The Delhi high court on Thursday ruled that Google’s use of trademarks as keywords under its Ads Programme may lead to infringement, making it ineligible for safe harbour status.
This means that Google will be legally bound if advertisers use another company’s trademark to improve their search ranking and that affects the trademark owner or confuses consumers. Besides, the ruling could affect Google’s advertising revenue, experts said.
Being an intermediary, the tech giant enjoys legal immunity under Section 79 of the IT Act from actions of third-party companies on its platforms. However, the court said Google is the provider of the keywords and an active participant in the use of trademarks. Besides, it also selects the recipients of the information that were infringing links, and hence the safe harbour status will not be applicable, the court said.
The court was pronouncing its judgment in the Google LLC vs DRS Logistics case, in which the latter said its trademark ‘Agarwal Packers and Movers’ has been used by Google in its keywords. It is now being used by competitors to generate traffic on their websites, the logistics company argued.
Simply put, Google runs an advertisement service (Ads Programme), under which sponsored links of advertisers are displayed along with the results of search queries. Under this, Google suggests keywords to its advertisers which can help them be featured higher on the search results page.
DRS argued that Google lets its advertisers pay a higher amount and display their advertisements by using the logistics company trademark in the keywords. “Such activities of Google constitute infringement of its registered trademarks,” DRS said.
The court was hearing two appeals filed by Google LLC and Google India. The tech giant had challenged a single judge’s order in 2021, which had ordered that the use of trademarks as keywords in the Ads Programme amounts to ‘use’ under the Trade Mark Act and thus, may constitute infringement.
Google India said that it neither operates nor controls the search engine. “Google India does not operate the Ads Programme and therefore, is incapable of complying with the directions in the impugned judgement,” said Arun Kathpalia, senior counsel appearing for Google.
“The use of the trademark as a keyword is not per se infringement of a trademark and courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan, and China have accepted the said position,” Kathpalia added.
According to Kathpalia, Google plays a content-neutral role as the advertisements and the keywords used to trigger eligible advertisements on the Ads Programme comprise of third-party data. The Ads Programme merely provides an advertising platform and interface for creating and placing advertisements on the search engine. “Therefore, Google is an intermediary in relation to the Ads Programme and is entitled to safe harbour,” Kathpalia said.
Appearing for DRS Logistics, Chander M Lall said keywords and metatags provided by Google perform similar functions and such tags can be used to divert traffic from the trademark proprietor’s website to the advertiser/ infringer’s website.
The court did not accept Google’s argument that it had no control over the Ads Programme.
“There is a strong link between Google and Google India. Google India is an Indian subsidiary of Google. Google India also claims to be a reseller for the Ads Programme. Thus, prima facie, it is difficult to accept that Google India has no responsibility in ensuring compliance with the directions issued under the impugned judgment,” the court said.
According to experts, the court’s ruling could potentially impact Google’s advertising revenue.
“If Google is found to have actively participated in enabling third-party advertisers to benefit from the goodwill of trademark owners without availing safe harbour protection, it might lead to legal repercussions. This could result in changes to Google’s advertising practices and policies, potentially affecting its relationships with advertisers and the revenue generated from its advertising services,” said Siddharth Suresh, partner at DSK Legal.
According to Suresh, if the ruling sets a precedent for similar cases, it could have wider implications for how digital platforms are held accountable for the content and actions of third-party advertisers.