Delhi High Court on the use of trademarks as keywords in Google Ads Program
Significant changes to benefit patent applicants and owners
The Delhi High Court ruled on two appeals involving Google’s use of trademarks as keywords in its Ads Program, finding that using trademarks as keywords does not inherently constitute trademark infringement, thus upholding Google’s practice in both cases.
Delhi High Court Restricts Sale of Refurbished Goods for ‘Reverse Passing-Off
Reverse passing off is not something that courts encounter every day. It occurs when a defendant purchases a plaintiff’s product, repackages, and sells it under the defendant’s mark or name, resulting in the public coming to associate the qualities of the plaintiff’s product with that of the defendant.
When this adversely affects the goodwill of the plaintiff, it is a reverse passing off. Recently, the Delhi High Court addressed this issue in Western Digital Technologies Inc & Anr vs Geonix International Private Limited.
The plaintiffs, Western Digital Technologies Inc and its subsidiary (Western Digital), manufacture storage devices under the trademarks ‘WESTERN DIGITAL’ and ‘ULTRASTAR’. They sued Geonix International Private Limited (Genoix) for refurbishing and rebranding storage devices, media players, routers, switches, bridges, desktops and solid-state drives (SSDs) and hard disk drives (HDDs), originally manufactured by Western Digital and selling them as new under the trademark ‘GEONIX’.
Upon becoming aware of the violation, Western Digital investigated the activities of Geonix, and the findings confirmed the refurbishment and rebranding of their products by Geonix. It was found that Geonix physically altered Western Digital’s trademarks, serial and model numbers, and other identifiers from the HDDs. Further, they effaced the erstwhile model and serial number on the printed circuit board (PCB) of the HDDs by reformatting the PCB with their own markings. Thereafter, Geonix rebranded and repackaged the discarded HDDs under the mark ‘GEONIX’, and sold these to customers by misrepresenting them to be new and unused HDDs.
Western Digital argued before the Court that this constituted a violation of the statutory rights in their trademarks. Further, they raised the issue of protection of consumer interest from deceptive marketing practices of Geonix. Western Digital demonstrated through technical test reports that despite the reformatting, refurbishing, and rebranding of HDDs by Geonix, Western Digital could still be identified as original manufacturers of the HDDs. This was found when a report was generated by running the HDDs on a device. Based on this evidence, Western Digital argued that Geonix has been unsuccessful in fully erasing the connection between the HDDs and Western Digital, and that, this constituted reverse passing off.
Geonix’s defence that they sell the products under their own brand and that the principle of exhaustion of trademark rights would apply to the case was rejected by the Court. Finding a strong prima facie case, the Court granted an interim injunction to Western Digital and restrained Geonix from altering or selling HDDs bearing the trademarks of Western Digital. The case will now be listed on April 3, 2024.
National handloom week: A time to fix the GI magic wand
The GI Act enacted in 2003 was believed to revive the dying handloom industry in India. However, 19 years later, the benefits failed to trickle down to the rural workers. What can we do to make the magic wand work?
India is celebrating the handloom week from April 7 to 14, 2022. While the handloom industry in India is thousands of years old, the industry is slowly dying. Some of the causes attributed to such a decline are the emergence of power looms and the benefits of the industry not trickling down to the grassroots.
In 2003, when India enacted the Geographical Indications of Goods (Registration & Protection) Act, 1999 (‘the GI Act’), there was a belief that registering handloom product names under the same could magically revive the dying industry. Successful European GIs were often cited as examples where registration magically transformed communities. Many Indian handloom products, among others, were thus registered, only to realise later that the GI Act held no magic wand. Despite registration and the ensuing media publicity, the markets are flooded with fakes, product credibility has been elusive, artisans are clueless about their GI ownership, their pockets remain light, and their communities are still underdeveloped. So, what is missing in the GI Act? The handloom week is an opportune moment to examine this.
Sustainable quality control lies at the heart of the success of any GI. Consistent high quality is an attractive force for a customer to repeatedly choose the same product. This can be achieved only through suitable measures implemented throughout the supply chain.
Unlike trademark branding, where it is simpler to get consistent quality for the branded products through licensing arrangements, it is complicated for GI branding. For example, textile brands like BIBA or FabIndia would be typically applied by the respective proprietors or their licensees after a quality check is done on each piece. Whereas, for a Kota Doria or a Chanderi, the GI tag is attached by the artisans, who are numbered in hundreds or thousands. They could be operating from their homes as opposed to factories. These artisans are the real owners of the GI and need no licensing. However, each artisan must ensure quality control by adhering to the specifications entered in the GI Register. Without stringent inspection mechanisms or quality control measures mandated in the legal framework coupled with sanctions for violation of the specifications, diligence and self-discipline of the artisan tends to wear off after a while. That is when inconsistency in quality creeps in and substandard products start to appear in the market.
Blend In or Stand Out? Branding Blunders of Indian Startups
Being low in descriptiveness makes a trademark high in exclusivity.
There is something about the recently concluded first season of Sony Liv’s reality TV show Shark Tank India that would bother intellectual property (IP) lawyers. While pitching their business ideas to the sharks (potential investors forming the panel of judges) in the hope that they would invest in their ventures, the participants (upcoming startup entrepreneurs) are baring many truths about the strength of their IP – or the lack thereof.
Notably, trademarks chosen by most of the participants for their respective products or services is reflective of the lack of legal strategy and advice that has gone into their creation.
Choosing a trademark is an important exercise by an entrepreneur – it is what the customers identify the entrepreneur with, be it on a supermarket shelf or on the entity’s signboard or business cards. The usual tendency of entrepreneurs is to adopt trademarks that reveal the nature of their products or services to the users.
Unfortunately, this is the very thing that is barred by trademark law – a trademark is weak if it is descriptive of the goods or services for which it is used, or if it indicates the kind, quality, intended purpose or geographical origin of the goods and services. The more a trademark is silent about what the business does, or its products are made of or where it comes from or what purpose its products or services serve, the better it is. It is best to leave it to the product or service itself to convey these attributes. Being low in descriptiveness makes a trademark high in exclusivity. Unfortunately, entrepreneurs often do the reverse, rendering their trademarks non-exclusive and commonplace.