Delhi High Court sheds light on when SEO keyword use becomes infringement

The Delhi High Court has refused to restrain third-party use of Policybazaar Insurance Web Aggregators trademarks as keywords. In a suit filed by Policybazaar for infringement and passing off, the court re-emphasised that the use of a competitor’s trademarks as keywords to trigger advertisements in response to search engine queries is not infringing in the absence of confusion, unfair advantage or dilution of the trademarks involved (Policybazaar Insurance Web Aggregator v Acko General Insurance Limited and Policybazaar Insurance Web Aggregator v Coverfox Insurance Broking Pvt Ltd CS (COMM) 259/2019 and CS (COMM) 260/2019, 2023).

Case details

In 2019 Policybazaar filed two separate suits alleging trademark infringement and passing off against Acko General Insurance Limited, a renowned digital insurance company, and Coverfox Insurance Broking Pvt Ltd, an insurance aggregator. The suits were filed because Acko and Coverfox were using the Policybazaar trademarks as keywords through the Google Ads programme. In doing so, they triggered their own advertisements when a consumer entered the word ‘Policybazaar’ during a Google search. Policybazaar alleged that such use was leading to customer confusion, dilution and diversion of internet traffic to Acko’s and Coverfox’s websites, giving them an unfair advantage. Further, Policybazaar was then required to pay an increased cost per click on the Google Ad programme for prominent display of its own website in the search results. Google India Private Limited and Google LLC (collectively, Google) were also arraigned as defendants in both suits, given that they offer the Google Ads programme as an advertising service.

The defence argued that Policybazaar had concealed that it was using the Google Ads programme to bid on Acko and Coverfox’s trademarks as keywords, disentitling it to any discretionary relief. Further, Acko and Coverfox argued that the use of a trademark as a keyword to trigger sponsored ad results does not amount to use because the trademarks do not identify the source of the mark. Thus, keyword use is not infringement. The defence also asserted that mere diversion of consumers to their website is not actionable in the absence of any confusion or likelihood of confusion. Consumers that use the Internet are presumed to be computer literate and therefore unlikely to be confused about the source of an advert that is marked as sponsored.

Initially, Policybazaar was able to secure an *ex-parte* order of interim injunction against Acko and Coverfox in 2019, restraining them both from using the Policybazaar trademarks as keywords. However, the order was subsequently suspended on applications moved by Acko and Coverfox, arguing that Policybazaar had concealed an important material fact. Prior to filing the two suits in question, Policybazaar had itself been bidding on the trademarks of Acko and Coverfox as keywords. While suspending the order of injunction, the court had also imposed costs on Policybazaar.

Court decisions

After hearing detailed arguments, the court dismissed Policybazaar’s applications seeking injunctive relief against Acko and Coverfox. The single judge was aligned with the August 2023 order passed by the Delhi High Court in Google LLC v DRS Logistics. This held that third-party use of trademarks as keywords to trigger display of advertisements (through the Google Ads programme) constitutes ‘use of a mark in advertising’ under the trademarks statute. However, as the keyword does not perform any perceptible, source identifying function at the backend, its use does not inherently infringe unless the ad leads to confusion, unfair advantage, dilution or compromise of the trademark in question. The judge maintained that it is not illegal to seek out the attention of internet users through targeted advertising, even if it includes third-party marks as key words. Further, testing a consumer of average intelligence and imperfect recollection to determine likelihood of confusion would not be applicable here: the test is to be viewed from the perspective of a person who is aware of how search engines function. Such an individual would not expect search results to offer a clear answer. Rather, they would be aware of the nuances of sponsored adverts and would expect alternative choices to come up as well.

Thus, the defendants’ ads as they appeared in the search engine results were not deceptive or confusing. The links to the websites of Acko and Coverfox were under the names of the two entities and clearly marked as ads. Further, even if the use of such keywords by the defendants had added to the cost of advertisement for Policybazaar, it was not sufficient to lead to a finding of infringement or passing off. Additionally, what prevailed was that Policybazaar had itself used the Google Ads programme to bid for Acko’s and Coverfox’s trademarks as keywords but had concealed this material information.

Looking ahead

Insofar as observations by Google were concerned, the court reiterated that if an ad is found to be infringing, Google, being an active participant in the programme, cannot claim the safe harbour protection available to intermediaries under Section 79 of the Information Technology Act 2000.

Policybazaar has appealed this order and its appeals are listed for arguments before a division bench of the Delhi High Court on 21 November 2023.

This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight

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