How Google's lucrative ‘grey zone’ turned black and white

A particular kind of frustration has quietly accumulated in boardrooms and marketing departments across India for the better part of a decade. A confident consumer, a committed consumer, a consumer who’s already grabbing their phone to search for a brand they know and trust, types that brand name into a search bar. The first thing they see is a competitor. It wasn’t because the competitor had a better product or more mindshare. Just because they paid Google to catch that moment.

For years this was just the cost of doing business in the digital age. Brands accepted it as a perverse but inevitable fact of search advertising, spending to build their name and then again to defend it against rivals who had invested in neither.

The conversation took a turn with the Delhi High Court's judgment in favour of sanitaryware maker Hindware, a landmark decision that permanently prohibited Google LLC and Google India from auctioning the trademark "HINDWARE" as a keyword trigger in its AdWords programme. The court directed both the Google entities to pay nominal damages of Rs 30 lakh within eight weeks of the ruling. The case, filed in 2017 after competitors Grohe and Cera Sanitaryware were discovered to have bought the brand’s registered trademark as a keyword, had been slowly making its way through Indian courts for nearly a decade. But its verdict may set the pattern for the next.

The Loophole That Ran Out

This decision matters more than one brand’s victory in court, as India’s courts had previously handled the same question and consistently failed.

The legal development has three cases. In the DRS Logistics case, involving the trademark “Agarwal Packers and Movers,” the Delhi High Court division bench ruled in 2023 that mere keyword use does not amount to infringement unless consumer confusion can be proved. Google thrived on what practitioners dubbed the “confusion test” loophole. The following year, the Supreme Court refused to hear MakeMyTrip’s petition against Google regarding the same practice, citing a lack of demonstrated confusion between the services of MakeMyTrip and Booking.com.  

The Hindware judgment dismantled both precedents by choosing an entirely different legal instrument.  Justice Mini Pushkarna applied Section 29(8),  a provision covering advertising that takes "unfair advantage" of a trademark or acts contrary to honest commercial practices, instead of proceeding under Section 29(2) of the Trade Marks Act, which requires proof of consumer confusion. Invisible use of a mark to trigger a competitor's advertisement is sufficient. The court also found that, since "HINDWARE" is a coined term with no dictionary meaning, any search for it reflects explicit brand intent. A user typing it is not browsing a category. They are looking for one thing.

The court went further in addressing Google's liability, rejecting the technology giant's argument that it was merely a neutral intermediary. The judgment found that Google actively suggests trademarked terms to advertisers through its Keyword Planner Tool, conducts real-time auctions for those marks, and determines which advertisement is ultimately displayed. It earns revenue at the precise moment a user clicking on a competitor's ad is diverted away from the brand they were searching for. That, the court held, is not the conduct of a passive platform.

Hindware, having settled its litigations with Grohe and Cera, used their admissions of infringement against Google. Those settlements, the court said, demonstrated that by facilitating and monetizing the practice, Google could not escape independent liability just because the advertisers had made up.

The Market Reality Behind the Verdict

The ruling comes against a backdrop that the industry has long known, but rarely dissected in public. A 2024 study by Northeastern University estimated that about $50 billion a year — or roughly a third of Google’s global total search advertising revenue — comes from ads served on searches for specific brands or websites. Google India’s gross advertising revenue for FY25 increased 11.3 percent year-on-year to Rs 34,742 crore. The Rs 30 lakh damages the court awarded equates to about four and a half minutes of that India revenue. As legal experts point out, the symbolic value of the judgment far exceeds its financial one. The real instruments of change are the permanent injunction and the precedent it sets.

Jay Patel, Founder of XSquareSEO, frames the issue in terms of intent rather than infringement. "Search intent is not inventory to be auctioned. It is an asset that brands spend years and millions of rupees creating. When a consumer searches for a brand by name, that is not discovery. That is destination intent." For Patel, the Hindware ruling is the first serious institutional challenge to a model that had, until now, treated brand equity as available real estate. "This ruling shifts the debate from trademark infringement to ownership of digital demand itself."

Pankaj Srivastava, Founder and CEO of Uno Search, describes the compliance implications as immediate and far-reaching. "This verdict fundamentally resets the rules of the Google Ads ecosystem in India. For years, competitor keyword bidding existed in a legal grey zone, widely practised, commercially effective, and largely unchallenged. That grey zone no longer exists." Srivastava says his agency has already begun auditing client campaigns for trademark exposure. "The question shifts from 'can I bid on my competitor's brand name?' to 'can I capture the same buying intent through category keywords, problem-statement keywords, and comparison-based creative?' That is a more sophisticated, more sustainable approach to paid search."

A Signal, Not Just a Sentence

For Mihir Mehta, Co-founder and Managing Partner at 0101.Today, the ruling's significance lies less in its legal technicalities and more in the assumption it challenges. "Platforms like Google have historically allowed bidding on competitor trademarks as part of search advertising mechanics, while restricting trademark usage within ad copies. That created a long-standing grey area where platform practices and legal interpretation did not always align." Mehta is careful not to overstate the immediate disruption, noting that the matter could still see further legal interpretation given the near-certainty of a Google appeal to the division bench. But the directional signal, he argues, is unambiguous. "This pushes the ecosystem toward stronger governance and more legally aligned media practices."

Abhinav Sehgal, Founder of SEO Designs, identifies an asymmetry the ruling brings into sharp relief. Brands, particularly market leaders, have effectively been paying twice in the current model. Money spent building awareness and consumer preference is followed by money spent defending that preference in search auctions against rivals who had invested in neither. "The Hindware ruling ponders whether the model is fair," Sehgal says. "If a consumer is seeking a brand, should competitors be allowed to interrupt this journey by using paid ads?"

But the ruling doesn't mean good news all around the industry. Sehgal acknowledges that for challenger brands and new entrants, competitor keyword bidding provided a cost-effective route to visibility alongside established players. In some markets, restricting the practice could further strengthen the advantage of incumbents already in a strong organic position. The next phase of the legal and commercial debate will probably focus on the balance between trademark protection and competitive access.

What Comes Next

The immediate horizon is clear, if not the timing. As of May 29, 2026, Google has not filed an appeal, but it is widely expected to, given its conduct in the DRS Logistics matter, where it challenged a single judge’s interim order all the way up to the division bench over two years. Any permanent injunction shall be effective pending appeal unless stayed. The payment of Rs 30 lakh is due by around July 17, 2026.

The ruling's impact goes beyond the courtroom, and has already started to change strategy discussions at agencies and within brand marketing teams. This precedent now gives direct legal standing to a longer list of Indian brands. The same protection was given by the court to Hindware as any coined trademark that is registered, a word with no dictionary meaning created solely to identify a brand. Swiggy, Zomato, Zerodha, Myntra, Nykaa, Razorpay and dozens of other branded digital native companies operate under coined marks and could seek similar remedies if they choose.

Srivastava sees this as a commercial opportunity for brands to respond strategically, rather than defensively. Brands that protect their trademark visibility today with solid branded keyword strategies, good quality scores, and a real AI search presence will capture the high-intent traffic that competitors used to hijack. “The court has made it a level playing field. The most benefit will come to the brands that respond strategically."  

The Hindware decision didn’t start out as a story about the future of search advertising. It began when a sanitaryware company found that a competitor bought its name as a keyword on Google in 2013. It took 13 years, 2 settled defendants and 163 pages of judicial reasoning to settle. What was settled in the end was not simply a trademark dispute. It was about who has the right to be found when you’re already being looked for. India's answer, at least for the moment, is the brand that gave the name in the first place.