The advisers legal opinion will now be studied by judges at the European Court of Justice, which has been asked to tell a French appeals court how to apply EU trademark law in a dispute between Google and several French luxury goods companies over the Internet search engines ad system.
Advocate General Miguel Poiares Maduro did not give Google a complete all-clear, warning that it could be held liable if brand owners could show that Googles ads had damaged their trademarks.
He rejected Googles argument that the Internet advertising system is a neutral platform that would exempt the company from similar legal action in the future, given Googles financial interest in getting users to click on ad links.
Louis Vuitton said that may pave “the way for different national jurisdictions to find Google liable as this process continues,” warning that it had already won numerous cases in its campaign against the sale of counterfeit goods.
Although Maduros recommendation is nonbinding, legal adviser opinions are followed by the court in about 80 percent of cases.
Google, the worlds most popular search engine, makes most of its revenue by selling advertising triggered by keywords. When someone searches for “vintage cars” or visits a partner site that mentions those words, advertising for a vintage car dealer may appear to the side. In some cases, a keyword that is a companys brand name can trigger an ad for a competitor or even counterfeiters.
The French companies – including LVMH Moet Hennessy Louis Vuitton – complain that Google broke the law by accepting ads using a brand name without permission. They fear that would allow counterfeiters to buy a keyword such as “Louis Vuitton” and use it to sell fake bags.
Google has been repeatedly sued for trademark violations in courts around the world, and it generally prevails or settles cases without changing its practices. In the United States and most other countries, Google typically accepts trademarks used as those keyword triggers, but it places limits on what can appear in ads themselves.
But in many European countries, including France, Italy and the Netherlands, Google does restrict the use of trademarks as keywords. It will typically strike ads, however, only after receiving a complaint from the trademark owner and conducting a review.
The EU court adviser said neither Google nor advertisers are at fault for initially placing or accepting an ad using a brand keyword. Google isnt to blame either for displaying the keyword ads because Maduro said a keyword linking to a site isnt likely to lead customers into mistaking a brand name item for a counterfeit.
But users are likely to make decisions when they see the content of the ad or visit the advertised sites – and the adviser warns that Google may be held liable for the ad content.
That could potentially lead to Google facing legal action in national courts if brand owners could prove that such an ad damaged sales of genuine goods.
Googles senior litigation counsel for Europe, Harjinder Obhi, said the company also believes that “consumers are smart and are not confused when they see a variety of ads displayed in response to their search queries.”
The EUs Luxembourg-based high court expected to rule on the case in the coming months.