Tuesday, March 23, 2010
Paid ads are the backbone of the Online business model. While Google, the world's largest search engine, does not detail sales from its paid ads, it makes 97 percent of its annual revenue of nearly $24 billion from advertising.
Google's AdWords platform has been often put against trademark rights and not alongside them for the reason of deliberate "liberalization" of online consumers's choice: each time a consumer searches for a certain company's name on Google's search platform - he may first stumble upon competitors' offers, who have placed higher bids for precisely these keywords!
Louis Vuitton has fiercely argued that it alone should be able to control ads related to its brand.
The luxury goods group had already won a French court action in 2005, which resulted in Google being barred from using Louis Vuitton's trademarks in its advertising on all websites accessible in France.
Louis Vuitton complained that some of the links which appear during a "Louis Vuitton" search are for companies marketing counterfeit or replica goods.
In June 2006 Google appealed to the French Court of Appeal in Paris, which upheld the original judgement and increased damages awarded to Louis Vuitton from €200,000 to €300,000 (BrandRepublic)
In a statement, Google said at the time: "We have a trademark policy, which prevents bids on other people's registered trademarks, and we do not allow people to advertise with AdWords for counterfeit products."
Curiously enough - in June 2008, a French court ordered auction site eBay to pay £30 million to Louis Vuitton for allowing online auctions of fake copies (235 000 pieces!) of its goods.
As a second side of the coin - David Wood, the legal counsel for ICOMP (Initiative for a Competitive Online Marketplace), explained that it's all about whether Google can continue its policy of allowing advertisers who are not the owners of trademarks to buy up those trademarks under the AdWords programme."
Today however, the European Court of Justice ruled on Tuesday concluded that "Google has not infringed trademark law by allowing advertisers to purchase keywords corresponding to their competitors' trademarks."
What do you think? Even though clearly AdWords is the major profit platform for Google - is it also the symbol of "online freedom of choise" or just an other Internet must-do side effect?
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