Opinion: Google Adwords gets legal boost from Europe

The advertising, e-commerce, legal, retail and even counterfeiting industries looked on in anticipation this week, as the European Court of Justice's Advocate General delivered his opinion in the long running dispute between Google and Louis Vuitton Mallatier, writes Alison Bryce head of the IP & Technology team at Maclay Murray & Spens LLP.

The advertising, e-commerce, legal, retail and even counterfeiting industries looked on in anticipation this week, as the European Court of Justice's Advocate General delivered his opinion in the long running dispute between Google and Louis Vuitton Mallatier, writes Alison Bryce head of the IP & Technology team at Maclay Murray & Spens LLP.

Siding with Google's assertion that its 'Adwords' service does not constitute trade mark infringement, the opinion could increase the cost and complexity of luxury brand owners' online marketing, while swelling the search giant's coffers.

Louis Vuitton Mallatier, among others, opposes Google's sale to third parties of trade mark protected advertising 'keywords' such as 'Louis Vuitton'. When used as a search term, these keywords return sponsored links to the third parties' websites - some of which offer counterfeit goods - alongside the main body of results.

In what will be a serious blow to the owners of luxury brands worldwide, the opinion states neither the sale nor purchase of trade marked keywords necessarily constitutes infringement. As such, brand owners cannot prevent keywords being made available, or restrict internet users' access to information. Part of the court's reasoning is that modern consumers are sophisticated enough to understand how 'sponsored links' work, without creating confusion around the origin of particular goods or services.

The court's sole concession to trade mark owners is that they still have the right to use national liability laws, if they can prove a specific use has caused illegal damage their trade mark.

Even so, the resounding upshot of the Advocate General's opinion appears to be victory for Google and trade mark owners will be disappointed and perhaps surprised with the apparent departure from established trade mark protection.

The opinion supports Google's policy of no longer dealing with complaints from trade mark owners over the use of keywords and increases the potential for Google to secure revenue through the Adwords service.

Brand owners could now find themselves in a very competitive online advertising market, where keeping up with the crowd will be more complex and expensive. On the other hand, some consumers will consider the opinion a triumph for common sense, which rests well with our media-savvy society.

Although Google will not have to change its current policies, it would be wise to tread carefully until the final judgement is given, rather than assuming carte blanche.

Despite the publication of the opinion, Europe is split on this hot topic. Only the day before the release of the opinion, a French court ordered eBay to pay the Louis Vuitton Moet Hennessy group €80,000 for using the group's trade marks as keywords.

This is not the conclusion of the issue and, although usually very persuasive in subsequent cases, Advocate Generals' opinions are non-binding and the final judgement, expected next year, could sway in the opposite direction.

Alison Bryce is head of the IP & Technology team at Maclay Murray & Spens LLP

This was last published in September 2009

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