A European Union (EU) court is expected to rule this week on whether Google Search Ads violate European trademark laws. Search Ads are advertisements that are featured along with Internet search results when users search for specific brand names. The court will also give a ruling on whether Internet search services provider Google, Inc. can be held liable for trademark breaches in ads that appear on its website. The EU ruling is expected to set the boundaries for trademark owners to restrict the use of their brands online.
It is expected that if the ruling goes against Google, it would have major repercussions for the Internet search services industry, which includes players such as Yahoo and Microsoft’s Bing. The search ads, which tag advertisers to popular search phrases including brands, constitute a significant source of revenue for the search engines.
The court proceedings follow complaints filed by French luxury goods firm LVMH Moët Hennessy Louis Vuitton and various other trademark holders. LVMH sued Google when searches for the ‘Louis Vuitton’ trademark reportedly spewed ads for counterfeiters and fake goods. A French court then asked the European Court of Justice to spell out its interpretation of European trademark law.
The two questions to be addressed are: does the use of a trademark as an advertising tag violate EU trademark law; are Google ads covered by EU’s e-commerce law.
In an opinion prepared for the court in 2009, it was said that Google's ‘adwords’ do not violate trademark law. However, it was recommended that Google should not be out of the ambit of trademark law, since it is running a commercial activity and not a public service.
Google’s argument is that it just offers an online platform for advertisers to feature their ads, and that if there is a trademark infringement it is the advertisers themselves who are liable for it.
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