AdWords Litigation in India

Many Business entities ranging from online service providers & retailers to entities confined to physical market place resort to Google AdWords as their key marketing channel for advertising their business model. As is known AdWords allow brand owners to market their products and services using a combination of keywords to display their ads whenever the selected terms are searched and the aspect of ‘trademark infringement’ arises when an entity bids on such AdWords on which another entity has trade mark rights, statutory or common and which consequently leads to diversion of internet traffic from the webpage of the owner of the trade markor by appearing at the top of the search results.

The Madras High Court dealt with the trade mark infringement on the Google AdWords in Consim Info Pvt. Ltd. vs Google India Pvt. Ltd. &Ors. Consim, an entity involved in providing online matrimony services had adopted various trademarks, including, Bharat Matrimony, Telegu Matrimony, Assamese Matrimony to name a few, filed a suit for injunction against Google and others to restrain it from offering its trademarks as AdWords by making the same available for bidding by third parties on its AdWord programs and to restrain the others respondents from bidding for the same trademark. It was Consim’s allegation that the acts of the Google and other respondents amounted to primary infringement as they were trying to ride on the goodwill and reputation of the trademarks built over the years by them. It was further argued that Google and other respondents were guilty for the act of unfair competition amounting to secondary infringement as the offering of the same AdWords enabled third party entities which did not limit to respondents to infringe the trademarks of appellant and pass off their services as that of the appellant on the Google Search engine.

The Single Judge of the Madras High Court had observed that Consim is entitled for injunction and later the division bench also affirmed the same. But an undertaking was given by Google India that it would not act in a manner so as to infringe the trademark of any entity, pursuant to its Trademarks Policy hence, the Court didn’t disturb that arrangement between the parties.

The aforesaid judgements held the field with respect to the issue of bidding on someone else’s registered trademark in the Google Ads programmed for almost a decade. Even though multiple suits were filed by parties alleging trademark infringement due to bidding on the party’s registered trademarks, most of the said suits were settled between the parties by giving cross undertakings regarding not bidding on each other’s trademarks. In view of the same, the jurisprudence in India in relation to the legality of bidding on registered trademarks in the Google Ads programme remained limited to the findings given in the Consim judgements.

In a recent judgement of August 10, 2023, the Delhi High Court Division Bench consisting of Justice Vibhu Bakhru and Justice Amit Mahajan has affirmed that such usage can constitute trademark infringement. The issue before the Division bench was whether the use of trademarks as keywords amouns to the use of those marks as infringement under Section 29 of the Trade Mark Act. The crucial point of issue emerged from the decision of a single judge, whose interpretation deemed the usage of trademarks as keywords as trademark infringement. This judgment was contested through an appeal filed by Google LLC and Google India Private Limited against DRS Logistics (P) Ltd. and Agarwal Packers and Movers Pvt. Ltd. The court's decision has prompted an examination of whether such usage constitutes trademark infringement or legitimate advertising practice.

After hearing detailed arguments by the parties and perusing similar cases filed in other jurisdictions, the Hon’ble Court held that bidding on registered trademarks of a third party would amount to “use”, under the Trade Marks Act, 1999. The division bench, as per the findings of the Single Judge, refused to limit the scope of 'use' to merely visual representations. Instead, it highlighted the broad language of the Act, suggesting that 'use' could extend to actions beyond the traditional notions of visual representation. The Hon’ble Court ultimately determined that using trademarks as keywords within Google's Ads Programme indeed falls under the category of 'use' in advertising as outlined in Section 29(6) of the Trade Marks Act. The Court emphasized that the concept of 'use in advertising' extends beyond the mere visual presentation of the trademark in an advertisement. Rather, the simple act of using a trademark as a keyword to initiate advertisements is indicative of 'use in advertising' as defined within the scope of the Act.

Further, 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. The Court noted that the Ads Programme is Google's commercial venture and the use of a trademark as keywords for display of advertisements in respect of goods or services clearly amounts to use of the trademark in advertising within the meaning of Section 29(6) of the Trademarks Act. The court also upheld that 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, in so far as the Ads Programme is concerned.

In conclusion, there is no doubt that keyword advertising is an effective method of online advertising as it targets customers while they are actively searching for information. However, the issue of keyword advertising and related trademark infringement is still evolving in India and this detailed judgment by the Delhi High Court Division Bench's ruling is a significant development in the law of trademark infringement.