On Tuesday, March 23, 2010, the European Court of Justice (ECJ), the European Union’s top judicial body, issued its long-awaited opinion on whether Google’s Adwords program infringes trademark owners’ rights. Through its Adwords program, Google sells
keyword phrases, often consisting of trademarks, to advertisers, who are sometimes competitors of the trademark owners.
When a user searches for the phrase via Google’s search engine, an advertisement for the competitor will appear on the search results page. In the instant case, Google sold the keyword phrase consisting of the trademark “Louis Vuitton” to a counterfeiter of trademark owner Louis Vuitton’s goods. In its opinion, the ECJ found that Google’s Adwords program did not constitute an actionable “use” of the Plaintiff Louis Vuitton’s trademark, thus relieving Google of liability. Facially, the decision appears to be a major victory for Google. However, the ECJ made clear that liability could attach to advertisers who purchase competitors’ trademarks as keywords. As such, even where Google will have a legitimate defense going forward, its advertisers will not, which could have a chilling effect on Google’s Adwords business.
Technology & Marketing Law Blog