Updated: European Court of Justice: Google NOT liable for keyword trademark infringement but others maybe

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Updated: Sorry for the confusion but we’d been given conflicting information (see here, for example) relating to this story. After a back and forth, here’s our understanding of the ruling.

Keyword advertising using the trademark of others without their permission is illegal and services providers such as Google are also liable for any infringement.

Google and other advertising providers aren’t liable for keyword trademark infringement in most circumstances, and the search giant says this upholds one of the key principles of the Internet, that of safe harbour.

That’s the ruling given today by the The Grand Chamber of the European Court of Justice (ECJ), in a move that will likely shake up give much needed guidance to the search-based online advertising industry.

The fact that Google et al can no longer claim safe harbour in Europe is particularly significant as it now firmly places the burden of enforcement on service providers.

The case being settled, which now sets the precedent in Europe, is LVMH, the luxury goods company behind such brands as Dom Perignon, VS Google. The dispute had been referred to the European Court of Justice by The French Supreme Court (Cour de cassation) who asked the European court to decide on the rules governing trademark law online as well as the liability of providers of a paid referencing service – in this case Google.

“Google has not infringed trademark law by allowing advertisers to purchase keywords corresponding to their competitors’ trademarks,” said the European Court.

“Advertisers themselves, however, cannot, by using such keywords, arrange for Google to display ads which do not allow internet users easily to establish from which undertaking the goods or services covered by the ad in question originate,” added the ECJ.

In other words, advertisers if they blatantly mislead consumers through their use of keywords that use another company’s trademark will be liable – though it will still be on a case-by-case basis decided by local courts. The onus on service providers, such as Google, will be to remove such keyword ads, if it is shown that this is the case.

Commenting on the ruling, LVMH is obviously delighted. LVMH Senior Executive Vice-President, Pierre Godé, says:

“This decision represents a critical step towards the clarification of the rules governing online advertising, of which LVMH is one of the foremost clients. As the world’s leading luxury group, with more brands actively engaged with the Internet than any other luxury company, we are committed to working with all parties, including Google, to eradicate illicit online practices and to promote a framework that fosters the continued growth of the digital economy”.

Google has long claimed that advertisers using its service did not commit any illicit use of registered trademarks, and more importantly, as a service provider it was merely hosting the service and therefore could not be held liable.

With today’s ruling, an advertising service, including Google, can be found liable alongside the advertiser itself. Either because it was aware that the keywords being bought by the advertiser infringed a trademark or because it did not verify that the advertiser had the permission of the trademark owner to use the trademark.

  • LS
  • http://www.timtrice.com Tim

    @LS, I’d say so. Huge discrepancy between what Techcrunch is reporting and what other outlets are reporting.

  • googley

    I don’t think your article is right. For example,

    http://www.reuters.com/article/idUSTRE62M1NA20100323

    Who’s correct??

  • http://www.fructus-gmbh.de Christoph Kappes

    Nope.
    The court´s press release is the opposite!
    See
    http://curia.europa.eu/jcms/upload/docs/application/pdf/2010-03/cp100032en.pdf

  • Sam

    Argh, I hate legal d*ckheads who speak like quoted above…smart asses.

  • Jed

    I’ve seen some strange stuff on TechCrunch, but never a post that was 100% wrong.

    Seriously… the court’s own press release said the exact opposite thing! Might want to issue a correction ASAP.

    (The post-mortem as to how a post like this got written/published in the first place would be interesting.)

  • http://twitter.com/mikebutcher Mike Butcher

    Ha. Interesting. Yep, we got it wrong. Gotta love these European Court of Justice judgements.

  • http://searchengineland.com/google-wins-major-legal-battle-over-adwords-trademark-issue-in-europe-38628 Google Wins Major Legal Battle Over AdWords Trademark Issue In Europe

    […] Mysteriously TechCrunch is reporting the opposite outcome: Keyword advertising using the trademark of others without their permission […]

  • Chris

    wow Tech-crunch. you really missed the point this time around. Usually you do a great job, but this time……………why don’t you correct this?

  • Watty

    TechCrunch you are wrong.

  • http://www.twitter.com/cinemadrew Drew

    Not according to the BBC they arent liable.. according to them, they won!

    http://news.bbc.co.uk/2/hi/technology/8582404.stm

  • Steve O'Hear

    Sorry guys, we followed the story based on conflicting legal interpretation – which we’ve now had time to double check and update the post.

    This doesn’t happen often due to the speedy nature of the news cycle and massively misleading info, we got it wrong.

    As Mike says above, gotta love these European Court of Justice judgements.

  • http://coderslike.us/ David Kavanagh

    I thought Arrington was a lawyer?

    • Steve O'Hear

      I wrote the story, see the link added to start of the post and you’ll see why we got confused in a rush to get the story out. It was breaking at the time.

      • art vandelay

        dumb: took a PR release from one of the defending parties as your source
        dumber: put the link of the PR release as justification of why you got confused

        this is simply priceless.

      • Steve O'Hear

        I didn’t say it was our only source. Just one that’s published online. But thanks anyway.

  • Peter

    maybe this guy was right http://twitpic.com/1af8tv

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