2nd UPDATE: Google Gets Positive Opinion On Trademarked Words
September 22 2009 - 8:59AM
Dow Jones News
Google Inc. (GOOG) should continue to let advertisers use the
trademarks of major brands as search keywords but should be liable
for their wrongful use, according to a legal opinion prepared for
Europe's highest court ahead of a final ruling on the issue.
Google is before the European Court of Justice, or ECJ, in
connection with a French case in which a number of companies,
including luxury goods giant LVMH Moet Hennessy Vuitton (MC.FR),
complained that Google had infringed their trademark rights by
allowing advertisers on the world's dominant search platform to use
company trademarks as keywords. When a search is made on these
keywords, the results will include links to rival products or to
firms selling counterfeit goods in the sponsored links section. The
advertising of counterfeit goods is against Google's terms of
service.
The French court hearing the case, the Cour de Cassation, is
asking the ECJ to rule on whether trademark owners can legally
prevent Google from selling the right to use their trademarks as
keywords.
"Google has not infringed trademark rights by allowing
advertisers to buy keywords corresponding to registered
trademarks," said the court's Advocate General Poiares Maduro.
However, Google may be liable for featuring content in its
adwords program that directly violates trademarks, Maduro said.
The ECJ's advisor said that in most cases Google's use of
trademarked keywords doesn't infringe the law, as Internet users
rightfully expect more information and advertising to be returned
as a result of a search query than just the products of the firms
that own the trademarks.
"This opinion, if followed by the court, will be a major defeat
for brand owners and would mark victory in Europe for Google's
AdWords business,"says Adrian Heath-Saunders, a trademark partner
at law firm Wedlake Bell.
Google is currently in litigation over its AdWords business in
countries including England, France and Germany.
"We believe that selecting a keyword to trigger the display of
an ad does not amount to trademark infringement, and that consumers
benefit from seeing more relevant information rather than less,"
said Harjinder Obhi, Google's Senior Litigation Counsel, in an
email.
However, the court advisor said that the search engine should
still be considered liable for the wrongful use of keywords, with
the burden of proof lying with the trademark owners.
Common infringements include using a trademark for selling
counterfeit goods, as well as trying to confuse the consumer by
using a trademark that is very similar to a known brand.
Google has argued that it is an online platform, simply offering
a space for advertisers, and it should be advertisers that ensure
they don't infringe trademarks, as it wants to avoid the huge
expense of policing everything that is done on its sites.
Maduro said Google isn't simply an advertising platform as the
search giant has a financial interest in users clicking on
advertising links, for which it receives revenue based on the
number of clicks made.
The opinion provides a clear answer for the first time in the
E.U. as to how far trademark owners can restrict the use of their
brands online. It is likely to provide guidance to other online
companies such as eBay (EBAY), who have had to defend themselves in
court over alleged counterfeit goods and trademark violations.
Google said it noted with interest the Advocate General's
opinion, and awaits a final decision from the court in a few
months.
An LVMH spokeswoman said the company acknowledges the opinion
but noted that "it is not the court's final ruling." She added that
the opinion had clearly pointed out that Google is responsible for
what it sells, and can therefore be held responsible for selling
key AdWords which reproduce brands like Louis Vuitton.
Legal opinions are routinely prepared in ECJ cases by senior
court advisors known as Advocates General. The Advocate General's
proposed ruling isn't binding, but final rulings follow the opinion
in around 80% of cases.
-By Mike Gordon and Peppi Kiviniemi, Dow Jones Newswires; +352
691 180 766; mgordon.dowjones@gmail.com
(Mimosa Spencer in Paris contributed to this article)