Court refuses to grant interim injunction in AdWords dispute

In Consim Info Pvt Ltd v Google India (September 10 2012), the Madras High Court has dismissed an appeal by Consim Info Pvt Ltd against a decision of the trial court in which the latter had refused to grant Consim an interim injunction in a case involving Google AdWords.

The use of trademarks as AdWords was challenged for the first time in India in 2009. Consim, which offers online matrimonial services, sued:

• three of its competitors for trademark infringement; and
• Google India and its parent Google Inc for contributory infringement for using its registered trademarks as AdWords, in sponsored links and in its keyword suggestion tool.

All of Consim’s trademarks consist of a combination of two words: a generic term relating to the region, language, sect or religion of a prospective suitor or bride, and the word 'matrimony' (eg, BHARATMATRIMONY and TAMILMATRIMONY).

The trial court vacated the injunction that had originally been granted. It clarified, among other things, that Consim was not entitled to an injunction as:

• its trademarks were highly descriptive in nature; and
• its competitors would be severely constrained if they were prevented from using descriptive terms in the course of trade.

Predictably, Consim challenged this order before the appeal court. 

On appeal, the respondents alleged for the first time that Consim was guilty of hiding the material fact that it participated in Google’s AdWords programme; the respondents further alleged that Yahoo, a strategic investor in Consim, also used AdWords. In addition, the respondents raised several statutory defences, such as the descriptiveness of Consim's marks and honest commercial practices.

The Madras High Court dismissed Consim's appeal, despite disagreeing with many findings of the trial court. It observed that:

• granting an injunction would not reduce the choice of keywords available to competitors (the respondents never alleged that alternative keywords were not available);
• the balance of convenience favoured Consim; and
• as such, Consim was entitled to an injunction.

However, surprisingly, the court declined to grant an injunction or interfere with the "existing arrangement" between Consim, its competitors and Google. Instead, it directed that the trial court dispose of the matter by late 2013. The critical aspect of this "existing arrangement" between the parties was Google's commitment before the trial court that it would protect trademark rights and extend the benefits of its AdWord and AdSense programmes to Consim.

The High Court also observed that several issues were to be determined only at the time of trial, including:

• the extent to which Google’s discrimination would affect Consim;
• whether Consim’s registered marks had acquired distinctiveness before the commencement of the legal proceeding; and
• whether irreparable hardship was caused to Consim.

Both the trial and appeal courts observed that Google was silent on why it used different AdWords policies in different jurisdictions.

The order from the High Court is likely to be contested before the Supreme Court - either by Consim because it was not granted the injunction it sought, or by one of the respondents due to the many adverse findings made by the appeal court. In parallel, Consim has filed an independent complaint before the Competition Commission of India for abuse of dominant position, which is pending.

The interplay of keywords, advertisements, trademarks and technology appears to be the new weaponry on the Indian IP warfront.

M S Bharath and Gowri Tirumurti, Anand and Anand, Chennai