LVMH Moet Hennessy Louis Vuitton have lost their court action against Google alleging Google’s practice of selling keywords such as ‘Vuitton’ to advertisers constitutes trade mark infringement.
The basis for LVMH’s argument was that when internet consumers search for luxury branded products through Google, search results were displayed competing or counterfeit products.
LVMH had argued that Google Adwords encouraged consumers to purchase counterfeit or grey market goods, causing them to suffer a loss of revenue and dilution to their trade marks.
In Google and Louis Vuitton Malletier SA, on appeal from a 2008 decision of a French Court, the European Court held that Google’s paid internet referencing service, known as AdWords, didn’t violate trade mark law.
The Vuitton Group, which markets mainly luxury goods including hand bags and other leather goods is the registered owner of the community trade mark Vuitton, Louis Vuitton and LV. Their contention was that when internet searchers entered search queries comprising their trade marks into Google’s search engines, this would yield results under the ‘sponsored links’ section to websites offering counterfeits of Vuitton products.
Two French Courts had earlier agreed with Vuitton that the offering of Vuitton’s trade marks to advertisers constituted trade mark infringement.
Other similar case brought by Viaticum, Luteciel and CNRRH alleging violation of trade marks owned by them in a similar manner were also referred to the European Court of Justice for a ruling as to the legality of Google’s practices.
All of the above disputes had also arisen as a result of the use of the above companies’ trade marks as keywords in Google’s AdWord program, without their consent having been given as the proprietors of those trade marks.
The Court considered what the function of a trade mark is, namely to denote the identity of the origin of trade marked goods to the consumer or end user of the internet by enabling them to distinguish them from goods which have an alternative origin.
The Court reasoned that the question whether a proprietor’s trade mark is adversely affected when internet users are shown third party competitor’s ads depends in particular on the manner in which that ad is presented. As long the advertisements enable internet users to discern where the goods referred to in the ad originate from, and don’t create confusion in the minds of consumers in terms of their origin, they cannot be said to adversely affect the trade mark owner’s rights.
The Court concluded that Google, as an internet referencing service, could not be held liable for the data it has stored at the request of an advertiser participating in the purchase of adwords unless they have obtained some knowledge of the illegal nature of either the data or the advertiser’s activities and fail to remove the data in a timely manner.
In a case brought by LVMH against ebay, a French Court had ordered ebay to pay LVMH damages in the sum of $275,000 for paying search engines to direct customers to products which were counterfeits of LVMH products. The Court’s finding in the ebay case was based on the court’s conclusion that ebay had knowingly registered similar names to Louis Vuitton, with the knowledge that customers in search of counterfeit products would look for them and be led to ebay auctions selling the counterfeits.