January 20, 2005 11:34 AM PST

Google loses trademark dispute in France

A French court has ruled that Google must refrain from using the trademarks of European resort chain Le Meridien Hotels and Resorts to trigger keyword ads.

On Dec. 16, a Nanterre court in France ruled that Google infringed on the trademarks of Le Meridien by allowing the hotel chain's rivals to bid on keywords of its name and appear prominently in related search results. Le Meridien had sued Google's French subsidiary on Oct. 25 after failing to reach an amicable agreement, according to court documents.

In a blow to Google's keyword-bidding engine, the French court ordered the company to stop linking ads to Le Meridien-trademarked terms by Monday or face a daily fine of $194 (150 euros). The company must also cease linking ads related to Le Meridien brands within 72 hours of whenever Le Meridien notifies it of listings in violation, or face a daily fine of 150 euros. Finally, Google must pay all court fees and a fine of $2,592 (2,000 euros).

A representative of Mountain View, Calif.-based Google said the company will appeal the decision. "We will continue to defend against this suit, which we believe is without merit," the representative said.

The decision casts a shadow on Google's billion-dollar money engine, keyword-based advertising, and potentially on the company's financial prospects in Europe.

The company makes about 98 percent of its revenue from keyword advertising linked to search technology, and many such ads are tied to branded or trademarked names of products and services. The technique has been effective because Web search is one of the primary ways that people find products and services.

But as the company has grown precipitously and has planted seeds of expansion in markets around the world, more companies have sought control over their brand names and trademarked terms in paid search.

In Europe, some courts have been favorable to trademark owners. Louis Vuitton sued Google and its French subsidiary for similar alleged trademark infringement, and a French court ordered Google to cease the practice and pay a fine.

In the United States, however, the company recently won a favorable ruling in a case brought by Geico, the car insurance company. In December, a judge in Virginia ruled that as a matter of law, Google's use of Geico trademarks to trigger ads did not constitute trademark infringement and that Geico had not proven its case for dilution sufficiently. Google still faces other copyright disputes, including one brought by American Blind and Wallpaper Factory.

6 comments

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150 euros a day??
Google will just pay that ridiculous fine and leave things as they are...
Posted by (6 comments )
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Not Necessarily
I doubt there they make 150 euros day from one term, "Le Meridien". It's a hotel chain I'd not even heard of. Besides, it's the principle. If they lose the appeal, then they'll stop the practice of allowing companies or people to bid for placement based on trademarked terms.

It's not a ridiculous fine, either. It's one area where I believe Google needs to be reigned in.

Cheers,
Doug
Posted by dmehus (30 comments )
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How does this ruling make any sense
Shouldn't Google be allowed to refer their customers to whomever the please, since it is their search engine?

So if Google is not supposed to display search results of competing customers, how is Google supposed to know who the "real" customer is. For example, Competitor wants to register with Google the phrase "the best there is" which Trademark holder owns. How would Google know a) Trademark holder really does own the phrase, b) Is it okay to display secondary, tertiary...results?

So is it illegal now to display AutoClub links when someone types in Microsoft's trademark phrase "Where do you want to go today?" OR is it only illegal if it is a competitor?? Which brings up my next hairy question...how do you determine if somebody is a competitor???

This doesn't seem to pass the smell test, because it relies too much on criteria that is not clearly defined or ill-advised at best.

I hope this type of ruling gets overturned and in the long run rejected.
Posted by (1 comment )
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It looks to me like the French may have gotten this one right! Hoteliers have divided our revenues so many times that it's made our industry very difficult to sustain profitability. Consumers are also unaware that they pay for this! The typical markup for Expedia's portion is 25%. That's right for every dollar booked the hotel pays .25 to Expedia. Certainly not the travel agent commission of old! As hoteliers, we have become accustomed to third party intermediaries and have tried to figure out how to live with them by paying commissions in an open and competitive on-line environment where they produce business we otherwise may not have gotten by paid ads (i.e. New York City Hotels, Las Vegas Hotels, etc.). But, to allow the theft of the consumers trying to book us directly by others stealing our branded and trademarked keyword terms is outrageous (Hampton Inn Bronx, NY). Google apparently says that if someone is a "reseller" it's okay. I disagree. We pay dearly for our franchises, our websites, our own ppc ads and to have someone use our pictures, our text our brand marks in both keywords and ads sabotages brand and trademark values, represents unfair business practices and, in my opinion, is a demonstration of copyright and trademark violations.
Posted by hotelharris (1 comment )
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