Appy Pie Llp vs Engineer.Ai India Pvt. Ltd. & Ors on 20 July, 2022

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Delhi High Court - Orders

Appy Pie Llp vs Engineer.Ai India Pvt. Ltd. & Ors on 20 July, 2022

1. On the previous date being 13th July, 2022, the Plaintiff was permitted to implead Google LLC as a party, as the Defendants were using the Google Ads platform for their activities. Further to the previous order dated 13th July, 2022, an amended memo of parties has been filed by the Plaintiff impleading Google India Pvt. Ltd. as Defendant No.5.

2. The said amended memo would have to be changed considering the submissions made by Mr. Sethi, ld. Sr. Counsel today, that he is appearing Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 1 of 10 Signing Date:22.07.2022 10:54:08 for Google LLC, which is the entity claimed to be responsible for the Google Ads Program. Accordingly, instead of Defendant No.5-Google India Pvt. Ltd., Google LLC is impleaded as Defendant No.5. Let the fresh amended memo be filed within two weeks.

3. On behalf of Defendant Nos. 1 to 4, Ms. Nagpal, ld. Counsel, accepts summons.

I.A. 10589/2022(for stay)

4. The present suit seeking permanent injunction, restraining infringement of trademark, as also reliefs for passing off, disparagement, dilution of goodwill, unfair competition and damages, etc. has been filed by the Plaintiff- Appy Pie LLP which is a Delhi/Noida based company, in respect of its mark 'APPY PIE'. The case of the Plaintiff is that it is a software technology-oriented business, providing an online platform to businesses and professionals for creating their own mobile applications. The said platform of the Plaintiff eliminates the hassle of coding for developing an application or for website hosting. In addition, the Plaintiff also offers other services and solutions for various freelancers, professionals, students, business owners, etc., including an application for a content management system called as (CMS). The said CMS can be availed of by any group of businesses or individuals in order to customise their own application or host their own website on various mobile operating systems. The Plaintiff is stated to have over 10 million clients and over 100 million codes. It has also invested around Rs. 1-2 crores per annum in advertising and publicity expenses since 2018 till today.

5. The services and products of the Plaintiff are promoted through the Plaintiff's website www.appypie.com. The mark 'APPY PIE' was coined Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 2 of 10 Signing Date:22.07.2022 10:54:08 by the Plaintiff in 2012. The same is also registered in India in Class 42. The said application dates back to 19th June, 2014 and relates to the following services: Design and development of computer software, computer software design; computer software consultancy; rental of computer software; software as a service [SAAS]; updating of computer software. The trademark 'APPY PIE' is claimed to be registered in various foreign countries as well, including the USA, since 2015.

6. The grievance in the present case is that the Plaintiff came to know that the Defendants who promote a competing service on their website www.builder.ai have booked 'APPY PIE' on the Google Ads Program and were using the same intermittently since September, 2020. Thus, whenever any user conducts a Google Search for 'APPY PIE', the Defendants' website was being reflected as a sponsored search result on top of the page. It is submitted that apart from the www.builder.ai website being reflected as one of the first listings, the Defendants also started using a listing which used the trademark 'APPY' in the following manner:

Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 3 of 10 Signing Date:22.07.2022 10:54:08

7. This was also disparaging the Plaintiff. The grievance of the Plaintiff is, therefore, that the misuse of the mark 'APPY PIE' both on the Google Ads Program, in the context of the advertisement, as also in the sponsored search results on Google Search, would be violative of the Plaintiff's rights. The Plaintiff therefore, seeks an injunction in respect of both kinds of usage in the present suit, on the strength of the order passed in MakeMyTrip India Pvt. Ltd. v. Booking.com B.V. & Ors. [CS (COMM) 268/2022, decided on 27th April, 2022].

8. On behalf of Defendant Nos. 1 to 4-Mr. Saurabh Kripal, ld. Sr. Counsel, submits that since the filing of the suit, the Defendants have actually deactivated their entries on the Google Ads Program and the said two advertisements are no longer visible on Google Search. He however submits, that the Plaintiff and the Defendants have businesses internationally and the legal position in other countries being different, the order, if any, passed by this Court restraining Defendant Nos. 1 to 4 from using 'APPY PIE' on the Google Ads Program ought to be restricted to India. He further submits that the deactivation of the impugned entries has been done only in the territory of India and Defendant Nos. 1 to 4 are, in fact, in the process of filing litigations against the Plaintiff in USA. Mr. Chitale, ld. Sr. Counsel appearing for the Plaintiff, submits that he is not aware of any litigation having been filed by Defendant Nos. 1 to 4 against his client.

9. On behalf of Defendant No.5/Google (hereinafter "Google"), Mr. Sandeep Sethi, ld. Sr. Counsel, submits that the advertisement which contained the mark 'APPY' in the title text is contrary to Google's trademark policy and thus, Google itself has deactivated the said listing. Insofar as the other advertisement of www.builder.ai as the sponsored Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 4 of 10 Signing Date:22.07.2022 10:54:08 Google search result is concerned, since the Defendants have already stopped availing of the Google Ads Program after service in the suit, the said advertisement is no longer appearing.

10. Heard. This Court has in MakeMyTrip India Pvt. Ltd. (supra) considered the legal position on whether use of a trademark as an Adword on the Google Ads Program would be violative of the rights of a plaintiff in the registered trademark or not. The findings of the Court on this are as under:

"26. It is in this background that the Court has to analyse as to whether the encashment of the goodwill and reputation of a registered trade mark by third parties by bidding on it as a keyword through the Google Ads Program would amount to infringement and passing off or not?

27. Defendant Nos.3 and 4 operate the popular search engine www.google.com and its various country variants, the function of which is to enable an internet user to search for webpages on the internet by using keywords. There are two types of search results that are displayed when a user types any keywords in the search bar -

 Paid search results i.e., Advertisements  Organic search results

28. Google Ads Program is an online advertising service offered by Google for businesses which allows anyone to adopt and use keywords through Google that matches the terms or phrases that internet users are most likely to search for. The advertisements of the bidders which may be rated on various factors, for a keyword, are shown in the advertisement section, which is above the organic search results. Through this program, any business entity or person can book or bid for a keyword which may include a trade mark - say of a competitor. If the said advertisement is rated highly Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 5 of 10 Signing Date:22.07.2022 10:54:08 by Google, the said competitor's advertisement may be listed in the advertisement section, when a user types the proprietor's trade mark in the search bar. This forces the trade mark owner to also start participating and bidding in the Google Ad Program.

29. Therefore, by using a registered trade mark as a keyword, Google Ads Program seeks to create a platform for two competitors to bid against each other for the marks belonging to each other for better visibility of their goods and services on the search engine. Therefore, in effect, what a trademark proprietor is being forced to do is to bid for its own trademark, in order for the advertisements of its goods and services under the said trademark to be reflected in the advertisement section of the search results and not be hijacked by a competitor. This entails the trademark owner to make investments in the Google Ads Program on a daily basis, failing which its competitors could use the trademark for advertising their own goods and services and have listings higher on the Google search results.

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31. This Court is of the opinion that the use of the mark 'MakeMyTrip' as a keyword through Google Ads Program by one of its major competitors, Booking.com is infringing use under Sections 2(2)(b), 29(4)(c), 29(6)(d), 29(7) and 29(8)(a) of the Act. ........ xxx

33. Further, there is no doubt in the mind of the Court that use of the Plaintiff's mark by Defendant No.1 as a keyword on the Google Ads Program is use for the purpose of 'advertising'. Google is encashing the goodwill of the trade mark owner by allowing the competitor to book the said mark as a keyword. No argument has been advanced by the Defendants that the use of a registered trade mark as a keyword through Google Ads Program does not amount to advertising. Any contrary view would be devoid of any Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 6 of 10 Signing Date:22.07.2022 10:54:08 merit and would be against the very purpose of Google Ads Program. Thus, the said use would also be infringing use in view of Section 29(6)(d) of the Act, which squarely covers use of a registered trade mark in advertising. .......

34. Defendant No.1 is using the mark of the Plaintiff, even though the same is not visible, for the purpose of advertising in an attempt to divert business from the Plaintiff's website to its own website. The same is done by encashing on the goodwill of Plaintiff's mark 'MakeMyTrip'. In the prima facie opinion of the Court, this practice amounts to taking unfair advantage of the Plaintiff's mark and also falls foul of section 29(8) of the Act ....

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43. As far as the question of passing off is concerned, the essence of passing of is a misrepresentation made by the Defendant which is calculated to cause damage to the business or goodwill of the claimant. The traditional concept of 'misrepresentation' and 'passing off' consists of the Defendant adopting for his own goods or business some material such as a name or a mark which is deceptively similar to the claimant's mark. In the opinion of this Court, restricting an action of passing off to such an 'adoption' might be obsolete in view of the technological advances in today's digital world. The concept of `deceit' which forms the fulcrum of an action for passing off is clearly present in cases such as this one.

44. The impact of Google Ads Program can be best described by way of an illustration: If a person is looking to buy an air ticket and types `MakeMyTrip' in the search bar, and the first result in the Ad section is of Booking.com, the user may simply visit the latter's website by clicking on the link and book the ticket. In effect therefore, the user has been directed to a Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 7 of 10 Signing Date:22.07.2022 10:54:08 competing website and a direct business loss has been caused to the trade mark owner's business.

45. In the present case, the question that is pertinent is whether use of a registered trade mark as a keyword through Google Ads Program can amount to misrepresentation as a matter of principle. Going by the traditional wisdom, such use of a mark as a keyword by the Defendant might not constitute passing off as there is no visible use of the mark by the Defendant. However, in Kerly's Law of Trade Marks and Trade Names (15th Ed., p.628 & 629) it is stated that third party bidding on trademarks as sponsored keywords for use by internet search engines can constitute misrepresentation. The same is extracted as under:

"18-126 With the increase in importance of Internet trading and promotion, the use of third party trade marks in metatags (the unseen text on Internet web pages scanned be search engines) and other mechanisms (such as sponsored keywords) to achieve the aim of having a party's webpage offered by search engines in response to a search for the third party side is viewed by trade mark proprietors with increasing concern. The present attitude of the Court of Appeal as to whether such "invisible" use of trade mark can amount to passing off is sceptical. It is submitted that such invisible use might very well amount to misrepresentation in some circumstances, but the absent other factors, it is perhaps unlikely that any such misrepresentation would lead to deception on the part of the public. In this regard, since bidding on sponsored keywords for use by Internet search engines has been held to constitute use in the course of trade for the purposes trade mark infringement by the Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 8 of 10 Signing Date:22.07.2022 10:54:08 party placing the advertisement it is difficult to see how such the placing of an advertisement using a mark in which a third party owns goodwill can prima facie be excluded from constituting a misrepresentation as a matter of principle. However, if nobody is misled or likely to be misled, there can be no passing off. As ever, the outcome of each case will be dependent of the particular facts."

46. Thus, the "invisible" use of a mark as a keyword can constitute passing off as a matter of principle. This, however, would not mean that the Plaintiff cannot be permitted to book its own trade mark as a keyword. The Plaintiff itself can surely use its trademark as a keyword on the Google Ads Program if it wishes to promote itself on the search engine."

11. It is clear from the submissions made, that Defendant Nos. 1 to 4 are no longer using the marks 'APPY PIE' or 'APPY' either in the title text or in the Google Ads Program and have deactivated the impugned links. It is directed that this status quo shall be maintained by Defendant Nos. 1 to 4 and the said Defendants shall not reactivate their sponsored advertisements with the Google Ads Program with respect to the marks 'APPY' or 'APPY PIE' or other marks which are identical/confusingly similar to the said marks, or use the said marks as Ad words on the Google Ads Program, insofar as the territory of India is concerned.

12. It is made clear that for the time being, this order of injunction is being granted only with respect to the Defendants' use of the Plaintiff's marks in India. However, the Court is also concerned if the Plaintiff's marks are being used internationally by Defendant Nos. 1 to 4 as part of the Google Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 9 of 10 Signing Date:22.07.2022 10:54:08 Ads Program then, whether such advertisements would be accessible through VPN services by users in India, thereby effectively defeating the purpose of the present injunction and, if so, the manner in which the said concern would be addressed by the Defendants. The same shall be dealt with in the reply to be filed by the Defendants to this application.

13. Let the reply to this application under Order XXXIX Rule 1 and 2 CPC be filed within four weeks. Rejoinder, thereto, be filed within four weeks thereafter.

14. List for hearing on the injunction application on 14th October, 2022.

PRATHIBA M. SINGH, J.

JULY 20, 2022 dj/ms Signature Not Verified Digitally Signed By:DEVANSHU JOSHI CS(COMM) 467/2022 Page 10 of 10 Signing Date:22.07.2022 10:54:08

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Delhi High Court - Orders