The Alliance of Digital India Foundation (ADIF) on Saturday hailed Delhi High Court’s decision on Google infringing upon trademark rights, terming it “a significant blow to Google”.

The court issued a directive on Friday, compelling the tech giant to take decisive action against advertisements that infringe upon trademark rights.

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“This development is set against the backdrop of a trademark infringement case filed by DRS Logistics, where the company raised concerns about competitors using its trademark ‘Agarwal Movers and Packers’ as keywords in Google searches. This practice allegedly led to the prominent display of competitors’ websites in search results for the trademark,” said the ADIF.

Before 2004, Google’s trademark usage policy restricted trademarks from being used within a sponsored ad’s text. Google’s policy also restricted using keywords that were protected under a trademark if the owner of that trademark requested it.

“However, Google reduced the restrictions under the policy, which allowed Google to push trademarks as keywords, even if the trademark owner objected. Doing so though risked litigation against Google, Google moved forward as it generates higher revenue coming in as a result of the change in policy,” said the alliance which has some of the top homegrown startups as its members.

The court observed that Google’s assertion of being a mere intermediary lacked credibility.

“The court pointed out that Google not only benefited significantly from keyword sales but also actively suggested keywords to advertisers, including competitors’ trademarks. Google’s Keyword Planner Tool was cited as evidence of this practice, enabling businesses to gain insights into their rivals’ trademark usage,” according to the ADIF.

The court further noted that there appeared to be a prima facie encouragement from Google for advertisers to exploit keywords associated with trademarks to target their ads.

“This stance raised doubts about Google’s entitlement to intermediary exemptions. Ultimately, the division bench upheld the previous single-judge ruling, directing Google to undertake investigations and remove any ads found to infringe upon another entity’s trademark rights,” according to the ADIF.

It further stated that this ruling coincides with previous regulatory actions, including the Competition Commission of India’s (CCI) decision in the Google Lagaan case and the scrutiny of Android bundling.

Meanwhile, Google on Saturday said it is pleased with the Delhi HC verdict which held that the company’s ads trademark policy is in compliance with the Indian Trademarks Act (TM Act) and does not amount to infringement of trademarks, unless the resulting ad upon review is held to mislead users as to the source of origin of the ad.

In a statement, the company said that specifically on its ads trademarks policy, “we have a clear and stated policy that does not allow advertisers to use trademarked terms in the ad-text of an ad, except in certain pro-consumer and legal scenarios, such as resellers and informational sites”.

“As a company, we comply with all local laws,” it added.