Legal and search experts give their views on the implications of recent legal decisions

The case of Google versus Louis Vuitton was last week decided by the European Court of Justice.

It concerned the manner in which Google sell keywords, or ‘AdWords,’ as links to websites. Google allows advertisers to select keywords. When the keyword is subsequently entered by a user of Google, the advertiser’s website will appear as a ‘sponsored link’ at the top of the search results. If a user subsequently clicks on that sponsored link, a fee is payable by the advertiser to Google.

The advertiser can improve its ranking by paying more for the use of the keyword. Louis Vuitton complained that third parties were paying for keywords that were trademarks of Louis Vuitton. Furthermore, an advertiser could ‘buy’ the right to use such a keyword in combination with the word ‘copy’ or ‘imitation’ in order to be directed to a website that was selling counterfeit goods. Louis Vuitton complained to a French court that Google was infringing its trademarks.

No trademark keyword protection

The European Court of Justice judgment in this case essentially decided that Louis Vuitton can prevent use of its trademark as a keyword, without the consent of Louis Vuitton. It also ruled that Louis Vuitton cannot directly prevent use of its trademark as a keyword by Google unless Google has “played an active role of such a kind as to give [Google] knowledge of, or control over, the data stored”. 

While the first of these seems clear, the second is not. It begs, among others, the questions “how much knowledge?” and “how much control?” according to Dai Davis, partner at law firm Brooke North.

A similar case, from the English court is due to come before the European Court later this year. That is the case of Interflora versus Marks and Spencer and Flowers Direct, in which Google allowed the keyword (and trademark) ‘Interflora,’ a trademark of Interflora to be used by the defendants, Marks and Spencer and Flowers Direct. Interflora complained of Google’s practice of allowing others, in this case Marks and Spencer and Flowers Direct, to ‘buy’ the sponsorship so that the user was directed to the websites of Marks and Spencer or Flowers Direct, rather than to Interflora’s website.

On the basis of this decision in the Louis Vuitton case, it would seem likely that Interflora will be able to prevent this use by Marks and Spencer and Flowers Direct, he commented. 

Matter far from finally decided

As to whether Google will need to change its practices, it is likely that the full story has yet to develop. There will undoubtedly need to be further references to the European Court, before the matter is fully determined.

Davis said: “Google and eBay benefit where a user is confused into buying counterfeit goods on the internet, believing them to be genuine goods. This case is the first nail, but only the first nail, in the coffin of that practice. The only thing that can be said with absolute certainty after today’s unclear judgement is that there is more litigation to come.” 

Martin Dinham, sales director at search engine marketing firm Guava, added: “The area of companies bidding through Google Adwords on competitors brand names is a contentious one that has been brought back into focus by the pursuit of Marks and Spencer by Interflora for appearing in Google searches for ‘Interflora’.

Best and worst practices emerge 

“The case is similar to a recent one initiated by Louis Vuitton in Europe against Google for permitting its retailers to bid against its brand, a case that Louis Vuitton lost. The latest case is different in the Interflora are not suing Google – they are taking action against Marks and Spencer for including their brand name in their campaign keyphrase list.

"As a search marketer though, I am qualified to venture the opinion that this type of strategy is unlikely to successful from a return on investment perspective, regardless of the moral or ethical standpoint of such tactics. Search engine users typing brand related searches are typically ready to buy, one of the main attractions of PPC [pay-per-click]. Serving up a "Toshiba TV" advert to a user looking for "Samsung TV" related keyphrases is unlikely to convert to a sale therefore. I'd also question the compatibility of this type of strategy with the brand profile of someone like Marks and Spencer. Certainly, this isn't a strategy that we would recommend to our clients at Guava."