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Google wins ad keyword case against Louis Vuitton

March 23, 2010 | 12:58 pm

LOUIS-VUITTON-GOOGLE-ADWORD The European Union's highest court has ruled that Google Inc. does not infringe company trademark rights when it sells advertising through its Google AdWords service.

The ruling, which came down early Tuesday, was in response to LVMH Moet Hennessy Louis Vuitton SA's claim that Google shouldn't be allowed to sell advertisements on search pages that result from a user inputting a company's name into a query. LVMH claimed that Google, along with the advertiser, was liable for trademark infringement.

The European Court of Justice said that Google is merely a provider of advertisements, not a company infringing trademark rights. The court ruled that only advertisers are liable for infringing a trademark, and not the company providing a place for ads.

The main issue some companies have with Google's AdWords platform is that competitors can advertise their own products whenever the respective company's name is input into Google Search. LVMH argued that it alone should be able to control ads related to its brand.

For its part, Google said it's happy with the court's ruling. It believes that giving users a choice is important in the Web advertising space.

"We believe that user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts," Google's senior litigation counsel, Dr. Harjinder S. Obhi, said in a statement. "For instance, if a user is searching for information about a particular car, he or she will want more than just that car’s website. They might be looking for different dealers that sell that car, second hand cars, reviews about the car or looking for information about other cars in the same category."

But Google didn't necessarily escape unscathed. The court also ruled that if a trademark owner believes that its name is being used illegally, Google needs to remove the infringing ads from its service. If it doesn't, it could be held liable for trademark infringement.

For its part, LVMH said it too was happy with the result.

"This long-awaited decision will be welcomed by the business community as well as by consumers," the company said 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, and will avoid confusion on behalf of consumers as to the quality of the products and services they are buying."

From a revenue perspective, the ruling is a major victory for Google. If the court ruled against it, the company could have lost a significant revenue stream because of limits that would have been placed on advertisers.

But Google is not yet out of the woods. The ruling is the first in a long line of cases the company is facing around the world over the role that search keywords play in trademark rights.

-- Don Reisinger

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Photos: Louis Vuitton's fall 2010 women's runway in Paris. Credit: Peter Stigter & Jonas Gustavsson / For The Times

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