In a case that could have a significant impact
on search marketing worldwide, Europe's highest court has been asked to decide whether Google violates trademark law by allowing brand names to trigger pay-per-click ads.
The case
stems from a trademark infringement lawsuit filed in France by luxury goods maker Louis Vuitton against Google. The gist of the dispute, according to legal blog Out-law.com, is that Google's AdWords
platform allegedly prompted some marketers to bid on terms like "Louis Vuitton fakes." In other words, Google allegedly suggested to marketers that they pay to appear as links when users typed terms
like "Louis Vuitton fakes" into the query box.
A court in France ruled that Google violated trademark law, but the search company appealed. The case is now before the European Court of Justice in
Luxembourg. A Google spokesman said Louis Vuitton's claims are without merit and the company will "defend vigorously against them."
Google has faced several U.S. lawsuits about whether its
AdWords platform violates U.S. trademark law, although those cases do not have the added wrinkle of marketers apparently advertising counterfeit goods.
The only case to go to trial in the U.S., a
lawsuit by insurance giant Geico, resulted in a win for Google on the crucial issue. There, federal district court judge Leonie M. Brinkema in Virginia found that Google did not violate Geico's
trademark by allowing the term "Geico" to trigger pay-per-click ads by Geico competitors. She ruled that there was no proof that consumers were confused by such ads, so she dismissed the bulk of
Geico's complaint.
But that ruling hasn't discouraged other companies from suing. For instance, American Airlines last year filed a similar lawsuit against Google.
A federal appeals court
is currently considering a related issue in a lawsuit brought by Rescuecom against Google. There, a trial judge dismissed the case on the theory that using a company name to trigger a search ad isn't
the type of "use in commerce" that's covered under trademark law, but Rescuecom appealed. The Second Circuit Court of Appeals heard argument on the case in April, but has not issued a decision yet.