European Parliament demands change to keyword rules

Out-Law News | 17 Dec 2010 | 4:11 pm | 1 min. read

The European Parliament has called for companies such as Google to be prevented from selling the right to advertise when other companies' trade marks are entered into search engines.

Brand owners have taken court cases across Europe against Google and competitors over its AdWords system. One company can ensure its adverts are displayed near the search results triggered by a competitor's name if they successfully bid on that name as a 'keyword'.

Courts in France have ruled that the practice infringes trade mark rights. But in a case involving Louis Vuitton Moet Hennessy (LVMH), the European Court of Justice (ECJ) ruled in August that trade mark rights are only infringed by ads that cause confusion about the identity of the advertiser.

The adoption of the Resolution comes weeks after the publication of a Parliament report recommending the move. The Resolution said that companies such as Google should be stopped from accepting keyword ads without trade mark holders' permission.

"[The Commission should] modify the limited liability regime for information society services in order to make the sale by search engines of registered brand names as advertising keywords subject to prior authorisation from the owner of the brand name in question," it said.

Google changed its policy in September to allow keyword bidding on rivals' trade marks across Europe.

"We defended our position in a series of court cases that eventually made their way up to the European Court of Justice, which earlier this year largely upheld our position," said Google product manager Dan Stokeley at the time. "The ECJ ruled that Google has not infringed trade mark law by allowing advertisers to bid for keywords corresponding to third party trade marks. Additionally, the court ruled that advertisers can legitimately use a third party trademark as a keyword to trigger their ads."