ECJ rules for Google’s AdWords scheme in Google v. Louis Vuitton
In a Judgment of the European Court of Justice (ECJ), Google has won in the latest episode of its legal confrontation with Louis Vuitton. The ECJ ruled that Google does not breach companies’ rights by allowing online advertisers to buy key search words.
The ECJ ruled that allowing third parties to buy brand names as key advertising words, which link to their online stores, did not violate luxury goods trademarks, owned by the likes of LVMH, owner of the Louis Vuitton brand. Nevertheless, Google can still be sued in a French court, which could pave the way for large damages claims.
Paid ads appearing on the right of regular search results are an integral part of Google’s business model. Google does not disclose sales figures from the paid adverts, but it makes 97 per cent of its $24 billion annual revenue from advertising. The paid adverts (branded as ‘AdWords’) allow customers to buy their rivals’ trademarks as keywords.
A site selling fake Louis Vuitton handbags could turn up if a user types ”Louis Vuitton handbags” in Google and follows the links appearing under the “sponsored links” section in the results screen. Brand owners have been fighting to extinguish this method as they claim it waters down their brands and undermines exclusivity.
Today’s verdict did offer some relief to manufacturers of luxury goods, after the court said that advertisers could not use the Adwords system to create adverts that would make it unclear whether the advertiser was the genuine brand owner or a separate business.
Harjinder Obhi, Google’s senior lawyer, said that “Trademark rights are not absolute. Ultimately, they want to be able to exercise greater control over the information available to users.” The case will return to France’s national court for the final say.
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