2(2)(c)(i) of the Act is wide and the ‘use’ of a mark, other than physical form, could also be “in other relation whatsoever” to such goods to amount to a ‘use’ under the Act. Additionally, Court noted that the phrase “unless the context otherwise requires” at the beginning of Section 2(2) limits the Section’s applicability to where it is contextually relevant. Thus, it was held that it is not necessary to satisfy the criteria of visibility to entail infringement under the Act.
Further, HC stated that Google Ads Program qualifies as advertising, thus rendering use of trademarks as keywords, as use of trademarks in advertising as per Section 29(6) of the Act.
The High Court did not accept the European Court of Justice’s approach in Google France SARL v. Louis Vuitton Malletier SA – where the ECJ held that ‘use’ of keywords did not amount to use ‘in relation to goods & services’, as Google here is an active participant in promoting the use of trademarks as keywords, given that Google suggests such key words to the advertisers and also monetizes the same. Thus, Google is solely liable and not the advertiser, Court held.
While HC noted that use of a trademark as a keyword does not constitute an infringement per se, the registration of a trademark does not confer on DRS an exclusive right to be displayed at the top of the results of a search. However, the HC recognized the rights and remedies of DRS pursuant to it’s grievance that the consumers are being diverted to the competitor’s websites effectively having an adverse impact of its business. Further, the Court applied ‘doctrine of initial interest confusion’ and observed that if a consumer is initially confused upon opening the sponsored links containing the DRS’ mark, the case of infringement under Section 29(2) can be made out, as is in this case.
The Court also acknowledged that there is certain merit in the Google’s contention that ‘Meta-tags’ form part of the source code of the website, but ‘Keywords’ do not form a part of such a source and that keywords are not visible to the consumers and are merely used for sifting through the ads that may be displayed pursuant to a search involving the relevant keyword. However, such technical differences do not matter in this context because both ‘Meta-tags’ and ‘Keywords’ are for the similar purpose of advertising and attracting internet traffic. Thus, the Indian judgments where use of a trademark as a Meta-tag constituted to an infringement would also be applicable to keywords, the Court noted.
Finally, answering the safe harbour defence under IT Act, Court observed that Google was not just a mere intermediary but an active participant where it monetized the keywords and also suggests the keywords to be purchased by the advertiser through its keyword planner tool, thus rendering Google liable.
The Order
The DHC directed Google to investigate the DRS’ compliant and if its finds that such usage amounts to infringement then it should remove the advertisements from its website. Accordingly, the appeal of Google was dismissed and the High Court upheld the Single Judge’s decision of use of trademark as ‘Keywords’ under the Google Ads Program amounts to infringement of trademark under the Act.
While it may seem that the jurisprudence has evolved in solving disputes involving use of third-party trademarks as keywords and/or meta tags, it is pertinent to note that the case did not quite elucidate the difference between ‘Metatags’ and ‘Keywords’ as it is apparent that the functionality of both features are in fact different, agnostic of their broad purpose given that the focal point of determining trademark infringement in this case is the consumer’s confusion and thus the reasoning relied upon by the HC warrants a deeper exploration of functionality of both features and their respective technical complexities.
Furthermore, the DHC itself did not opine on the un-authorized use of the registered trademark as ‘metatag’ by third-party would amount to infringement of trademark under the Act, leaving the question open ended.
Having stated the above, the order seems to have a quick impact on cases related to the subject matter, the ratio in this Case saw quick applicability in the recent September 2023 judgment of Policybazaar Insurance v. Coverfox Insurance Broking. Interestingly, the Delhi HC, referring to the detailed observation on ‘use’ made in the Case, dismissed Policy bazaar’s plea to prevent other entities from using keywords identical to its trademarks on Google’s AdWords. Therefore, while the order sheds light on such a prevailing subject matter, it fails to provide a satisfactory reasoning for its conclusion despite the holding.