Legal proceedings have been initiated in France against Google by a number of trademark owners, including Louis Vuitton Malletier, as to the legality of the use, in the Adwords advertising system, of keywords corresponding to trademarks, which can lead to the display of ads for sites offering counterfeit versions of the products covered by the trademark or identical or similar products of competitors.

The Cour de cassation in France has asked the Court of Justice whether Google has committed a trademark infringement by making available such keywords to advertisers and if the company can be held liable for the content featured in AdWords.

In a favourable opinion for Google, the Advocate General noted that the use of the trademarks is limited to the selection of keywords which is internal to AdWords and concerns only Google and the advertisers. Therefore, when selecting keywords, there is no product or service sold to the general public. "Such a use cannot therefore be considered as being a use made in relation to goods or services identical or similar to those covered by the trademarks," stated a summary of Poiares Maduro's opinion "Similarly, advertisers themselves do not commit a trademark infringement by selecting in Adwords keywords corresponding to trademarks."

While Google, by displaying ads in response to keywords corresponding to trademarks, establishes a link between those keywords and the sites advertised which sell products identical or similar to those covered by the trademarks, the Advocate General, whose opinion is not binding on the full Court of Justice, finds that such a link also "does not constitute a trademark infringement."

"In effect, the mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services," the summary of the opinion stated. "Internet users are aware that not only the site of the trademark owner will appear as a result of a search in Google's search engine and sometimes they may not even be looking for that site. These users will only make an assessment as to the origin of the goods or services advertised on the basis of the content of the ad and by visiting the advertised sites; no assessment will be based solely on the fact that the ads are displayed following the entry of keywords corresponding to trademarks."

Poiares Maduro argued that, because trademark rights cannot be construed as classical property rights enabling the trademark owner to exclude any other use, internet users' access to information concerning the trademark should not be limited to or by the trademark owner even if it involves a trademark which has a reputation. Many of the sites reached by internet users by entering keywords are "perfectly legitimate and lawful" even if they are not the sites of the trademark owner, the opinion noted.

The Advocate General also rejects the notion that Google's actual or potential contribution to a trademark infringement by a third party should constitute an infringement in itself. Trademark owners would have to point to specific instances giving rise to Google’s liability in the context of illegal damage to their trademarks, he noted.

However, while Poiares Maduro observed that Google's search engine itself is a "neutral information vehicle applying objective criteria in order to generate the most relevant sites to the keywords entered," the same cannot be said for its Adwords where Google has a "direct pecuniary interest in internet users clicking on the ads' links" and which places the results at the top of the list of search results, or in another more visible location on the search results page.

According to law firm Field Fisher Waterhouse, which has offices in the UK, France, Belgium and Germany, this is the first indication of the ECJ's attitude towards keyword searches and the AG's opinion shows that he was "strongly influenced" by the potential impact this case could have on the future use of Internet search engines.

"If this opinion is followed by the judges in the European Court of Justice, trademark owners will not be able to police their trademarks simply by preventing third parties from using their trademarks as keywords," the firm noted. "Instead they will have the task of continually monitoring sponsored results produced by search engines to ensure that the wording of advertisements and the websites to which they link do not infringe their trademark rights."

However, FFW observed that Poiares Maduro's view that Google’s AdWord service cannot be protected as a hosting service could be of concern to the search engine. "Without this defence, Google might be held liable for infringing or illegal content in its sponsored listings although this will be subject to interpretation by the national courts," the firm noted.

In another similar case which was decided recently, a French court sided with French luxury perfume and cosmetic firm LVMH in a case against internet auction site eBay, which allowed keywords for some of LVMH's products to appear in advertisements. EBay was ordered to pay EUR80,000 in damages.