Introduction
The division bench of the Hon’ble Delhi High Court recently agreed with the findings of the single judge of the Hon’ble Delhi High Court in Google LLC Vs. DRS Logistics and held that Google cannot escape liability in case of trademark infringement by an AdWord, by claiming benefit of safe harbour provisions under the Information Technology Act, 2000.
AdWords is an advertising system developed by Google, which can be used by businesses to reach their online target markets through its search engine platform and partner sites. These partner sites host a text and its products or services.
The court analysed the definition of ‘use’ of a registered trademark by way of advertising under the Trademarks Act, 1999, in light of trademarks being used as keywords on the Internet.
Some important principles that emerge from this case are:
- It was held that use of a registered trademark as a keyword amounts to ‘use’ of a trademark in advertising as contemplated under Section 29(6) of the Trademarks Act:
Section 29(6)- For the purposes of this section, a person uses a registered mark, if, in particular, he uses the registered trademark on business papers or in advertising.
- It was held that “use of trademarks as keywords, in the absence of any confusion, unfair advantage, dilution or compromise of the trademark, is not infringement”.
- It was held that “Google cannot claim immunity from liability under Section 79(1) of the IT Act, based on its role in the Ads programme”.
Facts
DRS Logistics moved the High Court to prevent Google from using its registered trademark “AGARWAL PACKERS & MOVES or DRS LOGISTICS” as keywords, meta tags, or trademarks. It was alleged that Google by allowing third parties to use a registered trademark of another as an AdWord increases the chances of sponsored links and infringing websites being displayed when a user searches for goods or services provided under the said registered mark.
Safe harbour Information Technology Act, 2000 (“IT ACT”)
Google relied on safe harbour provisions under the IT Act to escape infringement liability. Section 79 of the IT Act extends safe harbour provisions to an intermediary, shielding it from liability in certain instances of online infringement and third-party content, provided that the intermediary follows ‘due diligence’. Due diligence by an intermediary includes appointment of a chief compliance officer, establishing grievance redressal mechanism, processes to be followed in case of receipt of a complaint. This mechanism must be clearly specified in the terms of use and privacy policy of the website.
Decision
Google’s ‘active participation’ in use of trademarks as keywords was recognised, owing to the AdWord programme actively suggesting keywords for SEO. Also, Google derives significant commercial value from its AdWords programme and its pay-per-click model suggests that the selection of ads for display on SERP aims to maximise Google’s revenue stream. Hence, Google could not rely on safe harbour provisions under Section 79 of the IT Act in case of trademark infringement owing to the use of a registered trademark as a keyword.
The decision also makes a clear distinction between infringing and non-infringing use of trademark as a keyword, holding that the “use of trademarks as keywords, in the absence of any confusion, unfair advantage, dilution or compromise of the trademark, is not infringement”. The courts recognised that a user on the internet, by searching for a trademark, is not only looking for the goods and services offered under the trademark, but may also be searching for reviews on those goods and services and comparisons with other similar goods and services in the market. A mere generation of interest in a sponsored link without any likelihood of causing confusion was held to not amount to trademark infringement.
In the author’s view, this division bench judgment carves a delicate balance between fair competition on one hand and trademark infringement and intent to piggy-back, cause harm and confusion on the other; bringing intermediaries also within the ambit of trademark infringement where active involvement can be proved.
For further information, please contact:
Swati Sharma, Partner, Cyril Amarchand Mangaldas
swati.sharma@cyrilshroff.com
