In a landmark judgement, the Delhi High Court has fined Google Rs 30 lakh for permitting the trademark ‘Hindware’ to be used as a keyword on its Google Ads platform. The keyword was used by rival firms without permission from the sanitaryware major.
In the verdict, Justice Mini Pushkarna ruled that Google had violated Indian laws by allowing the use of a trademark as a keyword, amounting to trademark infringement. The court quashed Google’s argument that it was only an intermediary in the case.
“The present issues are decided in favour of the plaintiff (Hindware) and against the defendants (Google),” the court said, as per reports.
What was the case about?
Hindware owner HSIL Ltd had moved the court alleging that Google was allowing its rival companies to purchase the keyword ‘Hindware’ on the Google Ads platform to appear prominently in search results. Web developer Omkara Infoweb was also named in the case by HSIL Ltd.
The sanitary major alleged that when users searched for the company Hindware on Google, advertisements from rivals like Cera Sanitaryware and Grohe appeared on top as they had purchased the keyword by the same name from Google.
Keywords are hidden at the frontend, and these terms help guide search results according to user intent.
Hindware argued that while the users’ intent was to search for products of the Hindware brand, the search results promoted its rivals, thereby causing business loss.
Hindware further pointed out during the course of the case that the trademark has been in use since 1991.
While companies like Cera and Grohe later settled the matter with Hindware, the court proceeded with the allegations against Google to settle whether the tech major was responsible for permitting the use of trademarked names as advertising keywords.
What the High Court said
The court rejected Google’s defence that keywords cannot be seen by users and that they only work in the background. It further noted that Google was not a passive platform and was very much involved in the marketing of the keyword by putting it on sale, adding it to auctions and by monetising traffic generated through the search keyword.
The High Court directed Google not to allow the use of terms such as HINDWARE, HINDWARE SANITARY, HINDWARE SANITARYWARE and HINDWARE SANITARYWARE INDIA as keywords in advertisements on its Google Ads platform.
The ruling in the case has wider implications for the online advertising industry in India as well, as it hits at the core of the practice of trademark bidding in performance marketing. The consequences will especially be felt by brands that rely on competitors’ keywords to target customers.
It could also open a Pandora’s Box and lead to disputes involving digital advertising practices.