Ruling Against Google Could Bring Dire Consequences

The ruling in a Paris court that Google had carried out trademark counterfeiting, unfair competition and misleading advertising conflicts with a December decision favoring Google and could put the company in "an extremely difficult situation."

A recent decision against Google Inc. in a French court is a reminder that conflicts over jurisdiction and how trademarks are protected online are likely to get worse before they get better, according to legal analysts.

On Feb. 4 the Paris lower court (Tribunal de Grande Instance) imposed a 200,000-euro fine and sanctioned and from selling search-related advertisements against terms such as "Louis Vuitton," "Vuitton" or "LV." The court said Google had carried out trademark counterfeiting, unfair competition and misleading advertising.

Google said on Friday it is still considering whether it will lodge an appeal. "We believe the Paris courts ruling is deeply flawed, and we will continue to defend ourselves vigorously," a company spokeswoman said.

The case is significant because, while its broadly in line with previous decisions in Europe and the United States it conflicts with a December decision that favored Google over a trademark holder.

In mid-December, a federal judge dismissed the major claim in a lawsuit by the Government Employees Insurance Co. GEICO had accused Google of undermining its trademark and confusing consumers by allowing GEICO competitors to bid on the insurers trademark to return the sponsored links that appear alongside Web search results.

/zimages/3/28571.gifRead more here about Googles win in the GEICO lawsuit.

The U.S. court ruled that there was no likelihood of confusion because users would recognize the sites in question were not affiliated with GEICO. On another claim, however—involving the issue of trademarked terms within the ads themselves—the judge asked both parties to work on a settlement.

The Vuitton case and an earlier preliminary decision involving the hotel chain Le Meridien go the other way. "In GEICO, the judge ruled that the use of trademarks as keywords to trigger ads was not trademark infringement. This is the exact opposite of the French decisions," said Olivier Hugot, an attorney with Paris-based law firm Hugot Avocat, which specializes in IT and intellectual property issues.

The conflicting GEICO, Vuitton and Le Meridien cases may put Google in the position of being able to legally sell keywords such as "Vuitton" in the United States, but be legally liable in France for the same action, Hugot said: "If the GEICO and Vuitton rulings are confirmed, Google is going to be in an extremely difficult situation."

At stake are the advertising systems with which Google and other search engines, such as Yahoo Inc.s Overture, generate most of their revenues. Googles AdWords allows advertisers to link their advertisements against search keywords, including words that are the registered trademarks of competitors.

Next Page: Earlier cases.