ECJ May Limit Rights of Advertisers to Use Names of Rivals as Keywords

Google and other search engine providers offer advertisers the opportunity to purchase advertising keywords corresponding to trademarks, often those owned by their competitors. As a consequence, a user who types in a brand name may be directed to the website of a company that offers competing products.

One of the latest examples in a series of cases concerning search engine advertisement is the lawsuit by Interflora, the flower delivery service, against the British competing florist operation Marks & Spencer.

A search under the word “Interflora” on Google Britain revealed sponsored advertisements for three different websites, among them Marks & Spencer’s. In the eyes of Interflora this mislead customers.

In March 2010, the European Court of Justice in Luxembourg (ECJ) ruled in cases brought against Google France by Louis Vuitton Malletier and Viaticum that Google is not liable for selling advertising keywords based on brand names to competitors. However, this ruling may be not of any advantage for Google this time.

The advocate general, Niilo Jääskinen, declared that advertisers should be inhibited from buying rival trademarks as keywords if an average internet user is not (or only with difficulty) able to determine whether the goods or services referred to in the advertisement originate from the trademark owner or from a third party.

Although courts are not obligated by law to adopt the opinion of the advocate general, their opinion is generally followed.

Search advertisements on Google are one of the fastest-growing areas of marketing. The ads generate more than $20 billion a year. The ECJ decision could therefore have a negative effect on Google’s turnover.

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Reinhard von Hennigs