An adviser to Europe's top court on Tuesday backed US Internet giant Google in a row with French luxury product maker LMVH over online advertising.
"Google has not infringed trade mark rights by allowing advertisers to buy keywords corresponding to registered trademarks," Advocate General Poiares Maduro said in an opinion that is influential but not binding on Europe's courts.
The case concerns Google's lucrative practice of accepting money from a clothes retailer, for example, to ensure their company appears among Internet search results when a particular designer brand is keyed in.
This happens through Google's "AdWords" system that allows advertisers to buy keywords corresponding to registered trademarks.
The advertiser's often less well-known name will appear along with the known brands they have piggy-backed under the heading "sponsored links," and that is where the likes of LVMH (Moet Hennessy Louis Vuitton) have cried foul.
The advocate general said there was no trade mark infringement as "the use of the trade marks is limited to the selection of keywords which is internal to AdWords and concerns only Google and the advertisers."
However, the court adviser added, Google may be liable for featuring content in its AdWords programme that directly violates trademarks.
For example, Google could be held liable if a sponsored link pops up selling fake Rolex watches.
Senior Google lawyer Harjinder Obhi noted the advocate general's opinion "with interest" and said the company was now awaiting the European Court of Justice ruling in a few months' time.
"We believe that selecting a keyword to trigger the display of an ad does not amount to trademark infringement, and that consumers benefit from seeing more relevant information rather than less," he said in a statement.
"We also believe that consumers are smart and are not confused when they see a variety of ads displayed in response to their search queries," he added.
Google is before the European Court of Justice in connection with a French case where a number of companies including Louis Vuitton complained that Google had infringed their trademark rights.
The French court hearing the case, the Cour de Cassation, has asked the European Court to rule on whether trademark owners can prevent Google from selling the right to use their trademarks as keywords.
The advocate general's opinion is not binding but is usually followed by European courts.
(c) 2009 AFP
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