European lawmakers have cleared the way for advertisers to buy search keywords trademarked by rivals.
The European Court of Justice has ruled in favour of Google saying it “has not infringed trademark law” following a dispute with luxury brand Moét Hennessey Louis Vuitton (LVMH).
LVMH claimed Google’s AdWords service undermines brands and breaches European trademark law by allowing rival advertisers to purchase trademarked keywords. It said searches for trademarked brands could bring up ads for rival and counterfeit goods.
Legal and marketing experts see the ruling as potentially damaging for brands. Fiona McBride, trademark attorney at Withers & Rogers LLP, says the ruling is “a blow for brand owners and a victory for Google”.
ISBA media and advertising director Bob Wootton adds: “This ruling means that the door remains wide open for imitators and marketers of grey goods to portray themselves as the real deal to consumers.”
However, Andy Millmore, head of litigation at media law firm Harbottle &; Lewis, says the decision “has not all gone Google’s way, and contains some positive news for brands”.
The ruling states that if an ad causes confusion about the origin of the product then a trademark has been infringed.
Millmore says this “has made it easier for brand owners to sue the companies that bid on their words, which is likely to make it less attractive to bid on famous brands and should mean that prices of many AdWords, and the revenues from them, drop,” he says.
Lucy Harrold, partner in the intellectual property team at law firm Stephenson Harwood, adds: “It offers something for everyone. Google gets to keep selling key words without significant legal liability, and brand owners get to object to advertisements which are not clear about who is advertising.”
Google’s intellectual property lawyer Dr Harjinder S Obhi, says the ruling is important because it “is a fundamental principle behind the free flow of information over the internet” but adds that Google has “strict policies that forbid the advertising of counterfeit goods”.