25 September 2009

Google’s AdWords do not infringe trade marks?


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Foto0016photo © 2007 Stefan | more info (via: Wylio)

Google has been no stranger to legal controversy in recent years. One of the hotly contested issues courts are currently debating involves the legality of Google AdWords, Google’s lucrative advertising program that is the source of nearly half of its revenue. The AdWords program allows advertisers to purchase words or phrases related to their businesses that will bring up their websites under “sponsored links” when those keywords are typed into Google’s search engine.

The issue at the center of the controversy is whether Google can legally sell and advertise those words which are trademarked terms. For businesses looking to protect their trade marks, Google’s practice of selling and advertising trademarked terms has raised questions as to its liability for trade mark infringement.
The French Cour de Cassation has recently made a referral to the European Court of Justice (ECJ) with questions concerning the use of Google AdWords. These issues arose out of litigation brought against Google by trade mark owners, including Louis Vuitton, who object to the reservation by Google customers of search keywords matching their registered trade marks.

In his Opinion, Advocate General Poiares Maduro suggests that Google has not committed a trade mark infringement by allowing advertisers to select, in AdWords, keywords corresponding to trade marks.

The Advocate General further recalls that trade mark rights cannot be construed as classical property rights enabling the trade mark owner to exclude any other use. Accordingly, internet users’ access to information concerning the trade mark should not be limited to or by the trade mark owner even if it involves a trade mark which has a reputation.

Advocate General’s opinions are not binding on the ECJ, though the Court follws them in about 80% of all cases.

In my personal view this Advocate General’s opinion is very problematic for trade mark proprietors as, given a coresponding judgment of the Court, it will weaken proprietors’ position and ease springboard marketers and imitators to exploit the goodwill and reputation arising out of the trade marks in question.