The European Court of Justice has ruled that Google does not breach European law by allowing advertisers to bid on trademarked terms via its Adwords product. The court rejected a case brought by luxury goods firm LVMH group, Moet Hennessy Louis Vuitton, which argued Google should prevent the sale of trademarked brand names as ad keywords.
A statement issued by the European Court of Justice (ECJ) this morning stated "Google has not infringed trade mark law by allowing advertisers to purchase keywords corresponding to their competitors' trade marks," but added, "Advertisers themselves, however, cannot, by using such keywords, arrange for Google to display ads which do not allow internet users easily to establish from which undertaking the goods or services covered by the ad in question originate."
LVMH initiated legal proceedings through the French Court of Cassation, which referred questions regarding the matter to the ECJ. Specifically, LVMH complained about the use of its brand names in the marketing of counterfeit goods through Google's products.
"We believe that user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts. For instance, if a user is searching for information about a particular car, he or she will want more than just that car's website. They might be looking for different dealers that sell that car, second hand cars, reviews about the car or looking for information about other cars in the same category," wrote Google's Dr. Harjinder S. Obhi, senior litigation counsel, EMEA in a blog post.
Obhi added, "Contrary to what some are intimating, this case is not about us arguing for a right to advertise counterfeit goods. We have strict policies that forbid the advertising of counterfeit goods; it's a bad user experience."
In the instance the origin of ads is unclear to users, however, the ECJ said it would be left to national courts to assess and take action accordingly. Individual advertisers could be held liable if their ads are found to mislead consumers, the court said, adding that Google could also find itself open to litigation if it is deemed to aid such behavior by allowing bidding on certain keywords, such as those related to counterfeit goods.
Essentially, the ruling puts Google and its Adwords product in the clear, but LVMH touted the result as its own victory, arguing that it simply places responsibility with advertisers themselves. In a statement released today, the firm said, "The full court of the European Court of Justice today ruled that an online advertiser cannot use a registered trademark as a keyword without the consent of the trademark owner."
The ECJ announcement appears to contradict that claim, however, instead stating that advertisers must clearly disclose within their ads the origin of the products on offer when making use of branded terms.
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Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.