A decision is expected by June 2010 from the European Court of Justice (ECJ) stemming from the French Supreme Court regarding the use of sponsored keywords in the Louis Vuitton v. Google France case. The question submitted for review was whether Community trade mark law should allow a trade mark proprietor to prevent its trade marks from being sold by search engine providers (such as Google) to third party competitors to be used as sponsored keywords.
The Google AdWords system charges advertisers only when viewers click on their ads which appear based on keywords users search for. In the U.S., there are no restrictions on which keywords an advertiser can list in its contract with Google, therefore companies bid extraordinary amounts for the right for their ads to be displayed when particular search terms are entered.
Surprisingly, until last year Google barred the use of trade marks as keywords outside of the U.S. In April 2008, Google reversed that policy for the UK and Ireland, allowing keywords and search terms to be bid on by anybody, even if they were trade marks. This change of policy resulted from a UK High Court decision in Wilson v Yahoo! In which it was decided that use of the trade mark in this manner by a third party was not an act of trade mark infringement by Google.
Just this past December Interflora brought a claim against Marks & Spencer and Flowers Direct for trade mark infringement in the High Court for use of the word “Interflora” as a sponsored keyword. This case is still pending and consequently, the position in the UK remains uncertain.
While the Luis Vuitton case is still pending at the ECJ, a lower French court has ordered Google to pay a total of 350,000 Euros to two companies for trade mark infringement for the use of their trade marks as a sponsored link. Google has already appealed the case to the Paris Court of Appeal and given the pending Luis Vuitton reference to the ECJ, the result of which is highly anticipated, this case will probably have a long while to go before resolution.