An Indian court has stated that Google may be held responsible for selling a brand's name to competitors.

      The Delhi High Court ruled that allowing competitors to bid on the trademark 'Hindware' as an advertising keyword constitutes infringement, and that Google's safe-harbour protection does not apply in this case. The foundation of search advertising is based on the implicit idea that a platform can auction off any term, including another company's brand name, treating any legal repercussions as the responsibility of the advertiser. The Delhi High Court has now dismissed that notion.

      In a ruling issued on May 22, Justice Mini Pushkarna determined that Google is liable for permitting competitors to bid on the trademark “Hindware” as a keyword for advertisements. The court issued a permanent injunction against Google LLC and Google India from offering the trademark as a keyword and mandated them to pay Hindware Limited, an Indian manufacturer of sanitaryware, ₹30 lakh, approximately $31,600, as damages. Although the amount is small, the reasoning is significant.

      The conflict is not new. Hindware initiated legal action after discovering that competitors, such as the fittings companies Cera and Grohe, had acquired “Hindware” and similar terms as keywords, which resulted in sponsored links to their rivals appearing in response to searches for Hindware. Those advertisers reached settlements, leaving Google as the sole defendant and transforming a typical trademark dispute into a significant examination of a platform's responsibilities.

      Google's defense was the standard argument: it simply reserves keywords and that any trademark usage is the responsibility of the advertiser placing the bid. The court did not find this convincing. It concluded that Google actively promoted trademarked terms through its Keyword Planner tool, conducted the auctions that determined their price, and profited each time a user clicked on a sponsored link triggered by those keywords.

      Based on this, Justice Pushkarna asserted that utilizing a trademark as a keyword constitutes “advertising” usage, even if the trademark does not appear in the actual advertisement.

      The most significant aspect pertains to the safe harbour provision. According to Section 79 of India’s IT Act, intermediaries are protected from liability regarding user actions on their platforms. The court ruled that Google forfeits this protection when it algorithmically determines who is displayed and profits from that decision, and that its lack of investigation into trademarked keywords represented a failure of due diligence. In this interpretation, a platform that influences outcomes is not simply a neutral conduit.

      This reasoning extends the implications of the ruling. Keyword bidding on a competitor’s brand is common practice in the advertising industry, and this judgment could hold both the bidder and the platform accountable in India. This decision was received positively by lawyers and brand owners; if the logic is upheld, it may not be limited to keywords but could apply to any function where an algorithm significantly influences what users encounter, including ad targeting, content recommendations, and search rankings.

      While it is just one high-court ruling in a single large market, Google has the option to appeal, potentially testing whether the safe-harbour argument withstands scrutiny from a higher court. Nevertheless, the ruling arrives at a time when regulators around the world are scrutinizing the dynamics of Google’s advertising business, with issues ranging from EU antitrust cases to France's €150 million fine regarding its advertising policies. What India has contributed is a different inquiry: not whether Google's advertising market is equitable, but whether it can continue to sell words that it does not own.