Google Avoids Liability for Trademark Adwords

Once again, Google has dodged a bullet. On March 23, 2010, the Court of Justice of the European Union (ECJ) held that Google is not liable for trademark infringement, when it sells trademarks owned by third parties as part of its Google Adwords program.

Google sells Adwords to the highest bidders, who then use the Adwords as keywords within their web pages. This allows the website owners to increase the exposure of their web pages to Internet search engines. Generally, such increased exposure to the web crawlers results in the web pages containing the Adwords ranking higher in Internet searches conducted with the Adwords. This increases the likelihood that the buyer's web pages will appear near the top of the list, when a search including the Adword is conducted.

One big problem with Google's Adwords program has been that Google is selling the registered trademarks of third parties as Adwords, often to the competitors of the trademark owners. This also increases the cost of the Adwords to their trademark owners, when they are able to secure their own marks as Adwords. In numerous lawsuits that have made headlines over the past year, the trademark owners have been fighting back, asserting that Google's sale of their trademarks as Adwords constitutes trademark infringement. Google has defended the suits, routinely claiming that its use of the Adwords is a bona fide use in commerce, as opposed to use as a trademark to identify the source of goods or services. In the closely watched French case that was decided by the ECJ, the Court sided with Google and held that Google is not liable for trademark infringement, when it sells the Adwords.

However, the law in most countries is clear that buying the trademarks of a competitor and using them as keywords does constitute trademark infringement. Therefore, although Google cannot be held liable for contributory trademark infringement, the buyers of the Adwords who use them in their web pages can be held liable.

This case illustrates the importance of registering your trademarks and having a strong trademark monitoring program in place. Although Google cannot be forced to stop selling the trademarks of others as Adwords, the trademark owners can seek a remedy from their competitors, who buy and use the Adwords on their web pages. Therefore, if your company discovers that its trademark has been hi-jacked in this manner, you should have trademark counsel contact the purchasers directly to enforce your rights.

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