Google gets French lesson in trademarks

A French court has ruled that Google must refrain from using the trademarks of European resort chain Le Meridian Hotels and Resorts to trigger keyword ads.

On 16 December, a Nanterre court in France ruled that Google infringed on the trademarks of Le Meridien by allowing the hotel chain's rivals to bid on keywords of its name and appear prominently in related search results. Le Meridien had sued Google's French subsidiary on 25 October after failing to reach an amicable agreement, according to court documents.

In a blow to Google's keyword-bidding engine, the French court ordered the company to stop linking ads to Le Meridien-trademarked terms by Monday or face a daily fine of $194 (€150). The company must also cease linking ads related to Le Meridien brands within 72 hours of whenever Le Meridien notifies it of listings in violation, or face a daily fine of €150. Finally, Google must pay all court fees and a fine of €2,000.

A representative of Google said the company will appeal the decision. "We will continue to defend against this suit, which we believe is without merit," the representative said. The decision casts a shadow on Google's billion-dollar money engine, keyword-based advertising, and potentially on the company's financial prospects in Europe.

The company makes about 98 per cent of its revenue from keyword advertising linked to search technology, and many such ads are tied to branded or trademarked names of products and services. The technique has been effective because Web search is one of the primary ways that people find products and services.

But as the company has grown precipitously and has planted seeds of expansion in markets around the world, more companies have sought control over their brand names and trademarked terms in paid search.

In Europe, some courts have been favourable to trademark owners. Louis Vuitton sued Google and its French subsidiary for similar alleged trademark infringement, and a French court ordered Google to cease the practice and pay a fine.

In the United States, however, the company recently won a favourable ruling in a 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 proven its case for dilution sufficiently. Google still faces other copyright disputes, including one brought by American Blind and Wallpaper Factory.

Stefanie Olsen writes for CNET News.com.