Google appeared to have won a partial victory in its long-running legal battle with trademark owners Tuesday, when a senior judge at the European Court of Justice said the company hasn't infringed anyone's trademark rights by allowing advertisers to buy search keywords corresponding to those trademarks.
Advocate general Poiares Maduro added, however, that Google may be liable for running advertisements that offer trademark-infringing products in its AdWords advertising service.
Judge Maduro was giving a non-binding legal opinion, as is customary, ahead of a ruling by the court expected early next year. In nearly all such cases the court follows the opinion of the advocate general.
At stake in the long-awaited case is Google's ad revenue-based business model and the ability of brand owners to protect their trademarks on the Internet.
Judge Maduro said that both Google's search engine and AdWords constitute information society services, which grants them an exemption to rules designed to protect companies' trademarks under the E.U.'s e-commerce directive.
To benefit from the exemption, Google must remain neutral about the information it carries, he added. And in what might turn out to be a nasty sting in the tail of the advocate general's opinion, Maduro said this might not be the case for AdWords.
"While the search engine is a neutral information vehicle applying objective criteria in order to generate the most relevant sites to the keywords entered, that is not the case with AdWords where Google has a direct pecuniary interest in Internet users clicking on the ads' links," he said, adding: "The liability exemption for hosts provided for in the E-Commerce Directive should not apply to the content featured in AdWords."
Google gave a guarded response to the opinion. "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," said Harjinder Obhi, Google's senior litigation counsel for Europe, the Middle East and Africa.
"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," Obhi added.
The European Court of Justice was asked by a court in France to intervene on the trademark issue that lay at the heart of a legal battle between Google and French luxury goods maker Louis Vuitton.
Louis Vuitton complained that when entered as a search term on Google, its trademark-protected brand name would trigger ads run by rival luxury goods companies as well as for companies selling counterfeit Louis Vuitton goods.
Louis Vuitton has argued that Google's "AdWords" service, established in the U.S. and now extended to Europe, allows advertisers to bid on terms like "Louis Vuitton fakes", and that the right to offer a trademarked name as part of a search advertising program breaches E.U. rules.