Seraphic Insights

In this engaging podcast series hosted by Black Silk, KPS Kohli (Partner at Seraphic Advisors) and Debopama Roy (Global General Counsel Airmeet) delve into the implications of the newly enacted Digital Personal Data Protection Act, 2023 (DPDP). Here are the key highlights from their discussion:

1. Understanding the DPDP Act:

• The DPDP Act is a landmark legislation aimed at safeguarding digital personal data in India.
• KPS Kohli and Mayank Grover explore its seminal provisions, emphasizing the need for compliance by businesses and individuals.

2. Role of the ‘Consent Manager’:

• The role of a ‘Consent Manager’ under the DPDP Act is critical. It involves obtaining and managing user consent for data processing.
• Debopama Roy sheds light on the responsibilities and challenges faced by Consent Managers in ensuring lawful data handling.

3. Balancing Privacy and Innovation:

• The discussion underscores the delicate balance between privacy rights and fostering innovation.
• Businesses must adapt to the new legal landscape while leveraging data for growth.

The Division Bench of the Delhi High Court has held that any act of surveillance is not within the purview of telecom service providers (Vodafone in this case); instead, they are conducted under the directions of the concerned government, when an authorized officer is satisfied that it is expedient to do so in the “interest of sovereignty and integrity of India, the security of the State, friendly relations with the foreign states or public order, or for preventing incitement to the commission of an offence”, and is exempt under Right to Information Act, 2005.

The decision was passed in Telecom Regulatory Authority of India (TRAI) v. Kabir Shankar Bose & Ors. on December 22, 2023, wherein the Division Bench had set aside the Ld. Single Judge judgment in line with Central Information Commission’s order that TRAI has power to access information from a private body under any other law for the time being in force.

The findings of the Court were:

1. Section 11 of the TRAI Act, 1997 defines functions that are to be discharged by TRAI and one of the functions assigned to the Authority under sub-section 1 (b)(i) is to ensure compliance with terms and conditions of the licence by telecom providers and the same cannot be read so broadly to include each and every action taken by the telecom service providers.
2. Section 11(3) of the TRAI Act specifically states that TRAI while discharging its functions outlined in sub-sections (1) and (2), should not act against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with the foreign states, public order, decency or morality.
3. To hold that asking for information in relation to interception or tracking or tapping of a phone would be within the power of TRAI under Section 12 of the TRAI Act, would not be in conformity with the functions specified in Section 11 of the TRAI Act.
4. Directing TRAI to call for information and interfering with the functions of telecom service providers would not be in consonance with the objectives enumerated under the TRAI Act.
5. Information in relation to interception, tapping or tracking of a phone is exempt under Section 8(a) of the Right to Information Act, 2005, as such, disclosure of information would impede the process of investigation and may be construed to prejudicially affect the security, integrity and strategic interests of the country.

The Division Bench of the Delhi High Court has held that merely having a global reputation or goodwill is not sufficient to claim trans-border reputation for a trademark. In order to succeed, it is imperative for the claimant to prove and establish existence of goodwill and reputation in the concerned territory.

The decision was passed in Bolt Technology OU v. Ujoy Technology Private Limited & Anr., on November 30, 2023, in line with the 2017 judgment rendered by the Supreme Court in Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. on the subject of transborder reputation.

The Single Judge had directed that having installed a limited number of electric vehicles and not being engaged in providing electric vehicle charging services globally, Bolt Technology cannot be attributed a transborder reputation in offering EV charging services that extend to India.

The Court held:

1. It is essential to establish goodwill and reputation of a trademark in India; merely having trans-border reputation is not sufficient. Thus, territoriality principle applies and not the universality doctrine.
2. For a claimant to be entitled to protection of trademark, the mark must have a substantial presence among consumers. Establishing reputation itself relies on widespread recognition within a significant and notable segment of an audience.
3. A claimant lacking presence or a customer base in India, or failing to establish such presence through sufficient advertisement or promotional activity, or one who fails to establish a global reputation widely recognized by the Indian consuming public, would be disentitled to claim protection.
4. The goodwill for the mark necessarily implies that the claimant has made significant and substantial revenue. Reputation would stand satisfied if the Court is to find substantial presence of the mark in the market.
5. The technical progress and precedents that are set may have enabled the Court to eliminate the requirement of a real market. However, in determining the robustness of a trademark’s global reputation, it is crucial to establish and assess the metric of substantial goodwill or reputation through sufficient evidence within the Indian market.

In a recent Black Silk new podcast, KPS Kohli, Partner at Seraphic Advisors were invited by Black Silk, in this thought-provoking discussion, Ray Sharma and KPS Kohli delved into the fascinating world of artificial intelligence (AI). Here are the key takeaways from their colloquy:

1. Exploring AI’s Frontiers:

• Ray Sharma, an expert in blockchain and cryptocurrencies, engaged in a dynamic conversation with KPS Kohli, a partner at Seraphic Advisors.
• They explored AI’s impact on various domains, from finance to healthcare, and its potential to revolutionize our lives.

2. Ethical Considerations:

• The colloquy touched upon ethical dilemmas associated with AI. As AI systems become more autonomous, ensuring ethical behavior and accountability becomes crucial.
• Ray Sharma emphasized the need for responsible AI development and deployment.

3. Challenges and Opportunities:

• KPS Kohli highlighted the challenges of bias in AI algorithms and the importance of transparency.
• Ray Sharma discussed opportunities for AI in solving complex problems, improving efficiency, and enhancing decision-making.

4. The Human-AI Partnership:

• Both speakers agreed that AI should augment human capabilities rather than replace them entirely.
• Ray Sharma emphasized the symbiotic relationship between humans and AI, where collaboration leads to transformative outcomes.

In this engaging colloquy, Ray Sharma and KPS Kohli provided valuable insights into the evolving landscape of artificial intelligence.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) recently held that Over the Top (OTT) platforms are not governed by the Telecom Regulatory Authority of India (TRAI) Act, 1997 and would be covered by the Information Technology Act, 2000 and IT Rules, 2021.

Factual Background

The order was passed on October 04, 2023 in a Broadcasting Petition, in the matter of All India Digital Cable Federation (AIDCF) v. Star India Pvt. Ltd., wherein AIDCF contended that Star India’s practice of charging them for their channel while allowing free streaming of ICC World Cup cricket matches on mobile devices via their OTT platform is in violation of Regulation 3(2) of The Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017.

1. OTT services are not classified as TV channels since they do not necessitate permission or a license from the Central Government. Hence, they are outside the regulatory framework of the TRAI Act, 1997.
2. OTT platform is not covered under “Distributive Platforms” defined under Section 2(r) read with “Distribution of Television Channels or Distributor” defined under Section 2(s), and “Television Channel” defined under Section 2(pp) of Telecom Regulations 2017.
3. AIDCF has the option to maintain a separate list of consumers who have subscribed to Star Sports channel on their platform, considering the same content is accessible through video streaming on the OTT Platform which can be presented before this Tribunal by way of an affidavit, before the final hearing of the Broadcasting Petition.

This interim order weighs in favour of OTT platforms, keeping their operations outside the purview of the TRAI Act, 1997. However, this arrangement is subject to the final outcome of the matter.

Abstract

Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division. Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors.[1] and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors.[2] directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.

Factual Background

Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.

On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).

In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.

Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.

Analysis & Decision Of Court

The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.

Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.1. Interflora Inc. v. Marks & Spencer Plc. 2. and L’Oreal SA v. eBay International AG 3. in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.

It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.

The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.

It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.

Conclusion

This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.