Google Challenges Delhi HC Ruling On Keyword Advertising: What's The Case About

Google has challenged the Delhi High Court ruling from May that held it liable for trademark infringement for allowing advertisers to bid on a competitor's brand name as a search keyword, a decision that could have significant implications for India's digital advertising ecosystem.

Google has filed an appeal before a Division Bench of the Delhi High Court against the May 22 judgment, arguing that the ruling could reduce consumer choice, affect competition in online advertising, and make India an exception to established global practices, as per news agency Reuters.

The appeal is expected to be heard in the coming days. However, a report by Business Standard (BS) said that the hearing may be heard on Friday itself.

Google is yet to respond to Outlook Business' query regarding the matter.

What Is The Dispute About?

The case stems from a trademark dispute involving Indian sanitaryware brand Hindware, which alleged that rival companies purchased the keyword "Hindware" through Google Ads, enabling their advertisements to appear prominently when users searched for the brand.

Hindware argued that competitors were using its trademark to divert customers searching specifically for its products, resulting in trademark infringement.

The Delhi High Court had ruled in May that Google was responsible for allowing advertisers to bid on the registered trademark "Hindware" under its advertising platform, formerly known as Google AdWords.

The court directed Google to pay damages of around ₹30 lakhs, along with litigation costs, to Hindware.

What Is Keyword Advertising?

Keyword advertising allows businesses to bid for specific words or phrases that users enter into Google's search engine.

When a user searches for those keywords, paid advertisements may appear above or alongside organic search results.

The system is widely used by businesses to target potential customers searching for products or services.

Google's Arguments Against The Ruling

Google has maintained that keywords function only as internal triggers for displaying advertisements and do not amount to trademark use.

In its reportedly 4,761-page appeal, the company argued that preventing advertisers from bidding on trademarked terms would effectively hand trademark owners exclusive control over advertising space linked to their brands, as per Reuters.

Researchers have observed that consumers may search for a brand in order to identify and assess alternatives, the company wrote in its appeal, arguing the ruling will effectively grant trademark owners a "monopoly over advertising space to the detriment of consumers."

It reportedly intends to challenge the single-judge court's distinction between coined trademarks such as "Hindware" and more generic brand names. The company is expected to argue that the Trade Marks Act does not differentiate between the two categories.

Google also stated that the judgment makes India the "sole outlier" among global jurisdictions "with serious consequences for the digital advertising industry, online consumer choice, and competitive markets," as per the report.

In a statement to Reuters, the tech giant said it was appealing the order because it "diverges from established legal precedents in India". It added that its advertising policies reflect standard industry practices designed to encourage competition.

Why The Judgment Is Significant

The original ruling observed that Google's role went beyond merely providing technology.

Justice Mini Pushkarna held that Google could not avoid responsibility simply because it operated the advertising platform. "Google has attempted to sell something that it simply does not own," the judgement said.

The court further remarked that Google's advertising policy enabled the unauthorised commercial use of Hindware's registered trademark, as per Reuters.

Several Indian businesses publicly welcomed the ruling after it was delivered. Zerodha founder Nithin Kamath said his company had faced similar issues for years, while Shaadi.com founder Anupam Mittal remarked: "You create the brand. Someone else bids on it. Google takes the fee." He added that the verdict "could change the economics of online advertising for millions of businesses."

Previous Court Decisions May Influence The Appeal

Google has argued before the Division Bench that keyword bidding is a globally accepted advertising practice that promotes competition by allowing smaller businesses to compete with established brands.

The company is also expected to rely on earlier decisions of the Delhi High Court, the Supreme Court and the Competition Commission of India (CCI), which have recognised or permitted keyword advertising in certain circumstances, as per the BS report.

According to the report, the appeal may draw comparisons with the Delhi High Court's 2023 interim order in the MakeMyTrip versus Booking.com dispute, where a Division Bench declined to restrain Booking.com from bidding on MakeMyTrip's trademarks through Google Ads.

The Supreme Court later upheld that interim order without examining the merits of the case.

What The Outcome Could Mean

The appeal is being closely watched because its outcome could shape how trademark law applies to digital advertising in India.

If the earlier ruling is upheld, advertisers may face tighter restrictions on using competitors' brand names as keywords, potentially changing how search advertising campaigns are designed and priced.

If the decision is overturned, Google's existing keyword advertising model is likely to continue with greater legal certainty.

Beyond this case, Google is also dealing with multiple antitrust proceedings and other legal challenges in India, making the outcome of the appeal particularly significant for the company's operations in one of its largest markets.