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Google wins battle over trademark AdWords

Google did not infringe on trademark law by letting advertisers purchase competitors' trademarks as keywords, the European Court of Justice has ruled

Europe's top court has ruled that Google did not infringe on European trademark law by letting advertisers purchase keywords corresponding to their competitors' trademarks, but it has also warned against using such trademarks to trick web surfers.

The European Court of Justice (ECJ) found in Google's favour in the latest round of a seven-year-old battle between the search giant and three French plaintiffs. The luxury goods firm Louis Vuitton Malletier, the travel firm Viaticum and Luteciel, and CNRRH — owner of the personals website Eurochallenges — brought the trademark infringement suit against Google and Google France.

However, the ECJ said its ruling on Tuesday that this does not mean advertisers could use Google's AdWords — paid-for keywords that provide prominent advertising within search results — 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".

For Google, the case had not been about the search company "arguing for a right to advertise counterfeit goods", but rather about trying to "ensure that ads are relevant and useful", Google senior litigation counsel Harjinder S. Obhi said in a blog post on Tuesday. 

"Some companies want to limit choice for users by extending trademark law to encompass the use of keywords in online advertising," Obhi said. "Ultimately, they want to be able to exercise greater control over the information available to users by preventing other companies from advertising when a user enters their trademark as a search query."

In 2003, Vuitton, Viaticum and CNRRH sued Google because their competitors had bought AdWords for trademarks owned by the plaintiffs. In the case of Vuitton, the AdWords sent users to sites selling imitation Louis Vuitton goods, while the trademarks corresponding to Viaticum and Eurochallenges trademarks sent users to competitors' sites.

A French court found in the plaintiffs' favour, ordering Google to stop providing the AdWords in question and pay a fine. The case made its way to the French Court of Cassation — France's highest court for final appeals — which asked the ECJ for its opinion.

The ECJ said on Tuesday that an advertiser purchasing an AdWord that corresponds to someone else's trademark was using that word "in relation to its own goods or services".

However, the ECJ said, trademark holders can take action in national courts against advertisers who "arrange for Google to display ads which make it impossible, or possible only with difficulty, for average internet users to establish from what undertaking the goods or services covered by the ad originate".

The court added that the provider of an automated referencing service such as AdWords cannot be held liable for advertiser data stored on its systems — unless it is made aware that the data is unlawful, in which case it becomes liable if it does not take the data down.

Obhi said in his statement that the ECJ's ruling "confirmed that European law that protects internet hosting services applies to Google's AdWords advertising system".

"This is important because it is a fundamental principle behind the free flow of information over the internet," Obhi said.