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Google AdWords does not breach trademark rules, advocate general says

22 September 2009

Google has not broken intellectual property law by selling as keywords the names of famous brands, an advocate general at the European Court of Justice has said.

AdWords, Google's commercial arm which funds the development of the search engine, allows advertisers unrelated to a brand to buy keywords to increase the visibility of their products or services on the site.

When users enter these keywords in Google, the search engine lists the advertisers’ sites alongside natural results generated by the application of objective criteria.

The opinion of Advocate General Poiares Maduro is a blow to brand owners who fear it will increase the cost of protecting their trademarks online.

“Brand owners will have no recourse under trade mark law to defend themselves against some incredibly significant commercial losses,” said Kirsten Gilbert, Partner at Marks & Clerk Solicitors.

“In the recent High Court action concerning the use of sponsored keywords by a competitor, Interflora estimated that its costs involved in maintaining its search engine position increased by US$750,000 in the year following Google’s decision to allow third party bids on brand owner’s names.”

The case was started in the French courts by Louis Vuitton and other world-famous brands who claimed that Google’s service constituted unauthorised use of their trademarks.

The brand owners were concerned, among other, that the links displayed in the search results linked to sites offering counterfeit goods.

But in Case Case C-236/08 Google v Louis Vuitton and Ors, the advocate general rejected the argument. Keyword selection as such did not involve the sale of a product or service protected by the trademark, he said, and Google did not therefore infringe the claimants’ trade marks.

Similarly, the link established by search results between a keyword sold through AdWords and a brand did not constitute an infringement, however well-known the brand.

According to the advocate general, the display of relevant sites returned when searching on a particular keyword was not enough to create a risk of confusion in consumers’ minds between sponsored results or ads, and natural results.

“Internet users are aware that they will have to sift through the natural results of their searches, which often reach large numbers,” he said. “Sometimes they may not even be looking for the site of the trademark proprietor, but for other sites related to the goods or services sold under the trade mark: for example, they might not be interested in purchasing the trade mark proprietor’s goods but only in having access to sites reviewing those goods.

“Google’s search engine is no more than a tool: the link that it establishes between keywords corresponding to trade marks and natural results, even the more relevant sites, is not enough to lead to confusion,” he said. “Internet users only decide on the origin of the goods or services offered on the sites by reading their description and, ultimately, by leaving Google and entering those sites.

“Internet users process ads in the same way as they process natural results. By using AdWords, advertisers are in fact attempting to make their ads benefit from the same expectation of being relevant to the search – that is why they are displayed alongside the more relevant natural results.

“As with natural results, internet users will only make an assessment as to the origin of the goods or services advertised on the basis of the content of the ad and by visiting the advertised sites; no assessment will be based solely on the fact that the ads are displayed in response to keywords corresponding to trade marks.”

The court is expected to consider the case for final judgment in the next six months.

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Company, Consumer, and Contract Trade Charities