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DRS Logistics Vs Google: Liability for Using Third Party Trademarks as Keywords

11

FEB

2022

INTRODUCTION

With advancements in technology and the introduction of the Internet, our personal and social life has majorly been influenced by the internet or cyberspace. In order to meet the increasing demand of the market, businesses are also making a shift to the virtual world. These days businesses are adopting various advertising and marketing strategies in order to divert traffic to their business.

Online promotion is the most accessible and desirable way of selling the products and services by the companies as the Internet has the ability to locate and engage the target audience. Therefore, with the help of Google Ads word program, Hyperlinking, Deep-linking, and Meta Tagging, companies try to attract customers to their website. Search advertising has a predominant advantage by showcasing valuable advertisements in front of the target customers at the exact moment the customer is indicating his or her interest while surfing. Hence, showcasing the most appropriate ads to the target clients at the right time is the main purpose of online advertisement.

FACTUAL BACKGROUND

In the recent case of DRS Logistics Pvt Ltd & Others vs Google India Pvt Ltd & Others, CS (Comm) 1/2017, the Delhi High Court dealt with the issue of usage of trademark of the Plaintiff ‘Agarwal Movers and Packers’ as Keywords by the third-parties/competitors on the Defendants search engine and allowing the websites of its competitors being displayed as a top search result when the customers enter the trademark of the Plaintiff. Plaintiff also quoted that he has been forced to file this case against Defendant before the Hon’ble court as despite having a number of favorable decrees against third party advertisers, the infringing use of the trademark has not been discontinued. Plaintiff has made Google India and its parent company Google LLC the party to the suit. Plaintiff has also cited Justdial as Defendant No.2 in the present suit.

Plaintiff contends that the use of his trademark as keywords by the search engine creates a sense of confusion in the minds of the general public and it also diverts the web traffic to the website of the third party/competitor, thereby causing loss to the Plaintiff in financial capacity and also dilutes its reputation. In support of this statement, Plaintiff provided the court an affidavit of a customer wherein the customer declared that he was rendered deficient service by a third party who was advertising under the trademark of Plaintiff implying that he is somehow associated with Plaintiff.

Google (Defendant) on their part contended that the invisible use of trademarks as keywords does not amount to ‘use’ under the Trademarks Act 1999 and it does not amount to infringement of trademark and passing off action. It also contended that the Indian customers are “literate or semi-literate” and could not be confused even if the third-party trademarks are used as keywords.

The Defendants also contended that the sponsored result algorithm used by Google is different from that of the algorithm involved in producing organic search results through the use of metatags. Google contended that there are various parameters involved when an advertisement is displayed by the algorithm used by its Ad words program and it’s not just only for a money consideration. The keywords and metatags though different are used to show relevancy and appear on the top of the search engine result page, whether organic or sponsored result. Defendant (Google) also contended that it is an intermediary and has no obligation to check whether the keyword used by the advertiser is a trademark. Therefore, Google is entitled to claim the harbor of Section 79 of the Information Technology Act 2000.

ISSUE

  • The main issue involved in this case was whether the invisible use of a trademark shall amount to ‘use’ within the meaning of Sections 2(2)(b) and 2(2)(c) of the Trademark Act?
  • Whether the use of the trademark of an owner as a keyword by a third party shall amount to infringement of trademark and passing off action?
  • Whether the use of the mark as a keyword results in the diversion of traffic from the website of the original proprietor to that of the advertiser?
  • Whether Google is an intermediary to seek protection under Section 79 of the Information Technology Act 2000?

JUDGMENT OF THE DELHI HIGH COURT

The Delhi High Court passed the judgment thereby directing the Defendants Google India and Google LLC to investigate the complaints made by Plaintiff with respect to the usage of their trademark as keywords and to check whether such usage of the keywords in advertisements amount to trademark infringement or passing off action. Moreover, if Google finds out that such usage of keywords amounts to infringement or passing off action, then it should remove the advertisements from its website.

Before the order passed by the Delhi High Court in the present case, the order passed by the Madras HC in the case of Consim Info Pvt Ltd vs Google(2013) acted only as a persuasive value and not binding in nature by referring to the use of the third-party trademarks as keywords as an infringement of trademark because the trademark used by Consim was descriptive of its services.

The reasoning is given by the Delhi HC while disposing of the judgment held that the use of third-party trademarks as keywords by search engines amounts to ‘Use’ an infringement of the trademark. This order passed by the DHC directly holds Google’s Ads Word program liable for infringing the intellectual property rights of the holder.

ANALYSIS

The Ad Words Program started by Google was a huge advertising business on which Google banked to earn a huge chunk of profit. This program helped the advertisers to pay for marketing their products by linking them with particular search terms or results. Therefore, the customers searching for a product they wish to buy does not have to pay any amount to conduct searches over the search engine. Hence, it is implied that the advertisers of the products were required to buy search terms on basis of the highest bid for their advertisement to be activated on the Internet while being searched. When the customers search for a product or service on the search engine, the search engine shows two types of results. First is the actual search results and the second is the sponsored links with their URL.

The problem with Keyword Advertising by the Ad Words Program of Google is that it creates uncertainty between rival trademarks leading to its infringement and dilution of the trademark. On searching a particular term, it displays a Sponsored Link that as a result creates bewilderment in the mind of the public as to the origin of goods.

Keyword advertising is a mechanism that specifically allows the Search Engine and the advertisers of the product, to display an advertisement that is modified as per consumer-specific searches. The Company pays the bid amount to Google when the customer clicks on the ad which consists of keywords purchased by the company.

Trademark infringement occurs when a third party uses some other party’s registered trademark as a keyword to link its own website to advertise its own goods and services. This action severely impacts the business of the registered trademark holder.

In the case of Mattel Inc. &Ors vs Jayant Agarwalla&Ors (2008), the court opined that ‘Metatags’ are those non-visible text/machine-readable codes that are embedded in the source code of the webpage as part of HTML which describes the subject matter of the webpage. These Metatags help the search engine in determining whether the page is relevant to the search terms entered into the search engine. Therefore, using trademarks as such Metatags amounts to trademark infringement and passing off action.

Furthermore, in the case of Kapil Wadhwa vs Samsung Electronics Company (2012), a division bench of the High Court of Delhi stated that the use of a third-party trademark as Metatag is illegal as it enables the defendants to ride upon the reputation of the plaintiff.

Google while pleading the case contended that keywords act as a back-end trigger and when the consumer browses anything on the search engine, the keywords even if they are trademarked occur. However, such keywords are imperceptible to the end-user and are not used in a ‘Trademark Sense’. Therefore, Google contended that such invisible use of a trademark does not amount to trademark infringement.

Google relied upon Section 2(2)(b) and (c) of the Trademark Act 1999 and Section 29 of the Trademark Act 1999. It argued that both the Sections mentioned above must be read conjointly to observe that invisible use of trademark neither satisfies the requirement of visual representation nor constitutes any statement to be relevant under Section 2(2)Trademark Act 1999. However, the Delhi High Court refuted this contention made by Google and stated that Section 29(6) of the TM Act 1999 explicitly mentions four instances of ‘use’ of trademark for the purpose of determining infringement. Therefore, the reference to the word ‘use’ under Section 2(2) will not be applicable unless the context does not specify otherwise. Hence, it is not mandatory for a trademark to meet the criteria of visibility under Section 2(2)(b) of the Trademark Act 1999.

The Delhi High Court specifically stated that the Google Ad Words Program qualifies as advertising. Hence, Google’s keyword policy on usage of third-party trademarks, while advertising is considered ‘use’ of such trademark under Section 29(6)(d) of the Trademark Act 1999 and, constitutes infringement.

Also, the Delhi High Court while rejecting the contention of Defendant that the Indian customers are “literate or semi-literate” and could not be confused even if the third-party trademarks are used as keywords, laid emphasis on the judgment passed by Supreme Court in Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited (2001), wherein it was opined that an Indian Consumer is classified as a man having ‘average intelligence and imperfect recollection and cannot be equated with a purchaser from the United Kingdom or elsewhere. Therefore, the advertisements using third-party trademarks create a sense of confusion with regard to the origin of goods and services.

With respect to the third issue in hand, the Delhi High Court referring to the Judgment passed in Hindustan Pencils (P) Ltd. vs India Stationery Products Company & Others (1990) and on the affidavit filed by Gaurav Bakshi dated 27.10.2015, held that the usage of the trademark of the Plaintiff as a keyword, diverts the traffic from the webpage of the Plaintiff to that of the competitor which means that the normal consumer who on typing the trademark of the plaintiff as a search query led to a webpage that caused confusion with respect to the origin of the webpage, as to whether it belonged to the plaintiff or not. Therefore, the Courts must be mindful of the fact that it is ultimately the public at large that gets cheated and feels the brunt of spurious goods and services in the market.

In the present case, Google contended that it is an intermediary as it acts as an advertising platform. It also claimed that the content of the advertisement, including the keywords is selected and submitted by the advertiser to display on its platform. So, Google should be protected under Section 79 of the Information Technology Act 2000 which protects intermediaries from being liable for the infringement of third-party trademarks or content made available on their platform. However, the Delhi High Court rebutted the contentions made by Google and stated that Google cannot take the defense of the provisions contained under Section 79 of the IT Act 2000 due to the use of its Keyword Planner Tool that suggests its advertisers the keywords to choose for their advertisement that includes the trademarks of its competitors and the popularity and web traffic generated by the website of the competitor because of the use of a particular potential keyword.

It was also showcased by the court that Google, gains monetary benefit from their Keyword Planner Tool by inducing the third parties to bid for the keywords that are directly linked to the trademark of their competitors. So, Google does not fall under the definition of an intermediary. The Delhi High Court also cited the case of Christian Louboutin vs Nakul Bajaj (2018), wherein it was held that entities cannot claim the benefit of Section 79 of the IT Act 2000 if they’re involved in any unlawful activities. Therefore, allowing protection to Google under Section 79 of the Information Technology Act 2000 as an intermediary, without the ascertainment of the keyword as a trademark, would amount to legalizing of infringement on the part of the court.

CONCLUSION

To Conclude, it is clearly seen that the jurisprudence evolved by the Delhi High Court in the present case will act as a great precedent in solving the future disputes involving the use of third-party trademarks as keywords or metatags by the advertisers on the search engine for the promotion of their goods and services and misleading the public at large.

Author: Shrey Mohan - a student of School of Law, Bennett University (Greater Noida), an intern at Khurana & Khurana, Advocates and IP Attorney, in case of any queries please contact/write back to us via email vidushi@khuranaandkhurana.com

About the Firm

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Tel 91-120-4296878, 91-120-4909201, 91-120-4516201
Fax 91-120-4516201
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