The Delhi High Court has imposed a ₹30 lakh fine on Google for infringing the trademark rights of Indian sanitaryware maker Hindware by allowing competitors to use the company’s name as an advertising keyword, in a ruling that could significantly impact India’s online advertising market.
Justice Mini Pushkarna, in a 163-page judgment dated May 22, found Google guilty of permitting rival companies to use “Hindware” as a keyword to target their own advertising without the company’s consent. The court described this practice as “free-riding” on Hindware’s reputation.
The court permanently restrained Google from using “Hindware” or phrases combining the name with “sanitaryware” and related terms as advertising keywords. Google must pay the fine within eight weeks.
At the center of the dispute was Google’s practice of allowing advertisers to purchase trademarks as keywords so sponsored links appear when consumers search for those terms. The court observed that it is not necessary for a registered trademark to physically appear in an advertisement for it to be considered used in advertising.
Justice Pushkarna ruled that using registered trademarks as keywords constitutes an “unfair advantage” under the Trademarks Act. The court rejected Google’s defense that it is merely an intermediary entitled to safe-harbour protection under the IT Act.
The judgment characterizes Google’s AdWords program as a commercial venture to monetize search engine advertising by displaying sponsored links. By enabling direct competitors to intercept users expressing interest in Hindware’s mark, Google engaged in “unfair practice” and sought to exploit the distinctive character of the well-known trademark for its own advertising business.
The court awarded nominal damages of ₹15 lakh in each of the two suits filed by Hindware Ltd, totaling ₹30 lakh in favor of the plaintiff. The same amount must be paid by Google LLC and Google India within eight weeks.
Hindware is also entitled to actual litigation costs for its two lawsuits and must file a “Bill of Costs” within two months.
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