Two rulings of the Delhi High Court on the use of trademarks as keywords by the Google Ads Program

In 2023, a Division Bench of the Delhi High Court had the occasion to decide two appeals by Google LLC (Google), which challenged orders arising from the orders of two separate Single Judges of the Court. Both appeals pertained to the issue of the use of trademarks as keywords in the ‘Google Ads Program’.

The Google Ads Program enables sponsored search results (Ads). Under this, one can reserve one or more keywords to obtain a top place in the Search Engine Results Page (SERP) when such keywords are entered as a search query. As an example, if the company that makes Lexus-branded cars were to reserve ‘Audi’ as a keyword, any searches entered for ‘Audi’ cars would first display a link to Lexus’s website. 

In the first of such appeals (Google LLC v. DRS Logistics (P) Ltd. & Ors) decided in August 2023, Google challenged the interim order of a Single Judge involving the marks of the well-known Indian mover and packer company, DRS Logistics (P) Ltd (DRS).

Before the Single Judge, the plaintiff-respondent DRS argued that Google actively encouraged the use of its registered trademarks as keywords for third parties to display their sponsored links through its Ads Program. Further, DRS argued that Google charged a higher amount if one wanted to display the links to their websites on the top of the SERP. DRS claimed that such activities of Google constituted an infringement of its registered trademarks.

The Single Judge allowed DRS’ interim application and held that the invisible use of trademarks to divert the traffic from a proprietor’s website to an advertiser’s website would amount to the use of a mark under the provisions of the Trade Marks Act, 1999 (TM Act). The Single Judge noted that the use of trademark as a keyword may be fair use in some cases, but that Google was obligated to ascertain that the keyword chosen by an advertiser is not a trademark. Further, the Single Judge held that Google was disentitled to claim the exemption given to intermediaries under Section 79 of the Indian Information Technology Act, 2000. Google challenged this order in the appeal before the Division Bench.

The Division Bench, after due consideration of the submissions by the parties, upheld the findings of the Single Judge. Some of the key observations of the Division Bench are summarized below:

• Google ‘uses’ trademarks - Prima facie, using trademarks as keywords in the Ads Program is a use by Google too, where Google derives a distinct advantage. Google actively encourages and suggests the use of the keywords, determines the ads displayed on the SERP, and auctions keywords, including trademarks. Hence, it is difficult to accept that while Google sells keywords for use in its proprietary software, it does not use them;
• ‘Use’ of keywords per se is not trademark infringement - A trademark registration does not grant its proprietor monopoly over the SERP that contains its trademark. In a brick-and-mortar world, it would not be construed as infringement if customers looking for a product are also offered products of competitors. It is not illegal to use trademarks as keywords to seek the attention of internet users who may find information on goods and services covered under the said trademark as relevant;
•  Need to balance trademark rights with Google’s right to carry on business - Trademark proprietors are aggrieved if internet users searching for their trademarks are diverted to websites of other entities, including their competitors. Thus, in one sense, their trademarks are used to divert their business away from them. At the same time, the success of a search engine depends on the relevancy of results yielded by it. Hence, there are competing rights and interests to be balanced;

“Unlike trademarks, keywords do not perform any source-identifying function of the goods or services. Hence, in keyword advertising, the use of trademarks by an advertiser or Google is not such as can be perceived as use of a trademark to constitute infringement.”

• Keywords do not perform source-identifying functions - Under Section 29(1) of the TM Act, it is an infringement, if a third party uses, in a source-identifying manner, an identical or deceptively similar registered trademark in the course of trade on goods or services for which it is registered. Unlike trademarks, keywords do not perform any source-identifying function of the goods or services. Hence, in keyword advertising, the use of trademarks by an advertiser or Google is not such as can be perceived as use of a trademark to constitute infringement; 
• A brief period of confusion is sufficient for infringement: Under Section 29(2) of the TM Act it is an infringement for a third party to use in the course of trade, a mark which is identical or similar to a registered trademark respectively on similar or identical goods, or use an identical mark on identical goods, if such use is likely to cause confusion or an association with the registered trademark. Section 29(2) is triggered when use of a mark results in confusion or indicates any association with the registered trademark. The use of a trademark as a keyword to display a sponsored link must have a likelihood of confusion. However, the mere generation of interest in the link without any likelihood of confusion cannot be construed as infringement under the section. Even if the confusion is for a short duration and an internet user can recover from the same, the trademark would be infringed under Section 29(2) of the TM Act; and
• Every advantage drawn from the use of a trademark is not an unfair advantage - Section 29(4) of the TM Act makes it an infringement if a third party uses a mark identical with or similar to a registered trademark having a reputation, for dissimilar goods or services, when such use would take unfair advantage of such reputation. In such cases, it is necessary to determine whether such use amounts to unfair advantage and is detrimental to the distinctive character or repute of the registered trademark. Every advantage drawn by use of a trademark cannot be termed as drawing unfair and undue advantage. Identifying customers who may be looking for goods or services of a particular brand for offering them alternatives is not unfair. Nor is it deceitful by itself to use trademarks as keywords to identify internet users who may be interested in the Ads. The use of a trademark as keyword, absent any element of blurring or tarnishing of the trademark, is not detrimental to the character or repute of the trademark. An action for infringement would lie only if the Ads displayed are found to be detrimental to the distinctive character or repute of the registered trademark.

In second appeal decided in December 2023 (Google LLC v MakeMyTrip India Private Limited & Ors), the trademarks in question belonged to a travel business company, MakeMyTrip India Private Limited (MIPL).

MIPL, the respondent in the appeal, had sued Google before the Single Judge seeking an interim injunction against infringement and passing-off of its trademark, MakeMyTrip. MIPL also sought an injunction against Google to ensure that its competitor Booking.com, another defendant in the suit before the Single Judge, does not promote their business by using MIPL’s trademarks as keywords in the Google Ads Program. 

The Division Bench referred to its findings above in Google LLC v DRS Logistics (P) Ltd. & Ors, while setting aside the Single Judge’s order. It held that, in the absence of any confusion on the part of the internet user, the use of the keyword by Booking. com for its advertisements did not result in infringement of the trademark MakeMyTrip. This finding was supported by the Division Bench basis the fact that, while searching for ‘MakeMyTrip’ on Google’s search engine, in seven cases out of ten, Booking.com’s sponsored link appeared in the second position to MIPL’s link. Noting that Booking. com is a well-known and popular platform offering travel services, the Court found it unacceptable that an internet user would be likely to be misled into believing that the services of Booking.com are those of MIPL. Nor did the Division Bench agree with the Single Judge that the use of keywords amounted to taking unfair advantage of the trademark, because the services offered by both MIPL and Booking.com were identical in nature.