ADIF welcomes Delhi HC’s ruling in trademark case

Trademarks being used as keywords by Google’s search engine for its Ads Programme makes it liable for infringement and no “safe harbour” protection as an intermediary can be claimed, the Delhi high court has said. The The industry body Alliance of Digital India Foundation (ADIF) has welcomed the Delhi High Court’s ruling.

“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 (Information Technology) Act, insofar as the Ads Programme is concerned,” a bench of Justices Vibhu Bakhru and Amit Mahajan said.
HC’s verdict came on an appeal by Google against the order of a single-judge bench on a lawsuit by Agarwal Packers and Movers Ltd, alleging that the use of its trademark and its variations as keywords on Ads Programme resulted in the diversion of traffic from the website of the plaintiff to that of the advertiser, whose bid may have been highest for the keyword.

Before 2004, Google’s trademark usage policy restricted trademarks from being used within a sponsored ad’s text. Google’s policy also restricted using keywords that were protected under a trademark if the owner of that trademark requested it. However, Google reduced the restrictions under the policy, which allowed Google to push trademarks as keywords, even if the trademark owner objected. Doing so though risked litigation against Google, Google moved forward as it generates higher revenue coming in as a result of the change in policy.
The directive emerged during a hearing by the High Court’s division bench, which was addressing Google’s appeal against a 2021 order issued by the Delhi HC. This earlier order had mandated Google to investigate whether the use of trademarks as keywords for advertisements constituted trademark infringement. In response, Google had argued that it was eligible for safe harbor protection as an intermediary under Section 79 of the Information Technology Act of 2002, a claim that was met with skepticism by the High Court.
Rejecting Google’s argument, the High Court observed that Google’s assertion of being a mere intermediary lacked credibility. The court pointed out that Google not only benefited significantly from keyword sales but also actively suggested keywords to advertisers, including competitors’ trademarks. Google’s Keyword Planner Tool was cited as evidence of this practice, enabling businesses to gain insights into their rivals’ trademark usage.
The court further noted that there appeared to be a prima facie encouragement from Google for advertisers to exploit keywords associated with trademarks to target their ads. This stance raised doubts about Google’s entitlement to intermediary exemptions. Ultimately, the division bench upheld the previous single-judge ruling, directing Google to undertake investigations and remove any ads found to infringe upon another entity’s trademark rights.