Court Slaps INR 10 Lakh Fine On PolicyBazaar In Trademark Infringement Case Against Acko

In a twist of justice for online insurance aggregator PolicyBazaar, the Delhi High Court fined it INR 10 Lakh after it emerged that the company had concealed facts from the court against Binny Bansal-backed insurance company Acko. PolicyBazaar had obtained an ex-parte injunction in a trademark infringement case against Acko on May 16.

The high court on May 16 had ordered Acko General Insurance, which sells policies online, from using the trademark ‘policy bazaar’ in any manner “or form or combination or as an adword/key word programme through Google”.  In response Acko,  told the court that PolicyBazaar has “concealed and distorted material facts, made misrepresentations and false statements” to obtain the ex-parte ad-interim injunction.”

Further court proceedings showed that PolicyBazaar itself had been using Acko’s name in its website’s keywords. The insurance company claimed that PolicyBazaar was using its name as a keyword and therefore, its website was showing up as a sponsored link whenever someone was searching for ‘Acko’. PolicyBazaar admitted that it had done so but said that it had stopped the practice since April 23, 2019.

“I have no hesitation to say the concealment has been deliberate in this case. Plaintiffs (Policybazaar) could have easily mentioned the true and correct facts before the court. Plaintiffs ought to have candidly disclosed all material facts which have a bearing on the issues of the present case,” Justice Sanjeev Narula said in his May 28 order.

Reasoning its order, the court said that PolicyBazaar owed a duty to the court and concealment of facts amounted to making an attempt to pollute the pure stream of justice, the court said adding the judiciary had repeatedly instructed that a party who didn’t disclose all material facts wont have a right to be heard.

“Plaintiffs themselves for nearly one year were bidding for defendant’s trademark ‘ACKO’ and were therefore acting in an unfair manner. This critical factor would have certainly weighed upon the court while granting ex-parte ad-interim injunction,” the court added.

The court asked PolicyBazaar to deposit INR 5 lakh with the Prime Ministers Relief Fund and other Rs 5 lakh with Delhi Legal-Aid Services Authority.  It has also asked PolicyBazaar to submit an unconditional apology and an undertaking in court.

“This judgement creates a solid judicial precedent that will prevent occurrence of frivolous lawsuits filed with malicious intent and will protect bonafide businesses,” Acko said in a press note after the latest ruling.

Keyword Infringement Troubles

Keyword advertising has become a popular way for companies to increase their online exposure. Offered by search engine service providers, it involves the use of keywords in search terms which trigger the appearance of specific ads on search engine results pages.

However, off late cases of keyword advertising trademark infringement are rising. This occurs when online search engine companies sell trademarked words and phrases to competitors of the trademark owner. In plain terms, when a user searches for a company’s products online, a competitor rank their page above by simply buying adwords which reflect the company’s names or products.  This use of company names in google adwords has become a very prevalent market practice especially among ecommerce companies

However just using a variation of competitor’s name as keywords may not be an actionable offence. A lawsuit case against Chinese social media app Helo by popular regional language app Sharechat over infringing copyright was dismissed by the Delhi High Court in May. In October, ShareChat had dragged Helo to the court accusing it of inappropriately using its name to get a higher ranking on search words and  placing bids on the ‘ShareChat’ keyword on Google’s advertising platform. According to legal experts, normally such lawsuits are dealt under the Trademark Law.