Blitz Bureau
NEW DELHI: The Delhi High Court has ruled that Google’s practice of auctioning trademarked brand names as advertising keywords in Google Ads constitutes a clear trademark infringement and has permanently restrained the tech giant from using Hindware or its variations as keywords in its Google Ads programme, according to a report in The Print.
It all started in 2013 when sanitaryware maker Hindware discovered that a competing brand, Cera Sanitaryware, and its website developer, Omkara Infoweb, were purchasing the trademark Hindware as a keyword through the Google AdWords programme.
In October 2014, Hindware found that plumbing fixtures manufacturer Grohe had also bought the trademark as a keyword.
As a result, when customers and consumers searched for Hindware, Cera and Grohe appeared as the top results, which, according to Hindware, constituted “unfair competition and trademark dilution” that diverted its potential customers.
While Grohe and Cera eventually settled with Hindware, legal proceedings continued against Google to determine the search engine’s liability: specifically, whether using a trademarked name as an invisible keyword trigger qualified as “use in advertising” under the Trade Marks Act and whether such practices created unauthorised brand confusion.
The Delhi High Court’s Justice Mini Pushkarna noted last week that: “…it is not necessary that the registered trademark physically appears in an advertisement for the same to be used ‘in advertising’.”
She said the use of a trademark as a keyword to trigger the display of an advertisement for goods or services amounted to using the mark “in advertising”.
Additionally, she ordered Google to pay Rs 30 lakh in damages to Hindware.
At the heart of the ruling is Section 29(6)(d) of the Trade Marks Act of 1999, which states that a person is considered to be using a registered mark if they apply it to business papers or advertising without the permission of the registered proprietor.
Use of a trademark as a keyword to trigger the display of an advertisement for goods or services amounted to using the mark ‘in advertising’, Delhi HC ruled.
This provision thereby defines the unauthorised use of a registered trademark by including advertising in print media, digital ads, sponsored search keywords, social media campaigns, and broadcasting as trademark infringement.
In the 163-page judgement, Justice Pushkarna found that Google and its subsidiaries have actively infringed upon the registered and well-known mark Hindware by allowing competitors to bid on the term to divert internet traffic.
But, how did the court determine that Google is infringing on the trademark?
First off, the court found that Google’s “AdWords” (now Google Ads) programme allows competitors to take unfair advantage of a brand’s reputation.
Since Hindware is a coined mark with no dictionary meaning, any user searching for it is specifically looking for Hindware’s products.
The court said that by listing Hindware as a biddable keyword, Google was essentially selling the “commercial pulling power” of a brand it did not own.
Moreover, the court added that Google earned revenue through its pay-per-click model because consumers searching for Hindware were diverted to a competitor’s site (like Grohe or Cera) and clicked on the sponsored link. Google, it said, thereby profited from Hindware’s established goodwill which amounted to a trademark infringement.
Google argued that because its keywords were backend triggers and invisible to consumers, they do not constitute “use” of a trademark under the law.
However, the court rejected this argument, saying that under Section 29(6) of the Trade Marks Act, using a mark “in advertising” is very much an infringement.
It said that “advertising” is a broad process and invisible keywords were the mechanism driving promotional activity. Comparing Google’s keywords to “meta-tags”, the court noted that using them to divert traffic from a proprietor’s website to an infringer’s website is illegal, even if the end user cannot see the code.
The court held that Google’s conduct is contrary to “honest practices” in commercial matters as it actively encourages competitors to bid on their rivals’ brand names through its Keyword Planner Tool, which suggests popular search terms to advertisers.
The Google Ads system requires a trademark owner to bid on its own name to ensure that its official website appears above the competitors. This effectively allows Google to “seize and sell” property it has no legal right to exploit.
Google tried to use “safe harbour” protection under Section 79 of the IT Act, arguing it was a neutral intermediary.
However, the court disagreed, ruling that Google is not a “passive” host but an active participant that determines the recipients of the infringing links and, in the end, monetises the data. It said that by having a policy in India that explicitly refuses to investigate the use of trademarks as keywords, Google failed to observe “due diligence”