In a move that has sparked widespread controversy, particularly among luxury brand marketers, Google announced yesterday that, as of September 14, brand name keywords will be available for sale to any "legitimate" advertiser.
Brandchannel has been following this story since March. That's when the European Court of Justice in Luxembourg ruled that Google could not be held liable for trademark infringement for selling trademarked brand names as search terms, since Google is simply hosting the ads.
As part of the ruling, however, the court agreed that brands could request that Google block ads that obviously confuse consumers. Thus it appeared that the suit brought against Google by LVMH, owner of the Louis Vuitton brand, was unsuccessful.
That wasn't the end of the story, however.
In July, the French Supreme Court effectively took the opposite position, siding with LVMH (one of France's leading luxury marketers) and claiming that Google could be held liable for trademark violations. LVMH applauded the decision, but given the fact that the European Court of Justice speaks for the 27 member countries of the European Union, the French ruling is probably of little real consequence, except in France.
Now, Google plans to move forward with a search policy it put into place two years ago in Britain and Ireland, and six years ago in the U.S. and Canada. The reason for Google's aggressive stance is simple: revenue. By allowing any advertiser access to keyword names that may have been trademarked by others, Google opens the spigot for AdWords, which is responsible for the large majority of the company's income.
Brand owners will now have to police the situation, says Dominic Batchelor, a corporate partner at London's Ashurst law firm. He tells the New York Times, "The onus will be on rights holders to monitor and assert their rights. How readily Google responds to complaints about infringing use remains to be seen."
For its part, Google says it will take complaints seriously and will endeavor to identify counterfeit goods, which is one of the main concerns of luxury brand marketers. Ben Novick, European communications manager for Google, tells the Times that "Users will benefit from seeing more relevant ads following a search on Google."
Google's contention is that consumers can more easily find product reviews and more sources to purchase second-hand goods if the company allows multiple bidders to purchase brand name keywords.
Still, the real problem with the European ruling is that it created a gray area for both brand owners and Google. The likely result? If brand owners don't like what they see on Google, it could lead to more lawsuits.