Going Back to First Principles – A Nuanced Understanding of Infringement in Google v DRS

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Aug 20, 2023, 6:13:38 AM8/20/23
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We are pleased to bring to you a guest post by Aditya Gupta on the recent Delhi High Court Division Bench order in Google v. DRS. Aditya is an attorney at Ira Law and represents Google in trademark litigation relating to keyword advertising. He graduated from National Law University, Jodhpur and then pursued a masters in law from Harvard Law School. Before co-founding Ira Law, he was part of another law firm for 7 years and then an associate at the chambers of Mr. Amit Sibal.

Going Back to First Principles – A Nuanced Understanding of Infringement in Google v DRS

Aditya Gupta

Let’s say you’re using a search engine to look for luxury cars. You are early in your decision-making process, and you have recently come across your friend’s Audi. You type in “Audi” in your search engine to start off your search for your dream car. Should the search results only show Audi’s official website or can a search engine show options other than the official Audi website, which may also include results for Porsche or Lexus?

These key questions i.e., what is the objective behind a user’s search and what is the purpose of a search engine form an important focal point of the Delhi High Court’s decision in Google v. DRS Logistics.

Brand owners, which are aggrieved by competitor ads, have alleged that Google’s Search Engine Results Page (SERP) should only contain results pertaining to the brand owner when the search term comprises or includes their trademark. Google has argued that such a claim is not actionable in trademark law and Google’s activities are beneficial for consumers.

To begin with, the Division Bench of the Delhi High Court recognizes that there are competing interests at play here. On one hand, trademark owners argue that business is being diverted to their competitors by this practice. On the other hand, the Court notes that Google operates a proprietary internet referencing service and is entitled to operate it in the manner it desires, so long as it does not fall foul of the law. As per the Court, the success of a search engine depends on the relevancy of results yielded by the search engine.

The other key consideration that the Court takes into account is that of the user – the Court notes that “the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous”. The user may be looking for reviews of the trademark owner’s products, or even looking at competitors who offer similar goods or services.

Balancing the various competing interests at play, the Court rejects the contention that the “Trademarks Act grants the proprietor of the trademark monopoly over the SERP yielded by a search query that contains the trademark”.

The Court examines various provisions of the Trademarks Act to reach this conclusion. As a threshold matter, the Court holds that when advertisers provide keywords on Google’s Ad program, they “use” the trademark “in advertising” under Section 29(6). As per the Court, Google also uses the trademark by assisting the advertiser in choosing keywords. However, the infringement inquiry doesn’t end with a finding of “use”. The Court thereafter proceeds to examine whether the use of keywords to trigger ads amounts to infringement. The Court holds that “use of trademarks as keywords, absent any confusion, unfair advantage, dilution or compromise of the trademark, is not infringement”.

With respect to Section 29(1) of the TM Act, the Court holds that this provision requires that the use of the trademark must be such that it is likely to be taken as use as a trademarkSince keywords do not perform any source-identifying function, the Court holds that Section 29(1) is inapplicable.

With respect to Section 29(2), the Court holds that the analysis will turn on the likelihood of confusion. The Court specifically holds “if the Ad or link displayed does not lend itself to any confusion”, the grievance regarding the use of its trademarks as keywords in the Ads programme is not actionable. In other words, in the author’s understanding, if the sponsored link displayed on the search results page is not confusing as to its source, it is not actionable. The Court holds that the use of keywords to identify customers is not per se deceitful. The Court notices that there are several brick-and-mortar examples where a rival competitor’s products are offered to a consumer looking for a product. The Court observes that there would be “nothing illegal if an entity engaged in commerce puts its advertising billboard next to an exclusive store of its competitor. It is also permissible for a competitor to buy shelf space next to competing goods of a well-known brand”.

In this context, the Court holds that “merely because a search query continues to remain in the main bar (and not search results) on the screen, is no reason for an assumption that there is an association” between the brand owner and the sponsored link.

On the question of initial interest confusion, the Court holds that the duration of infringement (whether brief or sustained) is not a relevant factor under the Trademarks Act and confusion, albeit occurring only at the initial stages of the purchasing process, is actionable. However, the Court cautions that it is important to not conflate the mere generation of interest with the doctrine of initial interest confusion and that there must be a “real likelihood of confusion”. In the Court’s words, “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.

The Court also examines the legitimacy of this practice under Section 29(4) and holds that the use of trademarks, absent anything more, does not amount to infringement of the trademark simply for the reason that the same is used to display advertisements. As per the Court, not every advantage is actionable under Section 29(4), and the advantage must also be unfair. Keywords are a means to identify customers who may be looking for a particular product and the Court categorically holds that “identifying customers, who may be looking for goods or services of a particular brand, for offering them alternatives is not unfair”.

The Court notices that apart from the primary function of acting as a source identifier, trademarks today perform an extended function of use in communication. However, such extended functions cannot impinge on the rights of others and Google, being the owner of the virtual space, has a right to display ads.

In the author’s view, the impact of this judgment will be that a brand owner cannot seek a per se injunction against the use of its trademark as a keyword. The analysis will have to be based on the content of the advertisement – if the advertisement is confusing or causes blurring or tarnishment, only then the advertisement will need to be actioned by Google and not otherwise.

The Court also holds that in a given case, if Google has actively participated in the infringement and fails to block the offending Ad upon receipt of information about the same, an action for contributory infringement may lie. In the author’s understanding, the issue of contributory infringement may arise only if the Ad is confusing, or causes blurring or tarnishment and Google fails to block the Ad despite receipt of information from the brand owner. Similarly, while the Court holds that Google cannot claim immunity from liability under Section 79(1) of the IT Act based on its role in the Ads program, this issue of liability will only arise if infringement is established. As the Court has categorically held that the use of trademarks as keywords is not per se infringement, in the author’s view, trademark owners cannot seek to place liability on Google merely for displaying ads of competitors, absent anything more.

Google already has policies in place addressing complaints of confusing and deceptive ads and these enable brand owners to report confusing Ads. Since these policies already exist, most of the cases that have been brought to Court are cases which claim that the use of keywords per se infringes their trademarks. The Division Bench’s judgment sheds light on this important question and holds that there is no per se infringement by the use of trademarks as keywords.

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