The Delhi High Court has ordered Google to pay Rs 30 lakh in damages to Hindware Ltd, a sanitaryware manufacturer, after finding that internet users searching for Hindware's products were directed to rival manufacturers through Google's advertising system.
Court Ruling on Keyword Advertising
Justice Mini Pushkarna held that Google is liable to pay damages for allowing rival competitors to place advertisements using Hindware's trademark as keywords, leading to losses for the company. Google's Ads programme allows advertisers to bid on keywords to trigger their ads. Hindware argued that when consumers typed its trademark into Google's search engine, sponsored links for competitors appeared alongside the search results, diverting potential customers.
Unfair Advantage Under Trademarks Act
The court ruled that the use of trademarks as keywords amounted to an "unfair advantage" under the Trademarks Act. It restrained Google LLC and Google India from using 'Hindware', 'Hindware Sanitaryware', 'Hindware Sanitary', or 'Hindware Sanitaryware India' as part of advertising keywords on its platform.
Damages and Costs Awarded
The High Court also held that Hindware was entitled to actual costs of litigation. The court ordered the defendants to pay the amount within eight weeks.
Google's Commercial Venture
The judge observed that Google's AdWords programme was a commercial venture to monetise the use of the search engine for advertising by displaying sponsored links of various advertisers. By enabling direct competitors to intercept users when they expressed an interest in the plaintiff's mark, Google indulged in an "unfair practice" and also sought to exploit the distinctive character or repute of the plaintiff's well-known trademark to benefit its own advertising business.
