Use of Trademarks as Keywords in Bidding Programs Constitutes Infringement and Unfair Advantage Under Section 29(8)

The Plaintiff, a dominant player in the Indian sanitaryware industry and proprietor of the registered and "well-known" mark "HINDWARE", filed suits for permanent injunction.

The grievance arose when the Plaintiff discovered that competitors (Grohe and Cera) had purchased "HINDWARE" as a keyword in Google’s "AdWords" program.

Consequently, when users searched for the Plaintiff’s mark, the competitors' websites appeared as top "sponsored links" on Google’s Search Engine Results Page (SERP).

While the advertisers (Grohe, Cera, and Omkara) settled with the Plaintiff, the suits proceeded against Google LLC and Google India ("Google").

The Plaintiff alleged that Google’s practice of auctioning a registered trademark to rivals constitutes infringement.

Google contended it is a neutral "intermediary" and that invisible keywords do not constitute "use" under trademark law.

Section 2(2)(c) of the Trade Marks Act, 1999, which defines "use" of a mark to include any "relation whatsoever" to goods.

Section 29(6)(d) of the Trade Marks Act, 1999, which includes use "in advertising".

Section 29(8) of the Trade Marks Act, 1999, which defines infringement in advertising that takes "unfair advantage" of a mark or is contrary to "honest practices".

The Division Bench precedent in Google LLC v. DRS Logistics (P) Ltd., which established that keywords are analogous to meta-tags and constitute "use".

Section 79 of the Information Technology Act, 2000, regarding "safe harbour" protection for intermediaries.

The Court reasoned that "advertising" under Section 29(6)(d) is a verb encompassing the entire promotional process, not just the visible result; thus, triggering an ad via a keyword is "use".

The Court found Google to be an active participant rather than a passive link-provider because Google’s Keyword Planner Tool prompts advertisers to use trademarks, and Google monetizes this through a "Cost-Per-Click" auction model.

The Court determined that auctioning a coined mark like "HINDWARE" allows rivals to "free-ride" on the Plaintiff’s investment and reputation, which constitutes "unfair advantage" and violates "honest commercial practices" under Section 29(8).

The Court rejected the "brick-and-mortar" analogies (like shelf placement), noting that a trademark-specific search is akin to a user seeking an exclusive store, which Google then diverts to a rival.

The Court held Section 79 of the IT Act inapplicable because Google’s algorithms select the specific "receiver" of the infringing transmission (the user searching the mark) and Google failed the "due diligence" test by allowing trademarked terms in its auction policy.

The Court granted a permanent injunction restraining Google from using "HINDWARE" or its variations as keywords for the Plaintiff’s competitors.

Google was ordered to pay nominal damages of ₹15 Lakhs in each suit (totaling ₹30 Lakhs) as "minimal compensation" for the infringement and actual costs of litigation.

The suit against Omkara Infoweb was decreed per the Settlement Agreement.