Google Not Exempted From Liability Of Trademark Infringement When Trademarks Are Used As Keywords In Its Ads Programme: Delhi High Court

The Delhi High Court has ruled that Google is not entitled to the safe harbour protection under the Information Technology Act, 2000, as well as from the liability of trademark infringement where it uses a trademark as a keyword in its Ads Programme.

“It is difficult to accept that Google is entitled to exemption under Section 79 of the IT Act from the liability of infringement of trademarks by its use of the trademarks as keywords in the Ads Programme. It can hardly be accepted that Google can encourage and permit use of the trademarks as keywords and in effect sell its usage and yet claim the said data as belonging to third parties to avail an exemption under Section 79(1) of the IT Act,” a division bench of Justice Vibhu Bakhru and Justice Amit Mahajan said.

The bench noted that while Google did not permit use of trademarks as keywords prior to 2004, it amended its policy thereafter for increasing the revenue and introduced the tool which actively searches the most effective terms including well known trademarks as keywords.

“It is verily believed that in the year 2009 Google estimated that use of trademarks as keywords would result in incremental revenue of at least US Dollar100 million. Google is not a passive intermediary but runs an advertisement business, of which it has pervasive control. Merely because the said business is run online and is dovetailed with its service as an intermediary, does not entitle Google to the benefit of Section 79(1) of the IT Act, in so far as the Ads Programme is concerned,” the bench said.

The court was hearing Google’s appeal challenging a single judge order passed on October 30, 2021, which held that Google cannot absolve itself from the liability of ensuring that a keyword is not an infringement of trademark. The single judge had held that Google is not entitled to the defence of an intermediary under Section 79 of the Information Technology Act, 2000.

The suit was originally filed by DRS Logistics to restrain Google India, Google LLC and Just Dial from using or permitting third parties to use its registered trademark “AGARWAL PACKERS & MOVES or DRS LOGISTICS” either as a keyword or as a meta tag or as a trademark.

The single judge had directed Google to investigate any complaint made by DRS Logistics alleging use of its trademark and variations as keywords resulting in the diversion of traffic from their websites to that of the advertiser.

In appeal, the division bench found no infirmity with the single judge’s conclusion and held that Google’s use of the trademarks as keywords amounts to use in advertising under the Trademarks Act.

“We also find no infirmity with the conclusion of the learned Single Judge that if it is found that Google has infringed DRS’s trademark or is contributorily liable for the same, the benefit of safe harbour under Section 79(1) of the IT Act would not be available to it,” the court said.

The bench ruled that Google is not a “passive service provider” which merely permits the advertisers to use the keywords without using it itself. It said that Google’s Ads Programme actively suggests keywords that would result in the display of Ads which are likely to result in higher clicks.

“Prima facie, we are unable to accept the view that use of trademarks as keywords in the Ads Programme is use only by the advertisers and not Google. We reject the substratal premise that Google’s participation in the Ads Programme is limited to merely providing the tools and the technical framework for advertisers to use the keywords. As stated before, Google actively encourages and suggests use of the keywords,” the court said.

It added: “We are also unable to accept that the use of a trademark as keyword, absent any element of blurring or tarnishiment of the trademark, is detrimental to the character or repute of the trademark. However, if in a given case, the Ads displayed are found to be detrimental to the distinctive character or repute of the registered trademark, an action for infringement of the trademark would lie.”

Title: GOOGLE LLC v. DRS LOGISTICS (P) LTD. & ORS.

Citation: 2023 LiveLaw (Del) 675

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