Under Google’s Adwords system, key words can be purchased that when entered into the search engine by an internet user will bring up sponsored links or adverts.
The question of whether the purchase of trademarks as key words constitutes trademark infringement was referred to the ECJ by French courts after luxury goods provider LVMH brought a case against Google.
Published today, the ECJ’s ruling says that purchasing trademarks as key words might constitute infringement depending on how they are used.
According to the ruling, a trademark holder would be able to prohibit such use if it was not clear to an average internet user whether the products or services being advertised come from the trademark holder (or an entity linked to it) or from a third party.
This is good news for brand owners in that it should help cut down on the number of counterfeit goods being advertised using the trademarks as key words.
'Step towards clarification'
LVMH has taken the decision as a success, with senior executive vice president Pierre Godé calling it a ‘critical step towards the clarification of the rules governing online advertising’.
“As the world’s leading luxury group, with more brands actively engaged with the internet than any other luxury company, we are committed to working with all parties, including Google, to eradicate illicit online practices and to promote a framework that fosters the continued growth of the digital economy,” he said.
Google also regards the decision as a success as the ECJ did not rule that its sale of the trademarks as keywords to third parties was an infringement, and the ruling did not threaten the AdWords system.
“It also 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,” commented Google’s litigation counsel for Europe, Africa and the Middle East Dr. Harjinder S. Obhi on the Google official blog.
The ECJ has established the legal principles which can now be applied in national courts, and the outcome of the LVMH Google case will rest on the decision of the French courts, explained lawyer Tom Scourfield at CMS Cameron McKenna.
“For brand owners this is a favourable development. While it does not stop third parties from purchasing trademarks as key words, it does make it clear that how the key words are used can result in trademark infringement. It is much more positive than the advocate general’s opinion,” he told CosmeticsDesign-Europe.com.