Google vs. DRS Logistics: Case analysis

Case details: Google LLC v. DRS Logistics P. Ltd. & Ors., FAO (OS) (COMM) 2/2022

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