Google has been hot linking images from our sites directly .This results in drop in visitors to our website from google search and a waste of our bandwidth as the images are stored directly from google by the users and only a few visit our site.
Google has also been placing Image Mismatch Manual Penalty for watermark protection images. Read about this Image Mismatch Manual Penalty here
There are many hot protection plugin out there that can protect your images from hotlinking on google by displaying a transparent watermark saying the user to click on the image to view full resolution. This can lead to more visitors from google images.
Here are a few most used hotlink protection plugins