Trademark infringement and Google Ad keywords
Introduction: The case revolves around whether the use of a trademark as a keyword in Google Ads constitutes "use" under the Trade Marks Act, 1999 and if Google can claim protection as an intermediary under Section 79 of the Information Technology Act, 2000. DRS Logistics, the plaintiff, alleged that Google allowed third parties to use its trademark "Agarwal Packers and Movers" as a keyword, leading to traffic diversion to competitors' websites. Google contended that using trademarks as keywords did not amount to infringement under the Trade Marks Act and that it was protected under intermediary safe harbor provisions of the IT Act.
Factual Background: Google LLC, a US-based company, operates the Google Search Engine and Google Ads Programme. Its Indian subsidiary, Google India Private Limited, acts as a reseller of the Ads Programme in India. DRS Logistics is engaged in packaging, moving, and logistics services and owns the trademark "Agarwal Packers and Movers", which it claims has gained reputation and goodwill.
DRS alleged that competitors were using its registered trademark as keywords to appear in Google Ads, misleading customers and diverting traffic. The Google Ads Programme allows advertisers to bid for keywords, and Google ranks ads based on Quality Score and Maximum Cost Per Click (CPC). DRS claimed that Google's auction model encouraged trademark misuse for monetary gain.
Procedural Background:DRS filed a suit under Order 39, Rules 1 and 2 of the CPC for an injunction against Google from permitting third parties to use its trademark as keywords. The Single Judge ruled in favor of DRS, holding that using trademarks as keywords constitutes "use" under the Trade Marks Act, 1999 and that Google could not claim safe harbor protection under Section 79 of the IT Act. Google appealed against this decision before the Division Bench of the Delhi High Court.
Issues Involved: Whether the use of a registered trademark as a keyword in Google Ads constitutes "use" under the Trade Marks Act, 1999?
Submissions of the Parties: DRS contended that the use of its trademark in Google Ads led to consumer confusion and amounted to passing off. It argued that Google actively promoted the use of trademarks as keywords, allowing competitors to benefit unfairly from DRS’s reputation. DRS also claimed that Google’s Keyword Planner tool encouraged advertisers to select well-known trademarks to maximize ad visibility.
Google argued that the use of a trademark as a keyword did not qualify as use in commerce under the Trade Marks Act, 1999, as it was not visible to consumers. It relied on international decisions, including Veda Advantage Ltd. v. Malouf Group Enterprises Pty Ltd. (2016 FCA 255) and Intercity Group (NZ) Ltd. v. Nakedbus NZ Ltd. (2014 NZHC 124), where courts ruled that using trademarks as keywords does not constitute "use" for infringement claims. Google also asserted that it was a neutral intermediary and could not be held liable for advertisers’ actions under Section 79 of the IT Act.
Discussion on Judgments and Citations:The court examined multiple judgments on keyword advertising. It referred to the European Court of Justice's ruling in Google France SARL v. Louis Vuitton Malletier SA (C-236/08 to C-238/08), which held that using trademarks as keywords could amount to infringement if it caused confusion. The court also cited Rescuecom Corp. v. Google Inc. (562 F.3d 123 (2d Cir. 2009)), where a US court ruled that selling trademarks as keywords constituted use under the Lanham Act.
In contrast, the Australian case of Veda Advantage Ltd. v. Malouf Group Enterprises Pty Ltd. (2016 FCA 255) held that using a trademark as a keyword did not amount to trademark use, as keywords were not visible to consumers. Similarly, in NZ Fintech Ltd. v. Credit Corp Financial Solutions Pty Ltd. (2019 NZHC 654), the New Zealand High Court ruled that Google’s keyword advertising model did not amount to trademark use.
The court distinguished these foreign judgments by emphasizing that Indian trademark law does not require "visual representation" for use. It relied on Hamdard National Foundation v. Hussain Dalal (2013 SCC OnLine Del 2289), where the Delhi High Court recognized "invisible use" of trademarks as a form of infringement. The court also cited Amway India Enterprises Pvt. Ltd. v. 1MG Technologies Pvt. Ltd. (2019 SCC OnLine Del 9061), which held that meta-tags and keywords can infringe a trademark if they divert traffic from the trademark owner.
Reasoning and Analysis of the Judge: The court held that using trademarks as keywords in Google Ads qualifies as "use" under the Trade Marks Act, 1999, as it influences consumer behavior and affects market competition. It rejected Google's argument that keywords were invisible to consumers, stating that the economic function of a trademark is to attract customers, and any unauthorized use that diverts traffic undermines its purpose.
Regarding Section 79 of the IT Act, the court ruled that Google does not qualify as a passive intermediary because it actively participates in ad placement and profits from keyword sales. The court noted that Google curates ads using its algorithms and Keyword Planner tool, making it an active player rather than a neutral intermediary.
The court also emphasized that Google's policies differed across jurisdictions, restricting trademark use in Europe but allowing it in India, thereby failing to exercise a higher duty of care in protecting trademarks.
Final Decision: The court upheld the Single Judge’s ruling and directed Google to:
Investigate complaints regarding unauthorized use of trademarks as keywords. Review whether Google Ads result in trademark infringement or passing off. Remove ads that violate trademark rights. Google was denied safe harbor protection under Section 79 of the IT Act.
Law Settled in This Case: Using trademarks as keywords in Google Ads constitutes "use" under the Trade Marks Act, 1999. Such use can amount to trademark infringement if it misleads consumers or diverts traffic unfairly. Google is not entitled to intermediary protection under Section 79 of the IT Act if it actively participates in ad placement. Invisible use of a trademark (such as in keywords) can amount to infringement if it affects the economic function of the mark.
Case Title: Google LLC Vs. DRS Logistics (P) Ltd.
Date of Order: August 10, 2023
Case No.: FAO(OS)(COMM) 2/2022
Neutral Citation: Not specified
Court: Delhi High Court
Judges: Hon'ble Justice Vibhu Bakhru and Justice Amit Mahajan
Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi
