Google LLC vs. DRS Logistics (P) ltd. & others.
Google India Pvt. Ltd. vs. DRS Logistics (P) ltd. & others.
The Hon’ble Delhi High Court dealt primarily with the right of the trademark owners to control advertising space on the Google search engine. While this issue appears narrowly confined to the Google Ads programme, the ramifications of this are far wider and would impact every search-based functionality of a software programme. At the outset, let me declare that I represented Google LLC in the matter. To be honest, my learnings become evident as the article progresses!
The legal issue was whether the provision of a keyword by an advertiser which is identical to a registered trademark of a third-party amounts to an infringement within the meaning of the Trademarks Act.
The judgement has a logical flow which I have tried to interpret, The Hon’ble Court initially decided whether the activity would amount to use within the meaning of Section. 2(2)(b) of the Trademarks Act, if use then by whom (the advertiser or Google as well). The next step is that of infringement. While discussing infringement, the Court undertook an examination of Initial Interest Confusion as well. The next stage was considering contributory liability and the Intermediary Defence. This, in my view, was the central nerve through which the Judgment flows.
The Hon’ble Court in Para 87 held that “the question whether a reference to the expression “use of a trademark” is to be understood as instructed by Section 2(2)(b) or 2(2)(c) of the Trademarks Act would depend on the context in which the said expression is used”.
In Para 88, the Hon’ble Court holds that the words of Section 2(2)(b) of the Trademark Act do not control the width of Section 29(6) of the Trademarks Act. Thus, if any action falls within the scope of Section 29(6) of the Trademarks Act, the same would necessarily have to be construed as use of the mark, for ascertaining whether the trademark is infringed in terms of Section 29 of the Trademarks Act.
The Hon’ble Court held that the words “unless the context otherwise requires” which is part of the opening section of Section 2(2) of the Trademarks Act limits the applicability of the section. The court held that the use of a trademark as keywords for display of advertisements in respect of goods or services amounts to use of the Trademark “in advertising” within the meaning of Section 29(6) of the Trademarks Act.
In my view, the Hon’ble Court considered the expression “in advertising” in Section 29(6)(d) of the Trademarks Act as not synonymous to the expression ‘in an advertisement’ (whether used as a verb or noun) and gave a very broad interpretation to “in advertising”. It is therefore not necessary for the registered trademark to physically appear in an advertisement for the same to be used “in advertising”.
The Hon’ble court has distinguished between use of a mark as a trademark, and its use other than as a trademark. The use of a trademark as a 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 of that mark as a trademark. This will be dealt with later for infringement
In my view, even if one were to expand “in advertising” to the extent as done, the issue is not merely one of visual representation that amounts to use, but something that is perceptible that amounts to use. Section 29(9) of the Trademark Act talks of “Spoken use”. It is important that spoken use is the only exception to “visual” use under Section 29(9) as the Section 29(9) indicates the word spoken not in an inclusive but exhaustive interpretation. In my view it is arguable that a keyword is not perceptible and providing a trademark as a keyword may not amount to use. Of course, logically if the Hon’ble Court held there to be no use, the matter ends, as the question of infringement need not to be examined.
In Para 128 the court held Google actively encourages and suggests use of keywords. Google determines, albeit by use of its software and algorithms, the Ads that are displayed on the SERP. It auctions use of keywords, including trademarks, as it is not disputed that the advertiser that bids the higher Cost Per Click amount is accorded a higher priority for display of its Ads.
The Hon’ble Delhi High Court in Para 129 departed from the view taken by the European Union in Google France SARL and Google Inc. v. Louis Vuitton Malletier SA.
The Hon’ble Court in the EU was of the view that a referencing service provider (such as Google) allows its clients to use signs, which are identical with or similar to trademarks “without itself using those signs”.
The Hon’ble Court clearly held that the contention that use of a trademark as a keyword per se constitutes infringement is unmerited. The Hon’ble Court took the view that the use of trademarks as keywords absent any confusion, unfair advantage, dilution or compromise of the trademark, is not infringement. The court considered that the consumer is aware of the search engine results being to some extent personalised and tailored to the person searching.
The Hon’ble Bench was of the view that the popularity of search engine is based on relevance of the results. The court was of the view that the Trademark owners were in essence claiming rights that they would not have in the real world.
The Division Bench cited the following examples from McCarthy on Trademarks and Unfair Competition
“Another analogy would be a customer walking into a brick-and-mortar retail computer store and asking the salesperson to show him a DELL laptop. Assume hypothetically, that competitor LENOVO offers the retailer a higher margin of profit than DELL. So, the salesperson guides the customer to a computer with LENOVO computers, saying: DELL laptops are great, but have you looked at the new LENOVO”
“A similar analogy would be automatic discount coupons given at some supermarkets. Hypothetically, the customer who just bought a jar of a HEINZ ketchup is given at the checkout counter a cents off discount coupon for viral HUNT’s ketchup. This happened in the hypothetical because HUNTS purchased from the supermarket the right to automatically have buyers of HEINZ ketchup be given a discount coupon in this way. The customer is automatically presented with a motivation for switching the next purchase to a competing brand, but is not “confused” or “deceived”
The Hon’ble Court stated that there may be numerous methods to seek customers who may be interested in a product or services covered under a trademark and there would be nothing illegal if an entity engaged in commerce puts its advertising billboard next to an exclusive store of its competitor. It is also permissible for a competitor to buy shelf space next to competing goods of a well-known brand. These are clearly instances where advertisements are directed towards customers seeking goods or services of a particular brand, but the same are not actionable.
NO INFRINGEMENT WITHOUT CONFUSION-
The fundamental question the Court needed to answer was whether mere diversion without confusion was actionable under the Trademarks Act, to which the answer was in the negative. In terms of the finding on infringement under sec. 29(1) of Trademark Act, the Hon’ble Court clearly held in keyword advertising, the use of trademarks either by an advertiser or by Google is not such as can be perceived as use of a trademark. The keyword does not perform any primary function of identifying the source of the goods or services. Thus, Section 29(1) of the Trademark Act is inapplicable.
In terms of Sec. 29(2) the Hon’ble court held infringement of a trademark under Section 29(2) of the Trademarks Act rests on the likelihood of confusion. Thus, unless it is established that in a particular case, the use of a trademark as a keyword has resulted in the internet user being confused, the action for infringement of a trademark under Section 29(2) of the TM Act would not lie. In terms of Sec. 29(2) the Hon’ble court dealt with the issue that there can be no infringement without any confusion.
The Hon’ble Court clearly held that the use of a registered trademark as a keyword, absent any confusion, dilution, or compromise of the trademark, would not amount to infringement of the trademark. The Hon’ble Court found nothing illegal in Google using trademarks as keywords for display of advertisements if there is no confusion that the links or Ads displayed are not associated or related to DRS. The Hon’ble Court found that if the Ad or link displayed does not lend itself to any confusion, DRS’s grievance regarding use of its trademarks as keywords in the Ads programme is not actionable. The Hon’ble Court draws a distinction between diversion and confusion. Whereas competing businesses do try to divert a consumer, the act of diversion is not a violation of Trademark law unless it is caused by confusion. The Hon’ble Court considered both the interest of the proprietor as well as the interest of the public as well.
Standard of Confusion
The Hon’ble court also considered what the standard of confusion should be from the perspective of a person who is aware of the functions of a search engine. The court was of the view that we have come a long way from Amritdhara Pharmacy vs. Satyadeo Gupta and that one cannot assume that a person using a search engine is ignorant of the functioning of the search engine and would proceed that every advertisement on the search engine is associated with the search query.
INITIAL INTEREST CONFUSION
The court drew a distinction between initial interest and initial interest confusion. The Courts across the world have been looking at the applicability and width of Initial Interest Confusion.
The Hon’ble Court here drew a distinction between initial interest confusion and initial interest and was of the view that even if confusion is temporary, the principle would be attracted. However, mere diversion without confusion is not actionable. In other words, if a user types out the name of an advertiser A, and an ad of an advertiser B appears, if a consumer is confused about the source of the advertisement assuming that it’s from A, then that would be an actionable claim. However, if the ad of Advertiser B is clearly labelled and there is no confusion as to source and yet the consumer goes there, then it’s more a case of initial interest and not a case of initial interest confusion and therefore not actionable.
The Hon’ble Court separately also considered whether this would amount to infringement under Section 29(4). The Hon’ble Court observed that a trademark is infringed under Section 29(4) of the Trademark Act if a mark identical or similar to the registered trademark is used in respect of goods or services not covered under the registered trademark and its use in the course of trade takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trademark. Given that section 29(4) deals with unrelated goods or services, Section 29(4) was held to be not applicable in relation to similar goods or services.
In relation to the elements of Section 29(4) the Hon’ble Court held “This would depend upon the facts of each case. However, the contention that use of trade marks, absent anything more, would amount to infringement of the trademark simply for the reason that the same is used to display advertisements, is erroneous. The use of trademarks as keywords in the Ads programme does not, per se, amount to without cause, taking an unfair advantage of the trademark; nor can be construed as detrimental to the distinctive character or repute of the trademark. Keywords are, essentially, used to identify the persons who may be interested in the sponsored Ads. Undoubtedly, Google and the advertisers draw certain advantage by using keywords, which are similar to trademarks, in as much as they use the same to identify users, who are probably interested in the goods and services covered by the registered trademark. However, every advantage drawn by use of a trademark cannot be termed as drawing, unfair advantage of the trademark, without cause.”
The Court also considered whether Google is absolved of any liability by virtue of section 79 of the Act and to this extent the Hon’ble court was of the view that Google’s involvement in the Ads programme denies it the right to claim that it is a passive intermediary.
PASSIVE AND ACTIVE INTERMEDIARIES
In my view this needs to be considered particularly because the definition of an intermediary under the Information Technology Act does not draw a distinction between a passive and a non-passive or active intermediary. An intermediary is essentially based on the activity that is carried out on behalf of another in relation to an electronic record. The coordinate bench of the Delhi High Court in Amazon Seller Serviced Pvt. Ltd. Vs. Amway India enterprises pvt. Ltd. & Ors. (2020) 81 PTC 399 (DB) has not agreed that there is a distinction between a passive and active intermediary and therefore we could be in a position where we have two Division benches with varying views. However, one must bear in mind that the issue of intermediary only arises if there is an infringement, where in the present case it was held that the activity per se is not infringing
Intermediary and contributory Infringement
Section 79 of the Information Technology Act is only a defence provision (you can’t for instance be liable under Section 79 of Information Technology Act) and in the absence of infringement, Section 79 does not come into play. Logically, if there was an infringement under the Trademarks Act, the argument then would arise as to what is the violation, if at all, by Google. The Hon’ble Court has dealt with this in the context of Contributory Infringement. The advertisement, which is really the confusing element, if at all, is created by the advertiser and therefore it’s arguable that there is no direct infringement by Google, even if the ad is confusing. Therefore, the court looked at contributory infringement and said that in a given case, if it’s brought to Google’s attention and Google does not pull down the ad, then Google could be held to be contributory liable. In a sense, the principles of contributory liability, (though I question whether the Trademarks Act in India does have a notion of contributory liability), are similar to the principles of Section 79 where the entity is put to notice and if it doesn’t react, then it may be liable. Also, the steps laid down under the portion of the Judgment relating to Contributory Liability is similar to the directions of the Hon’ble Single Judge (to the extent of notice to take down) and the Hon’ble Division Bench upheld the final directions of the learned Single Judge wherein the directions, inter alia, envisaged a notice to Google LLC. from the Plaintiff bringing to notice the advertisement that is infringing.
Policybazaar Insurance Web Aggregator vs. Coverfox Insurance Broking Pvt. Ltd. and others:
Policybazaar Insurance Web Aggregator vs. Acko General Insurance Ltd. and others.
The above two matters were argued before the Hon’ble Single Judge of the Delhi High Court while the Division Bench was hearing and thereafter reserved the DRS appeals. The Hon’ble Single Judge had reserved judgement in the Policybazaar matters but relisted the matter on a day enabling all parties to make submissions in the light of the Division Bench order.
The Hon’ble Single Judge has dismissed the interim application of the Plaintiff. The Court has relied on the Judgement of the Division bench of the Delhi High Court and held the following:
- Use as a keyword amounts to use under Section 29(6) of the Trademarks Act.
- Google (the Google entities were defendant No. 2&3 in present action) can also be said to be using the marks.
- Use of a mark as a keyword per se is not infringement.
- The Hon’ble Single Judge while relying on the Division Bench in a context of Initial Interest Confusion held that mere use of the Trademark as a keyword. sans further materials to show that it causes confusion or deception, would not amount to infringement of the Trademark.
In relation to the applicability to the present case, the Hon’ble Single Judge compared the advertisements that were triggered by the keyword and found that there was no confusion as the advertisements were clearly labelled as such, and were clear as to source of origin. In fact, it was not the Plaintiff’s case that the advertisements were per se deceptive or may create or may result in confusion. The Plaintiffs grievance was more a case of keywords being per se infringing which claim was dismissed.
Another important element considered in this case was that the Plaintiff themselves were using the Trademarks of the defendant No. 1 in both matters as keywords. The Court held that the fact that the Plaintiffs, themselves, were admittedly using the registered trademarks of the defendant No. 1 in the two suits as keywords till before the filing of the present commercial Suits, they have therefore accepted this as a fair and honest commercial practice. The Plaintiff cannot now be heard to be complaining against the same merely because they have now realised that others may be gaining more advantage of their trade marks rather than in the reverse.
The Hon’ble Court further held that the Plaintiffs, having concealed in the plaint, the fact of them using the trade marks of the Defendant No. 1 in the two Suits as a keyword in the Google AdWords Program, have, even otherwise, disentitled themselves to grant of any discretionary relief from the Court. Mere payment of costs imposed by this Court vide orders dated 28.05.2019, would not wash away the taint and the effect of such concealment by the Plaintiffs.
In a nutshell, from both these sets of cases, it is evident that it is the Advertisement or Link which is triggered by the keyword that one needs to consider while assessing Confusion and not the keyword alone/Per se.