Google Triumphant in Trademark Case

by Katy Murcutt - Paralegal

23 March 2010, filed under Trademarks

This morning the European Court of Justice (ECJ) ruled in favour of Google after a court battle between the search engine giant and the luxury goods company Louis Vuitton. The matter at the centre of this long-running case was that of Google’s use of Louis Vuitton‘s trademarked brand names in search advertising.

Louis Vuitton, part of the LVMH group, argued that Google had acted illegally in allowing other companies to bid to use its brand names as keywords to generate advertisements on its website.

The EJC stated that Google had not infringed trademark laws by permitting advertisers to purchase keywords consisting of registered trademarks. France’s highest court, the Cour de Cassation, shall officially decide the outcome of this case due to the high profile nature of the case and the contemporary issues that need to be decided as the ECJs decision is arguably a setback for many registered trademark owners.

If the French court affirms the decision of the ECJ, the scope of trademark rights for brand owners advertising online may become more limited as the requirements for determining registered trademark infringement will not be met. As a result, some advertisers may gain a commercial advantage by being able to use the reputation of the trademarks of others.

The ECJ asserted that advertisers ought to be more transparent when using competitors trademarks so that consumers are able to recognise the origin of the particular product they have searched for. This premise is based around the general consensus that Google should not allow the displaying of advertisements which do not enable users to locate the exact source of the goods and/or services advertised on Google’s pages.

For many years Google prohibited advertisers from purchasing other’s trademark brand names to use as keywords. However, in 2004, Google amended its policy to enable advertiser’s to use keyword brand names in North America and by 2008, the United Kingdom and Republic of Ireland had been included in this.

In September 2009, the ECJ issued Google with an interim legal judgment stating that it had not infringed trademark rights, which the ECJ later confirmed in its conclusion of the case.

Google’s lawyers were initially concerned at the potential outcome of the case as the court’s decision could have been detrimental to Google’s business model, which had been built based on Google’s AdWords system – a keyword tool.

Although the current ECJ’s decision has gone in Google’s favour, the Cour de Cassation may overturn the court’s decision if it deems the decision as being a setback for brand owners.