Google's Invisible Keywords Spell Visible Trouble, Court Limits Safe-Harbour Defence

A trademark suit between sanitaryware brand Hindware and Google might just shape how we view intellectual property, keyword advertising and intermediary liability. 

The case: Hindware noticed as way back as 2013 that a rival was buying the keyword ‘Hindware’ through the then Google Adwords programme. A year later, another rival had also bought the keyword. Hence, users searching for Hindware and related terms on Google were instead served sponsored content and advertisement links of competing brands that had deployed Hindware’s trademark as a keyword to trigger their visibility.

Under keyword advertising on Google, keywords are bid for, and often remain invisible to users.

The rivals later settled with Hindware, but the latter took Google to court. The case raised questions about the future of keyword advertising using trademarks and Google ads in India. More pertinently, this case goes beyond just trademarks and lays down an interesting foundation for law around intermediary liability under India’s information technology rules. In May this year, the Delhi High Court held Google liable for trademark infringement for selling and allowing use of Hindware’s trademark as a keyword to its competing brands for advertising.

At the heart of the issue was whether use of a trademarked word as an invisible keyword can amount to trademark infringement. The court answered this question in the affirmative on the facts of this specific case.

The court said that merely because a trademark is not visible to users does not mean its use cannot constitute trademark infringement. Further, Google allowing other brands to bid on Hindware’s trademark and financially gain from it as a keyword is a commercial exercise, and effectively taking unfair advantage of Hindware’s interests.

Google’s key defence in the case was its intermediary safe-harbour. The court said that by allowing keyword bidding on trademark and earning revenue from the process, Google could not claim to be a passive intermediary. It was, instead, an active participant that allowed for the infringement and would not be entitled to safe-harbour protection under the Information Technology Rules.

The court awarded damages of 3 million rupees against Google entities and while the monetary impact is not too significant for the company, the legal impact could be wider. If upheld on appeal, the judgment may influence how intermediary liability is assessed in future disputes relating to online platforms that host content.

The court, in refusing to allow Google from shrugging its responsibility in a commercial model where it actively benefits from the infringement, made it clear that intermediary protection cannot be used as a shield where a platform is found to have actively facilitated infringement of another's rights.

This is not the first time a big-tech company has had a run-in with the Indian law over intermediary safe-harbour status under the Information Technology Rules. In the evolving jurisprudence around safe-harbour rules and intermediary liability, Elon Musk’s X, formerly Twitter, has had its fair share of confrontations with the Indian government and courts, be it over compliance with IT Rules, the validity of Sahyog portals, or the government’s take-down orders. Whether the take-down orders or the Sahyog portal should legally stand is a question for another discussion, but the recurring theme across all these judicial disputes is the court's expectation from the technology companies that they abide by the law of the land while they operate here.

More recently, the Supreme Court orally remarked during proceedings involving Meta and WhatsApp that if the companies were unwilling to comply with Indian privacy standards, they were free to leave the country. The top court’s observation came during a case concerning WhatsApp’s data sharing policy. While the case is still pending, the court’s remarks indicates the importance it attaches to rights of the users and the need for the American company to abide by the law of the land.

Indian courts have repeatedly emphasised that intermediary protection is conditional rather than absolute. Courts have scrutinised the conduct of digital platforms looking to avail safe-harbour protection, be it on issues of statutory and regulatory compliance, user rights or, as in this case, trademark infringement.