Google AdWords Gets Legal Green Light From E.U. for Trademark Keywords

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The European Union has, for once, passed a legal ruling in Google's favor. The case centers around Google's use of trademarks as keywords in its adwords system, which is now legally sanctioned. But the lawyers for Louis Vuitton and other brands are still circling.

Google's blog explains what happened--since its from Google's viewpoint it stresses the positives in the situation, but digging through the text it's pretty clear that Google sees this legal case as pivotal for the future of free and open Internet advertising. "The question before the court was whether advertisers should be allowed to choose keywords freely when reaching out to users on the Internet. In other words, if advertisers are allowed to show advertisements when another company's brand name is entered as a search query," it begins. This is precisely how AdWords works, of course, and from a user standpoint it makes sense--if you type in a brand of car, the results you want to see may well include service centers for the vehicles, or if you're searching for a brand of clothing you're likely to be looking for a store that sells it rather than the actual brand's website.

But that's the simplest interpretation, and the legal tussle centered on a technicality: AdWords works through a bidding system, so competitors can bid to have their ads show up when the competing brand name is searched for. To demonstrate this point, the U.K.'s Conservative Party bid for the phrase "Gordon Brown" over the weekend, and thus got their political messages broadcast by people searching for Labour Party information. One of the plaintiffs in the case against Google was Louis Vuitton, which alleged that competitors, selling faked Vuitton goods were "hijacking" the Vuitton trademark to hawk their counterfeit items. Furthermore, if there's a bidding war, it can become expensive for brands to defend their brand in the AdWords system, and the only real winner of this is Google.

Yet the European court has in fact found in Google's favor, noting that it's not an infringement of trade marks for Google to use them in its system, and the E.U. law that protects Net hosting services also applies to Google. The plaintiffs will, inevitably, work out the next legal maneuver to make--but Google's already moving to claim the higher ground, noting that, "This is important because it is a fundamental principle behind the free flow of information over the Internet. Our guiding principle has always been that advertising should benefit users, and our aim is to ensure that ads are relevant and useful."

In other words, Google's trying to deliver up useful info to the Net public, but the brands are aggressively trying to restrain Net freedoms by mis-applying trademark regulation.

[Via Googleblog, BrandChannel, BBC]

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