E.U. Confirms Google's AdWords Does not Breach Trademark Law

In a ruling made yesterday, the European Court of Justice (ECJ) confirmed that Google’s AdWord’s advertising product does not break European trademark laws by allowing its advertiser clients to bid on trademarked keywords.

Back in March, the same court rejected a case brought by luxury goods firm LVMH group, Moet Hennessy Louis Vuitton, which argued Google should prevent the sale of its trademarked brand names as ad keywords. Yesterday’s ruling upholds that precedent, but relates to a case involving two vendors of temporary buildings, Primakabin and Portakabin.

Using Google’s AdWords system, Primakabin purchased keywords including “portakabin,” and misspelled variants such as “portacabin,” to drive users to its own site when they searched for its competitor. According to Portakabin, that action was an infringement of its trademark, but its argument was ultimately dismissed by the ECJ which ruled that “a trade mark proprietor is not entitled to prohibit an advertiser from advertising – on the basis of a sign identical with, or similar to, that trade mark, which that advertiser chose as a keyword for an internet referencing service without the consent of that proprietor.”

The court said there were exceptions, however, such as instances in which advertisers create the impression they are “economically linked” with the trademark owner.

Following the LVMH Group case, Google’s Dr. Harjinder S. Obhi, senior litigation counsel, EMEA, argued in a blog post that “user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts.” He suggested that a user searching for information about a particular car, for example, would likely want more information than just that car manufacturer’s website. “They might be looking for different dealers that sell that car, second hand cars, reviews about the car or looking for information about other cars in the same category,” he wrote.

The ECJ rulings therefore appear to have officially cleared the way for European advertisers to begin bidding on their competitors’ trademarks and brand names in all industry verticals. That news will be welcomed by Google, which will preserve revenues generated from competitive bidding on such keywords.