The Delhi High Court on Friday issued notice on Google’s appeal challenging a single judge’s judgment that restrained the company from allowing advertisers to use the registered trademark “HINDWARE” as a keyword trigger under its Google Ads programme and directed Google LLC and Google India to jointly pay nominal damages of Rs 30 lakh for trademark infringement.
The Division Bench of Justice V Kameswar Rao and Justice Manmeet Pritam Singh Arora issued notice on the appeal, directed the parties to file their written submissions along with the judgments they intend to rely upon within one week, and listed the matter for final hearing on July 24.
The Court also directed that Google’s appeal be treated as the lead matter in a batch of connected cases involving similar questions relating to trademark protection and keyword advertising.
The appeal arises from a trademark infringement suit instituted by Hindware Limited. In the impugned judgment delivered on May 22, the single judge held that Google’s practice of permitting advertisers to bid on the registered trademark “HINDWARE” as a backend advertising keyword, even though the mark was not visible in the sponsored advertisement itself, amounted to trademark infringement. The Court permanently restrained Google from using the trademark and its variants as advertising keywords and held that the company could not escape liability by merely characterising itself as a passive intermediary.
Assailing the judgment, Senior Advocate Abhishek Manu Singhvi, appearing for Google, submitted that the appeal raises a substantial question of trademark law concerning digital advertising and search engine operations. He argued that the impugned decision is inconsistent with two earlier Division Bench judgments of the Delhi High Court, which have subsequently been followed in several cases dealing with keyword advertising and trademark use.
Singhvi contended that the mere use of a competitor’s registered trademark as an invisible keyword or search trigger, without displaying the mark in the advertisement and in the absence of any finding of actual consumer confusion or deception, cannot constitute infringement per se. He further submitted that the single judge had not recorded any finding regarding likelihood of confusion, consumer deception, unfair trade practice or restrictive trade practice, and had imposed liability solely because Google’s advertising platform used the trademark as a keyword trigger.
Explaining the functioning of Google’s advertising ecosystem, Singhvi submitted that search engines generate revenue through sponsored advertisements, which are distinctly labelled and identifiable to users. He argued that keyword bidding is a globally accepted advertising practice that promotes competition and consumer choice by enabling users to compare competing products and services. According to Google, permitting advertisers to bid on keywords irrespective of their trademark status is consistent with established principles of trademark law and also benefits smaller businesses by allowing them to reach potential consumers.
A substantial part of the hearing centred on the Delhi High Court’s earlier decision in the *DRS Logistics* case. Google argued that although the single judge relied upon that judgment for several legal principles, the impugned ruling departed from the ratio laid down by the Division Bench on balancing proprietary trademark rights with the legitimate operation of keyword advertising systems.
The Division Bench also considered the award of Rs 30 lakh in nominal damages against Google. During the hearing, the Court enquired whether execution proceedings in respect of the damages decree were being pursued independently. Appearing for Hindware, Senior Advocate Manohar Gupta submitted that the monetary decree was capable of execution irrespective of the outcome of the present appeal concerning the injunction against keyword advertising. However, both parties agreed that the issue could be deferred for consideration at the next hearing.
The impugned judgment had held that Google played an active commercial role in the alleged infringement by suggesting trademarked terms through its Keyword Planner Tool, conducting keyword auctions, entering into advertising arrangements with advertisers and earning revenue whenever users clicked on sponsored links generated through those keywords. On that basis, the single judge concluded that Google was not entitled to claim intermediary protection for its role in the Google Ads programme, observing that the company could not provide a technological tool facilitating infringement and subsequently disclaim legal responsibility for its consequences.
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