Google v. DRS – The Subtle Victory for Google: A Case Comment

At first blush, the Google LLC v. DRS Logistics (P) Ltd.¹ judgment passed by the Division Bench of the Delhi High Court, appears to have been a victory for the plaintiff-respondent (DRS), however, a closer analysis of the judgment reveals the bullet dodged by Google as a defendant-appellant.

Google’s Ads programme

The controversy in this matter revolved around Google’s Ads programme. The Ads programme as explained in the judgment is essentially, an advertising self-service platform managed by Google through which advertisers can create and display online advertisements with respect to their websites by bidding on keywords. The said advertisements are displayed on the first page of the Google search engine and are labelled with a prefix “Ad”, to distinguish the same from “natural” or “organic” search results, as opposed to the “Ads”, which are “sponsored” or “inorganic” search results.

As illustrated in the judgment, when a user searches for the car brand “Audi”, various competitors of Audi (Lexus, Porshe) are also listed in the search results as “Ads”, along with “natural” or “organic” search results (as competitors have probably bid for the Audi keyword).

Apart from conducting an auction of the keywords in real-time, Google also has a statistical tool called the “Keyword Planner” which suggests to the advertisers not only the volume of monthly searches made on the same keyword but also suggests additional keywords that could be considered by the advertiser. For example, when the keywords “packers and movers” are keyed in, the “Keyword Planner” not only displays the average monthly searches for the keywords “packers and movers” but also displays additional keywords such “Aggarwal packers and movers”.

Case set up by the parties

DRS’s grievance was that the use of its registered trade marks “AGGARWAL PACKERS and MOVERS” as keywords for third parties to display their sponsored links infringes its trade marks. When a user keys in the words “AGGARWAL PACKERS and MOVERS”, the links of third parties such as “www.safepackersmovers.com” and “www.dtccargopackers.com” would also be displayed who have no connection with DRS resulting in diversion of internet traffic from its website to that of its competitors. Thus, the use of its trade marks as keywords per se amounted to infringement.

It was further alleged that internet users who were potential consumers were deceived into believing that they were availing the service of DRS and DRS had in fact received such complaints from users. Google was liable for trade mark infringement and could not avail the safe harbour immunity as envisaged in Section 79² of the Information Technology Act, 2000 (IT Act), as it not only profits from advertisers who bid on these trade marks but also actively suggests keywords to these advertisers through its “Keyword Planner”.

Per contra, it was contended by Google that the use of the keyword in its Ad programme was not used under the Trade Marks Act, 1999³ (TM Act) and thus there could not be any infringement. The keywords were invisible to the consumer who could not see or perceive them. Moreover, the content of the Ad must be looked at and a user would not get confused by Ads which make their source clear. Absent any likelihood of confusion, there could not be infringement of trade mark. Even if it was accepted that a keyword is use of a trade mark within the meaning of the TM Act, the same would be use by the advertiser and not use by Google. Google is an intermediary entitled to safe harbour protection under Section 79 of the IT Act.

Findings of the Single Judge

The learned Single Judge held that the invisible use of a mark may also infringe a trade mark. There was an obligation of part of Google to ascertain that the keyword chosen by an advertiser is not a trade mark and even if it is a trade mark the same has been licensed/assigned. Google could not avail the benefit of the safe harbour protection of being an intermediary under Section 79 of the IT Act.

However, it was also held that the plaintiff could not have the right on surnames/generic words like packers or movers individually. The Single Judge allowed the injunction applications of the plaintiffs in the following manner:⁴

127. …(i) Defendants 1 and 3 shall investigate any complaint to be made by the plaintiff to them alleging use of its trade mark and its variations as keywords resulting in the diversion of traffic from the website of the plaintiff to that of the advertiser.

(ii) Defendants 1 and 3 shall also investigate and review the overall effect of an Ad to ascertain that the same is not infringing/passing off the trade mark of the plaintiff.

(iii) If it is found that the usage of trade mark(s) and its variations as keywords and/or overall effect of the Ad has the effect of infringing/passing off the trade mark of the plaintiff then Defendants 1 and 3 shall restrain the advertiser from using the same and remove/block such advertisements.

Issues framed by the Division Bench

Significantly, Google’s appeal before the Division Bench was confined to the extent that the directions in para 127 were based on the finding that the use of trade marks as keywords in the Ads programme amounts to “use” of a trade mark under the TM Act, which may amount to trade mark infringement. And, Google is not entitled to safe harbour immunity under Section 79 of the IT Act. Based on the aforesaid scope, the following issues were framed by the Division Bench⁵:

35. … (i) whether use of the trade marks as keywords amounts to use of those marks for the purposes of Section 29⁶ of the TM Act;

(ii) if so, whether such use is that of the advertiser or by Google as well;

(iii) whether the use of the trade mark as keywords per se amounts to infringement of a trade mark; and

(iv) if so, whether Google is absolved of its liability in respect of use of trade marks as keywords by virtue of being an intermediary under Section 79 of the IT Act.

Key findings of the Division Bench

Issue 1

After examining the various provisions of the TM Act regarding “use” of a trade mark, the Court held the use of a trade mark as a keyword for display of advertisements amounted to use of the trade mark in advertising which would fall within the ambit of Section 29(6) of the Act. The Court made a distinction between the expression “in advertising” as used in Section 29(6)(d) and the expression “in an advertisement” and held that it is not necessary that the trade mark should physically appear in an advertisement for the same to be used as “in advertising”.

The Court also examined in detail the international jurisprudence on this aspect and found the view of the European Court of Justice (ECJ) in Google France SARL v. Louis Vuitton Malletier SA⁷ persuasive inasmuch as it was held therein that use of a sign by an advertiser, which is identical to the trade mark as a keyword, in the context of an internet referencing service would be used of the same in relation to goods or services.

The Division Bench did not agree with Google’s arguments on invisible use and reasoned that the provisions of the TM Act would have to be read in an expansive manner to address the novel issues brought about by the advancement of technology.

However, at the same time, the Division Bench also recognised a nuanced distinction between the use of a mark as a “trade mark” as opposed to its use “other than as a trade mark”. It was held that “the use of a trade mark as keyword by an advertiser for the purposes of displaying its advertisements on the Search Engine, is use of the mark in relation to the goods and services offered by an advertiser. But it is not use that mark as a trade mark”. This distinction becomes key in the context of Section 29(1) of the TM Act which requires the use of the infringing mark as a “trade mark” for establishing infringement of the trade mark. Basis this distinction, the Court holds that Section 29(1) of the Act is inapplicable as keywords do not perform a source identifying function and thus, use by advertisers of keywords cannot be perceived as “use of a trade mark”.

Issue 2

On this issue, the Court did not find favour with Google’s arguments and held that Google’s role in the Ads programme is “anything but passive”. The Court took into account the different features of the Ads programme to come to the conclusion that Google is an active participant in promoting use of trade marks as keywords for the Ads programme and the final decision as to which Ad is displayed on the search page is not of the advertiser but is based on the qualitative decision that is taken by Google.

On this particular aspect, the Court did not agree with ECJ in Google France SARL v. Louis Vuitton Malletier SA⁸ wherein ECJ had taken the view that Google allowed its clients to use the signs “without itself using those signs”. The Court rejected Google’s argument that the decision of which Ad appears on the search page is automated and driven by artificial intelligence. It reasoned that Google is the architect and operator of its programme.

Issue 3

The essence of the judgment revolves around the findings of the Court on this issue i.e. “whether use of the trade mark as keywords per se amounts to infringement of a trade mark”. After examining the competing rights and interests of the proprietors of trade mark vis-à-vis the rights and interests of Google, the Court in no uncertain terms held that “use of trade marks as keywords absent any confusion, unfair advantage, dilution or compromise of the trade mark, is not infringement”.

(emphasis added)

The Court also took cognizance of the participation of the internet users and reasoned that an internet search engine is different from a directory service inasmuch as an internet user may be looking for an array of information that may be relevant to the trade mark including its reviews or information regarding competitors who deal in similar goods or services. The Court found that there was nothing illegal in seeking out such internet users as targets for advertisements that may be relevant. To come to this conclusion, the Court drew an apt analogy to a brick-and-mortar world, where there would be no question of infringement if customers looking for a product were also offered products of rival competitors or if an entity would put its advertising billboard next to a competitor’s exclusive store or when a competitor would buy a shelf next to a competing brand.

Further, the Court delved into the core functions of a trade mark and ruled in favour of Google by holding that it prima facie found nothing illegal in Google’s acts of using trade marks as keywords provided there was no confusion that the links or Ads displayed were not associated or related to DRS. Absent any likelihood of confusion, DRS’s grievance would not be actionable under Section 29(2) of the TM Act. Interestingly, the Court also noted that DRS also bids for keywords in the Ads programme.

Pertinently, the Court also cautioned that for a claim to be actionable there must “real likelihood of confusion”. Mere generation of interest in the sponsored link without any likelihood of confusion would not amount to infringement of trade mark and initial interest must be not conflated with the doctrine of “initial interest confusion”.

Regarding infringement under Section 29(1) of the TM Act, as discussed above, the Court held that the same is not applicable as the use of the trade mark as a keyword by Google or by the advertisers would not be perceived as use of a trade mark, as a keyword does not perform the essential function of trade mark i.e. being a source identifier.

Apropos, infringement under Section 29(4) of the TM Act, the Court rejected the argument of DRS and held that “the contention that use of trade marks, absent anything more, would amount to infringement of the trade mark simply for the reason that the same is used to display advertisements, is erroneous. The use of trade marks as keywords in the Ads programme does not, per se, amount to without cause, taking an unfair advantage of the trade mark; nor can be construed as detrimental to the distinctive character or repute of the trade mark”.

The Court did not find Google’s activities of offering alternatives in terms of displaying sponsored Ads as unfair and went on to observe that “every advantage drawn by use of a trade mark cannot be termed as drawing, unfair advantage of the trade mark, without cause”. The Court again revisited the competing rights at play and held that Google has a right to use the virtual space which is its domain to display Ads and proprietors of trade marks do not have any extended right to interdict any and all use of marks. The Court again emphasised that absent any element of blurring or tarnishment, the use of a trade mark as a keyword would not automatically entail that such use is detrimental to the character or repute of the trade mark. Additionally, the Court also considered that fair use of a trade mark is permissible.

As regards, contributory infringement, the Court did not consider the said aspect in detail but in brief alluded towards Google’s liability for the same, if in a given case, it was found that Google had actively participated in the infringement of trade mark by virtue of its use as a keyword and had taken no remedial steps on being made aware of the same.

Issue 4

This issue was held against Google as the Court observed that prima facie, Google was an active participant in use of the trade mark as keywords and was also involved in selecting the recipients of the information of the infringing links. Thus, Google would not be able to avail the immunity of an intermediary under Section 79 of the IT Act, if the alleged activities are found to be infringing DRS’s trade marks.

Conclusion

In conclusion, the Division Bench did not consider it apposite to interfere with para 127 of the judgment of the Single Judge, as it took the view that despite DRS’s wide prayer to restrain Google from using DRS’s registered trade marks as keywords, the same was not granted to DRS in that amplitude and the relief as granted by the Single Judge was narrower in scope.

In the author’s view, the nub of the entire controversy centered around Issue 3 and thus having won on that count, the judgment appears to be a big relief for Google inasmuch as it can continue to offer trade marks as keywords as long as there is no likelihood of confusion or any element of blurring or tarnishment of the trade mark in question. Albeit, Google will now have to exercise a higher degree of scrutiny and caution and act swiftly when it receives complaints from trade mark owners alleging infringement of trade mark on account of their trade mark(s) being used as keywords in the Ads programme.

On a holistic analysis, it is the author’s view that the Court has carefully balanced the competing rights of the proprietors of trade marks, Google and internet users and rendered a judgment favouring competition and discouraging overreaching attempts of trade mark owners to restrain any and all kinds of use of their trade marks.