Coram: HMJ Vibhu Bakhru and HMJ Amit Mahajan

Why appeal was preferred?

Single Judge’s vide Judgement dt. 30.10. 2021 allowed Respondent’s Injunction application.

What exactly was directed vide the impugned Judgement?

Plaintiff (Ptf.) can seek protection u/s 28 of the TM Act, but cannot have right on surnames/generic words like Packers or Movers individually. Subject to this limitation, Injunction application was allowed in following manner:

1. Defendant (Def.) 1-3 to investigate any complaint made by plaintiff alleging use of TM and its variation as keywords resulting in diversion of traffic form Ptf’s website to that of advertisers.
2. Def. 1-3 to investigate and review overall effect of an Ad to ascertain that same is not infringing/passing off the Ptf’s TM.
3. If its passing off / infringement, then Def. 1-3 shall restrain advertiser from using same and block/remove such ad.

Ratio of impugned Judgment:

Use of TM as keywords in Google Ads Program amounts to ‘use’ under TM Act and thus may constitute infringement. Google will also be not entitled to defence of an intermediary under Section 79 of the IT Act 2000.

Facts:

Appellant: Google | Resp. – 1: DRS Logistics P. Ltd. | Resp. – 2: Agarwal Packers and Movers P. Ltd. [Resp. 1 and 2 collectively referred as DRS, which are leading packaging, moving and logistics service providers in India.]

DRS’s registered TM is ‘Aggarwal Packers and Movers’.

What was the allegation against Google?

That Google actively encourages use of respondent’s., registered TMs as keywords for 3^rd parties to display their sponsored links, which amounts to TM infringement.

The Ads Programme (Previously known as Google AdWords):

Advertisers can create and display online ad w.r.t their websites. Said adv. Appears on first page (SERP – Search Engine Result Page). One can reserve a keyword. Say Lexus India, may reserve ‘Audi’, wherein anyone searching Audi, the Google will shows result of ‘Lexus India’ on top of Search result.

Advertiser first create new campaign for advertisement. Advertiser then set an ‘avg daily budget’, then chooses targeting options like location/languages/etc. Then keyword is chosen. On typing those keywords by user, the ad will get triggered.

Google provides ‘keyword planner tool’ to assist user in selecting a keyword. The tool shows the advertiser, the volume of searches made for that particular keyword.

Then advertiser bid for that keyword. Advertisers don’t pay on impression i.e., how many times it appears on SERP. Rather it’s paid on basis of ‘how many times it was clicked – Pay per Click (PPC)’. Advertiser also pay bid qua the maximum price they are willing to pay if user clicks i.e., ‘Max CPC’.

The sequence on which Ad will be placed is also decided on basis of ‘Click through rate’ (CTR). Google estimates rate at which viewers will click an ad. More CTR – More relevant keyword. Google also check if landing page experience (website – user experience) and how closely ad is likely to match user’s search.

The above factors are used by Google to estimate Quality Score. High Quality Score and bid amount of advertiser creates the position at which ad will appear in SERP. Advertiser pay more and improve quality of website to improve Ad position. Ad’s position at top of SERP will yield more CTR.

Present case:

On googling the word ‘AGGARWAL PACKERS AND MOVERS’, 3^rd parties sites like ‘www.safepackersmovers.com’ and ‘www.dtccargopackers.com’ used to come on SERP. These sites have no connection with DRS.

Google’s contentions:

Use of keywords does not amount to ‘use’. Even if considered ‘use’ under TM Act – It will be a ‘use’ by advertiser and not Google per se. Google also sought ‘safe harbour’ protection under Section 79 of IT Act.

Use of trademark as keyword not per se infringement of a trademark. The said position have been accepted by courts across jurisdictions of UK, USA, EU, Australia, NZ, Russia, South Africa, Canada, Spain, Italy, Japan and China.

In India, test of confusion is based on perceptibility of mark by consumer in terms of visual, phonetic and structural similarity. Since keywords are invisible, to consumers, necessary element of confusion is absent. In absence of confusion – no infringement.

Rebutted Ld. SJ’s reasoning – Meta Tags and keywords are different. Meta tags are website descriptors and keyword is word provided by advertiser. Meta tag neither used by Google in organic search result or as part of sponsored link. Meta-tags are an outdated form of tech that is not used by Google for over a decade and not equivalent to keywords.

Diversion of internet traffic on account of use of TM as keywords is matter of trial. Requires evidence to be led on issue and can’t be decided at interim stage.

Google is entitled to safe harbor, since it has a content neutral role as advertisement as well as keywords comprises of 3^rd parties.

DRS’s contentions:

Google can’t claim ‘safe harbour’ protection under Section 79 of IT Act. It actively participates in promoting sponsored Ads. It itself determine ‘keywords’ which is relevant to goods and services of advertisers. Hence its not a passive intermediary as claimed.

Keyword and Meta tag perform similar functions.

Keyword planner tool clearly satisfies necessary element for infringement of trademark. Google through use of said tool informs advertiser about DRS’s TM. Google relied on various international decisions that held that invisible use of TM in keywords does not amount to ‘use’ and same is erroneous, since none of those cases discuss Keyword Planner Tool. Use of TM by said tool is not invisible but visible to advertisers.

Issues:

• whether use of the trademarks as keywords amounts to use of those marks for the purposes of Section 29 of the TM Act;
• if so, whether such use is that of the advertiser or by Google as well;
• whether the use of the trademark as keywords per se amounts to infringement of a trademark; and
• if so, whether Google is absolved of its liability in respect of use of trademarks as keywords by virtue of being an intermediary under Section 79 of IT Act

Whether use of the trademarks as keywords amounts to “use” under TMA?

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 TM Act.

The use of a trademark as a keyword by an advertiser for the purposes of displaying its advertisements on the Search Engine, is use of the mark in relation to the goods and services offered by an advertiser.

if so, whether such use is that of the advertiser or by Google as well;

Google actively promotes and encourages the use of trademarks identified with the leading goods and service providers-which apparently yield a higher incidence of search queries in respect of a particular category of goods and services-as keywords by suggesting the same and further monetizing their value. In our view Google’s PPC model, which actively uses keywords, derives a distinct advantage by use of trademarks as keywords.

whether the use of the trademark as keywords per se amounts to infringement of a trademark;

use of a registered trademark as a keyword, absent of any confusion, dilution, or compromise of the trademark, would not amount to infringement of the trademark.

Use of a trademark as keyword is, essentially, to seek the attention of the internet users who may find information relating to goods and services covered under the said trademark as relevant. We find nothing illegal in seeking out such internet users as targets for advertisements that they may find relevant.

Any person using an internet search engine such as that operated by Google for finding information relating to a search query is obviously aware that all search results may not be relevant.

Clearly, the facts of each case are required to be considered in determining whether in a given case use of a trademark as a keyword amounts to infringement under the TM Act

the use of the trademark as a keyword coupled with the display of a sponsored link must have real likelihood of confusion. Mere generation of interest in the sponsored link without any likelihood of confusion cannot be construed as infringement of a trademark. It is necessary to be careful to not conflate initial interest with the Doctrine of ‘Initial Interest Confusion’. Thus, sponsored links may be relevant to the search query and what the internet user is searching for. It may thus generate interest that would obviously not constitute infringement of a registered trademark under Section 29(2) of the TM Act, if there is no deception or confusion.

Contributory Infringement by Google?:

It is not necessary for us to consider this aspect in any detail at this interlocutory stage. The same would be a matter of trial provided DRS has laid a foundation for the action of contributory infringement in its pleadings and it produces evidence to establish the same.

Google – Liability under Section 79 IT Act?

the said benefit would be unavailable to Google if its alleged activities are found to be infringing DRS’s trademarks

Conclusion:

Google’s use of the trademarks as keywords does amount to use in advertising under the TM Act.

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 post Google vs. DRS Logistics: Case analysis appeared first on LexForti .

Ombudsman for digital transactions
Digital transactions mean any seamless payment transaction affected without the need for cash. This extends to any payment transaction accomplished through electronic means without physical cash involved. To prevent scams and loss of finances, digital transactions should be regulated without breaching customer privacy.

In a previous post, we discussed the Ombudsman Scheme for digital transactions as established by the Reserve Bank of India (RBI). This scheme focuses on establishing a mechanism for resolving complaints of customers regarding digital transactions. This aims to reduce fraud and ensure that the terms of digital payments remain transparent among customers.

Foreign exchange transaction limits

One of the effects of India’s fintech growth is the increased access to foreign exchange markets. People can use online trading platforms to trade forex from the global currency market — accessing over 100 currency pairs without delays. In fact, many people turn to forex trading to make additional income and grow their wealth. At the same time, people may also need to exchange foreign currencies for traveling abroad or transferring money overseas.

As foreign exchange has become more common, the RBI established foreign exchange regulations such as limits to foreign currency transaction amounts (Rs 50,000) and limits to foreign currencies being purchased (up to USD 2,50,000 or its equivalent in any other currency). This is done to maintain stability in exchange rates and hopefully attract further foreign investment as a result.


The rise of RegTech

Another key aspect of fintech regulations in India is the rise of regulatory tech (or RegTech). Regulatory bodies often announce and implement new frameworks and regulations to undertake proper due diligence and ensure ethical and fair business conduct. New technologies, like RegTech, are put in place to help fintech companies keep up with and maintain compliance.

Most regulatory technology solutions in India today focus on know-your-customer (KYC) and anti-money laundering (AML) compliance. In case of red flags or transaction errors, KYC and AML compliance helps financial institutions monitor their customers’ transactions for suspicious activity. RegTech can help by using technology to automate compliance, improve data management, enhance security, and offer greater transparency to customers.

Digital lending guidelines

Finally, fintech regulations also extend to digital lending. The digital lending industry in India has seen significant growth over the past years, making it a key component of India’s fintech sector. This growth is attributed to the reluctance shown by traditional financial institutions to lend money or credit to low-income and credit-deficient entities in the country. As a result, fintech solutions like digital lending have become a more accessible alternative for people.

In 2022, RBI updated their digital lending guidelines to smoothen the digital lending process and protect consumers from unusually high-interest rates of lenders. The new guidelines would keep tabs on unethical loan recovery practices, such as automatic credit increases without the borrower’s consent. The new guidelines also required all regulated entities to have a suitable nodal grievance redressal officer to handle fintech and digital lending-related complaints, creating a necessary and reliable human element in the digital and automated landscape.

The post A Guide to Fintech Regulations in India appeared first on LexForti .

What are the kinds of issues a Game Developer faces while dealing with Game Publishers?

In the current situation with the pandemic, game developers have had to face many problems. The most obvious one is the unrealistic and overly ambitious approach. It’s well-known that a game is successful when a singular point is focused and perfected. Game publishers do not want to risk titles with no attraction point. The real conflict arises when publishers and developers fail to communicate with each other. This effectively kills any collaboration between the two parties as publishers never take a financial risk, even if they like the idea of a game. Many game developers like to keep the contents of their game a secret, adding fire to the fuel.

What are the ways through which one can optimize their experience while dealing with publishers?

The best way to optimize experience when dealing with game publishers is to just form the habit of listening. Publishers tend to get very protective of their investments. Furthermore, games present a high-risk, high-reward prospect, they cannot trust any developer unless proper communication is established.

Get yourself a Game Publisher Contract – Contact us

Kindly also tell us how game developers approach publishers.

Typically, game developers should approach publishers with a credible game submission. This is highly important because the gaming industry is getting
more specific day by day. Any lapse in concentration and failure to meet a publisher’s requirements can waste a game developer’s effort and time. Game
creators usually take their time, so the chances of getting published increase.

Watch this video on YouTube.

Framing the Monetization Model

One of the most difficult and important aspects of game development is figuring out how to monetize your game. This is especially true for developers who are working with publishers, as the publisher will usually have the final say over how the game is monetized. There are a few different ways that games can be monetized, and each has its own pros and cons. The most common monetization models are microtransactions, subscriptions, and advertising. If a publisher is not content with the way that a game is being monetized, they may push for changes to be made. This can be a difficult process for developers, as they may not agree with the publisher’s vision for the game.

The post  Issues faced by Game Developers while dealing with Game Publishers appeared first on LexForti .

In the last couple of years, interest in NFTs has exploded.  Every day multiple NFT projects are being launched, and prospective NFT buyers are hoping theirs is the one to “go to the moon.”  There are several factors that can make an NFT valuable, although none of these alone can guarantee that an NFT will become the next Cryptopunk.

Content and Identity of the Artist – NFT value is initially dictated by its quality and look.  Like with any piece of art, it’s the first thing people see.  A related and important factor is the identity of the artist, which plays a key role in dictating value.  NFTs including art created by well-known artists, like Banksy for example, are immediately valued much higher than those of an unknown artist. 

Hype and Endorsements – the success and initial value of an NFT project is dictated by the hype generated leading up to the initial NFT sale.  Many celebrities are associating themselves and promoting NFT projects, with one of the latest celebrities being Snoop Dogg.  These endorsements add appeal, as well as credibility.

Exclusivity/Rarity – NFT creators decide how many NFTs to mint.  The law of supply and demand is very applicable here.  A one of a kind NFT is generally more valuable than 1,000 editions of the same image or media.  Even with projects that create thousands of NFTs with the same theme (e.g. Bored Apes, CryptoKitties), value is dictated by the rarity among the characteristics of each particular NFT.  For example, only a small percentage of Bored Apes were minted with gold fur.  Thus, those are seen as more exclusive and valuable than those with the more common gray fur.

Community and Brand – NFTs can gain value over time by building a reputable brand and supportive community.  The Bored Ape Yacht Club is a prime example.  Bored Apes initially sold for less than $200 and now regularly trade for six-figures.  In addition to the initial hype surrounding the project (10,000 NFTs sold out in just hours), the Bored Ape community has been able to curate their brand such that they are one of the most well-known NFT projects in the space.  Many celebrities, including Eminem, Jimmy Fallon, and Mark Cuban have bought Bored Apes, further adding to the value of the brand.  

Early & Original Collections – Over the last year or so, we’ve seen the value of early NFT projects explode.  Larva Labs’ Cryptopunks was one of the first NFT projects on Ethereum, and they are some of the most valuable NFTs today.  There is something to be said for being a holder of an early NFT work.  Just as original and historical artwork has more value in the real world, more “original and historical” NFT collections are seen as more valuable.

Rewards/Access Given –  Some NFTs will entitle their holders to special privileges, rewards, or royalties.  These NFTs are inherently considered to be valuable because there are direct benefits that holders can benefit from and can even be seen as investment products.

The way NFT’s get their value is due to them being a “piece” of the blockchain that hosts it. So for example, an NFT hosted on the Ethereum blockchain is interpreted by the network as several “blocks” that make up that NFT and who the owner is. However, NFT’s also benefit from their aesthetics and utility in either the real world or in the metaverse. Some NFT’s allow you to play games and earn, such as Axie Infinity or Nest Arcade. Others provide just aesthetic value, similar to collecting a piece of art, except you hold it “virtually”.

What causes a particular NFT to be more valuable than another depends on various factors, some which are intangible like social media hype. Some NFT’s carry their value from hype alone, even when the project is still under development and promises no guarantee on your ROI. So it’s always important to do your own research and understand the fundamentals, white paper and roadmap of any NFT project that you decide to invest on. After, you can dig into their social networks to gain a better perspective on how hyped the project is and if it’s trending.

Interesting Read: Expert Corner: Key areas while drafting an Artist Agreement

The post Expert Corner – How NFTs get their value? appeared first on LexForti .

INTRODUCTION

Ombudsman Scheme for Digital Transactions, 2019 (“the Scheme”) was established by the Reserve Bank of India (RBI). This scheme is a speedy and cost-free apex level mechanism for the resolution of the complaints of the customers who have undertaken the digital transactions. It came into effect from 31^st January, 2019 and it extends to the whole of India. The Scheme applies to the business in India of the System Participants.

WHAT IS A DIGITAL TRANSACTION?

Digital transaction as expounded under Clause 3 of the Scheme means “a payment transaction in a seamless system effected without the need for cash at least in one of the two legs, if not in both. This includes transactions made through digital/electronic modes wherein both the originator and the beneficiary use digital/electronic medium to send or receive money.” In other words, it means a transaction of payment in electronic mode without the need for cash.

OMBUDSMAN FOR DIGITAL TRANSACTIONS

Who is an Ombudsman?

Ombudsman for digital transaction (“Ombudsman”) means an officer of RBI who is appointed under Clause 4 of the Scheme. The definition of the same is defined in Clause 3(6) of the Scheme. He passes an award for the complaint made with respect to the Scheme.

Appointment of an Ombudsman

The RBI appoints one or more of its officers for the rank of Chief General Manager or the General Manager who is known as Ombudsman for digital transactions. He carries out the duties which are given to them by or under the Scheme.

What is his tenure?

The appointment of the Ombudsman is made for a period of not exceeding three years at a time.

How many Ombudsman are appointed and where are they located?

To date, there are 21 Ombudsman have been appointed with their offices in the state capitals mostly. Annexure I of the Scheme provides the details of the offices such as address and contact details.

Secretariat to the Ombudsman

Secretariat means an office constituted under Clause (1) of the Scheme. The Clause states that the RBI deputes a number of officers or other staff to the office of the Ombudsman because it is considered mandatory to act as the secretariat to the Ombudsman.

Jurisdiction, Power and Duties

The territorial limits of the Ombudsman are specified by the RBI to which the authority of each Ombudsman shall extend.

OBSERVATIONS OF THE SCHEME

• The objective of the Scheme is to provide speedy and cost-free complaint redressal for deficiency in customer services that are offered in the digital transactions which the non-bank entities regulated by RBI conducts.
• The main aim of this Scheme is to reduce fraud and ensure that the customers are trusting the terms of digital payments.
• The Scheme also witnesses in digital transactions a quantum leap and also monitors it by nullifying the threats that are present.

ENTITIES COVERED UNDER THIS SCHEME

The Scheme applies to System Participants defined under Clause 3(11) of the Scheme. The Clause states that a person excluding a bank who is participating in a payment system under Section 2 of the Payment Settlement Systems Act, 2007, not including System Provider.

WHEN AND WHERE CAN THE COMPLAINT BE FILED?

For grievance redressal, the complainant should first approach the concerned System Participant. The complainant can approach the Ombudsman when the System Participant does not respond within one month after receiving the complaint or he rejects the complaint or in case the complainant is not satisfied with the reply given by the System Participant. In all the aforementioned cases, the complainant can approach the Ombudsman within whose jurisdiction the System Participant’s branch or office is located.

In case of a complaint that arises out of services with the centralized operations then it shall be filed before the Ombudsman within whose jurisdiction the customer’s billing or declared address is located.

GROUNDS OF COMPLAINT

Clause 8 of the Scheme states the grounds of the complaint. It states that any person can file a complaint cost free to the Ombudsman who have the jurisdiction on the grounds of deficiency of service by the System Participant. The following are some of the grounds:

Prepaid Payment Instruments

1. Prepaid payment instruments– in case the System Participant non-adhere to the RBI’s intructions about prepaid payment instruments on any of the following:
2. When there is a failure in crediting the merchant’s account in reasonable time;
3. When there is a failure in loading the funds in wallets/cards within a reasonable time;
4. There is an unauthorized electronic fund transfer;
5. When there is a failure in refund within a reasonable time or refusal to refund in case of unsuccessful or rejected or returned or cancelled transactions;
6. When System Participant non-adhere to any of the instructions of RBI;
7. If there is non-transfer or refusal to transfer in a reasonable time or even if there is a failure to transfer, the prepaid payment instruments balance to the holder’s own bank account or back to the source at the time of prepaid payment instruments closure, expiration of validity period, etc.

Mobile or Electronic Fund Transfer

1. Mobile or Electronic fund transfer– in case the System Participant non-adhere to the RBI’s instructions about mobile or electronic fund transfer on any of the following:
2. There is a failure in effecting the online payment or transfer of fund in reasonable time;
3. There is unauthorized electronic fund transfer;
4.  When System Participant non-adhere to any of the instructions of RBI on mobile or electronic fund transfer;
5. There is failure to act within the time period upon stop-payment instructions and under the notified circumstances to the customers within the mentioned time period;
6. When there is a failure in reversing the amount debited from the customer account within the prescribed time period in the failed payment transaction cases.
7. When the funds that are transferred wrongly to the beneficiary account because of lapse at the end of System Participant are non-reversal or failed to reverse within a reasonable time.

PROCEDURE FOR FILING OF COMPLAINT

A complaint can be filed with the Ombudsman by writing on a paper and sending it to the concerned Ombudsman office either by post or hand delivery. The complaint can also be filed by email to the Ombudsman.

REJECTION OF COMPLAINT

The complaint can be rejected by the Ombudsman at any stage in case it appears to him that the complaint:

• Is not made under the grounds of complaint specified under Clause 8 of the Scheme.
• Against the System Participant was made, was not covered under the Scheme.
• Has not addressed the concerned System Participant first for the redressal.
• Is beyond the limits of compensation.
• In case the subject matter of the complaint that is pending is already dealt with in some other forum such as a court of law or consumer court.
• The subject matter is the same which had been already dealt by the Ombudsman in earlier proceedings.
• Is frivolous and vexatious.
• Covers the disputes that are mentioned under Section 24 of the Payment and Settlement Systems Act, 2007.
• The disputes are related to the transactions between customers.
• Is not persuaded diligently by the complainant.
• The Ombudsman is of the opinion that there is no loss or harm or inconvenience caused to the complainant.

AGRRIEVED WITH THE AWARD

In case the complainant is unsatisfied with the award, the Scheme provide an appellate mechanism for both complainant and System Participant. Any complainant aggrieved with the award passed by an Ombudsman can approach the Appellate authority.

TIME LIMIT FOR FILING AN APPEAL

An appeal can be filed against the award or the decision of the Ombudsman rejecting the complaint within a period of 30 days from the date of receipt of communication of award or the rejection of the complaint.

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