By Stefanie Olsen
Monday, February 07 2005 10:28 AM
URL: http://www.zdnetasia.com/news/business/0,39044229,39216545,00.htm

A French court on Friday ruled against Google in a trademark infringement case brought by Louis Vuitton Malletier, in the latest legal setback to the search giant overseas.

The Paris District Court has sanctioned Google and its French subsidiary from selling search-related advertisements against trademarks owned by the luxury fashion designer, which sued the search giant in early 2004. The court charged Google with trademark counterfeiting, unfair competition and misleading advertising. Google was ordered to pay US$257,430 (200,000 euros).

The ruling comes on the heels of another French court order against Google, in a case brought by European chain Le Meridien Hotels and Resorts. In that lawsuit, the court said Google infringed on Le Meridien's trademarks by allowing the hotel chain's rivals to bid on keywords of its name and then appear prominently in those related search results.

Both lawsuits have hinged on Google's signature keyword-advertising system, Adwords, which pairs text ads with related search results. For example, a Nike ad appears after a search for running shoes. Through the system, Google allows marketers to bid for such search-related keywords, including common branded and trademarked terms.

The negative rulings could hamper the company's advertising practices--at least in Western Europe, where the courts have been favorable to trademark owners. Google derives the lion's share of its revenue from online advertising.

Louis Vuitton applauded the ruling, highlighting the danger that some sponsored search results tied to its name can promote counterfeits. "It was absolutely unthinkable that a company like Google be authorized, in the scope of its advertising business, to sell the Louis Vuitton trademark to third parties, specifically to Web sites selling counterfeits," a company representative said in a statement via e-mail.

"This milestone ruling grants protection for the first time to both consumers and brand owners by finding that Google's Adwords and Premium Sponsorship services as misleading advertising services," the representative added.

Google spokesman Steve Langdon said the company has not yet received a copy of the ruling. When it does, he said, the search giant will consider its options, including appealing the decision. Google is appealing the ruling regarding Le Meridien.

In the United States, the company recently won a favorable ruling in a similar case brought by Geico, the car insurance company. In December, a judge in Virginia ruled that as a matter of law, Google's use of Geico trademarks to trigger ads did not constitute trademark infringement and that Geico had not sufficiently proven its case.

Google still faces other copyright disputes, including one brought by American Blind and Wallpaper Factory.