Delhi High Court Ruling on Google and Trademark Violation
The Delhi High Court has determined that Google infringed upon Hindware’s trademark by permitting rival sanitaryware brands to advertise using keywords such as “Hindware.”
In its judgment, the court emphasized that by monetizing the keyword, Google capitalized on the commercial allure of Hindware’s trademark without appropriate consent.
Moreover, the court dismissed Google’s argument asserting that it functions merely as an intermediary and that keywords operate as latent triggers in the backend.
Details of the Judgment
On May 26, the Delhi High Court imposed a substantial penalty of ₹30 lakh on Google for breaching the trademark rights of the sanitaryware titan, Hindware.
A single-judge bench led by Justice Mini Pushkarna concluded that Google facilitated other firms to bid on the Hindware keyword through its Google Ads platform, thereby infringing on the trademark rights of the established brand.
Essentially, when users entered searches for terms like “Hindware” or related keywords such as “Hindware Sanitary,” the websites of Hindware’s competitors surfaced prominently in the search results, often overshadowing Hindware itself.
In its legal submission, Hindware contended this practice constituted both unfair competition and trademark dilution.
Restraining Orders and Implications
The court has placed a permanent injunction on Google LLC and Google India against utilizing Hindware’s registered trademarks as advertising keywords.
Additionally, the ruling acknowledged that Google’s keyword auctioning process contravened the Trade Marks Act of 1999.
Google’s defense claiming its status as a mere intermediary eligible for safe harbor was also rejected by the court.
Background of the Litigation
The legal conflict traces back a decade to 2013, when Hindware initiated a commercial lawsuit against competitors Cera and Grohe, as well as a separate claim against Google.
Hindware alleged that Cera and Grohe had purchased its trademarked keywords via Google AdWords, infringing its trademark rights.
While Hindware reached a settlement with Cera and Grohe, the lawsuit against Google persisted, with the tech giant remaining a notable defendant.
Revenue and Trademark Exploitation
In its May 26 ruling, the court highlighted that Google was profiting by auctioning trademarked keywords to competing brands, thus violating Hindware’s trademark by exploiting its “commercial pulling power” without authorization.
Google had posited that keywords serve as inconspicuous backend triggers—elements unseen by consumers—and therefore do not amount to trademark infringement.
However, the court refuted this stance, asserting, “It is not necessary that the registered trademark physically appear in an advertisement for the same to be used ‘in advertising.’”
The use of a trademark as a keyword to activate an advertisement for goods or services constitutes ‘use of the mark in advertising.’
Judicial Insights
Google further invoked safe harbor provisions, contending it merely provides an advertising platform while the determination of keywords and advertisement elements rests with advertisers.
Nevertheless, Justice Pushkarna clarified that Google is an active participant, not merely an intermediary. The judge underscored that by failing to restrict rivals from utilizing trademarks as keywords, Google neglected its due diligence obligations as outlined in intermediary guidelines.
Legal Precedent and Industry Impact
Though keyword bidding related to rival firms is a commonplace practice, the Delhi High Court’s ruling casts a spotlight on its legality, potentially paving the way for brands to pursue litigation against competitors engaged in such tactics. This could dramatically influence the landscape of digital marketing.
In response to the verdict, Zerodha co-founder and CEO Nithin Kamath expressed that Google is facilitating competitors’ ability to divert traffic rightfully belonging to Hindware. He further noted that Zerodha has suffered financially due to similar competitive practices.
Kamath remarked in a blog post, “Many brands, in an effort to capture traffic that should rightfully come to them organically, end up bidding on their own keywords… If you own a business and possess a trademarked name, you must still compensate Google, in hopes of rendering your name prohibitively expensive for your competition to utilize in ads.”
Source link: Inc42.com.
