Google moves Delhi HC against trademark infringement ruling in Hindware AdWords case

Tech giant Google has approached the Delhi High Court against a single-judge order that held the company liable for trademark infringement over the use of Hindware's registered trademarks as advertising keywords on its Google Ads (formerly AdWords) platform.

A Division Bench comprising Justices V. Kameswar Rao and Manmeet P.S. Arora on Friday issued notice to Hindware on Google's appeal and listed the matter for further hearing on July 24. The Bench, however, declined to grant interim relief by staying the direction requiring Google to pay damages at this stage.

"We will have it on July 24 for final disposal," the Bench observed while refusing to interfere with the earlier judgment. Senior advocate Abhishek Singhvi, appearing for Google, argued that the single-judge ruling was inconsistent with earlier judicial precedents as well as internationally accepted practices governing online advertising.

The appeal challenges a May 22 judgment in which a single judge of the Delhi High Court directed Google to pay Rs 30 lakh in damages to Hindware for permitting the use of the sanitaryware company's registered trademarks as keywords in its Google Ads programme.

The dispute arose from two trademark infringement suits filed by Hindware Ltd. The company alleged that Google allowed advertisers, including competitors, to purchase keywords incorporating Hindware's registered trademarks such as "Hindware", "Hindware Sanitaryware", "Hindware Sanitar" and "Hindware Sanitaryware India". According to Hindware, this diverted potential customers searching for its products to competing brands.

In its ruling, the single judge held that Google's conduct gave competitors an unfair commercial advantage and violated the provisions of the Trade Marks Act. The court observed that enabling rival businesses to target consumers searching for Hindware's trademarks amounted to an "unfair practice" and exploited the goodwill and reputation associated with the brand for Google's advertising business.

The court further noted that Google had not obtained Hindware's prior consent before offering or selling its registered trademarks as advertising keywords to third parties.

Rejecting Google's defence under Section 79(1) of the Information Technology Act, the single judge ruled that the company's role extended beyond that of a passive intermediary. The court held that Google's practice of auctioning and selling trademarks as keywords was an active commercial activity and therefore did not qualify for the "safe harbour" protection available to intermediaries under the IT Act.

The Division Bench will now examine Google's challenge to the findings and the award of damages. The matter is scheduled to come up for further hearing on July 24.

(With PTI inputs)