Google does not violate the trademarks of companies when it allows online advertisers to use keywords identical to those trademarks, according to a ruling handed down by a European court.
On Tuesday, the European Union's highest court cleared Google in a trademark lawsuit filed by luxury goods maker Louis Vuitton and two other companies. One of several businesses owned by LVMH, Louis Vuitton had argued that the search giant was infringing on its rights by allowing other advertisers to use its trademarks as search terms for Google's AdWords. The concern is that by using such keywords, competing products could show up in search results alongside the trademarked items.
The Luxembourgh-based European Court of Justice (ECJ) disagreed as far as Google's culpability, issuing a statement on Tuesday that "Google has not infringed trademark law by allowing advertisers to purchase keywords corresponding to their competitors' trademarks." But the decision doesn't leave Google completely in the clear.
The court also found that Google is obligated to remove ads if trademark owners complain that their rights have been violated. The judges sidestepped the issue of whether Google is responsible for policing AdWords on its own to track down and remove any violations. Instead, the ECJ said, that is a matter for national courts to examine.
The ruling did indicate that the actual online advertisers, rather than Google, could be found culpable of violating registered trademarks.
"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," said the court in a statement.
In a blog post Tuesday, Google said the ruling confirms that it has not infringed on trademarks. The company painted the case as an attempt to restrict the information available to users conducting Web searches.
Written by Harjinder Obhi, Google's senior litigation counsel for Europe, the blog post added that Google also has strict policies in place to stop the advertising of counterfeit items and that the company works with trademark owners to catch and deal with counterfeiters. The advertising and sale of fake goods has been a concern for LVMH and other companies, prompting them to take legal action against eBay as well as Google.
LVMH hailed the court's ruling that an online advertiser can't use a trademark without the consent of the trademark holder. "This long-awaited decision will be welcomed by the business community as well as by consumers," said LVMH in a statement. "It confirms and emphasizes the critical role played by trademarks in a dynamic economy to protect innovation and the investments carried out by businesses."
A group comprising several European luxury goods makers also chimed in, proclaiming the ruling as a victory for their industry. Guy Salter, a spokesman for the group, issued the following statement: "Today's ruling is important for both brand owners and consumers as it ensures that the principles of EU law will be applied equally to both offline and online in Europe. This upholds the logical conclusion that ownership of a brand name is the same no matter whether this is online or offline. This is a victory for common sense."
Google has been in and out of court with Louis Vuitton and other companies for years over trademark issues. In an attempt to resolve the matter, Google has repeatedly asked judges in both the U.S. and Europe to rule on whether its AdWords practices potentially violate trademarks and whether Google is responsible for policing the keywords used by its online advertisers. Last September, a major adviser to the European Union voiced his opinion in favor of Google, an opinion that may have had some weight with the European high court.