Google suffers third defeat in French keying case

In Louis Vuitton Malletier SA v Google Inc, the Paris Court of First Instance has confirmed the tendency of French courts to favour trademark owners against internet search engines that provide paid placement services. The court prohibited Google Inc and Google France from using Louis Vuitton Malletier SA's (LVM) trademarks on their websites.

LVM is a well-known luxury company that owns several trademarks for LOUIS VUITTON, LV and VUITTON. Google owns a world-famous search engine that generates 98% of its revenue by selling keywords to advertisers. The Adwords program allows parties' advertisements to appear as sponsored links in listings corresponding to keywords they have chosen. The price depends on the number of users clicking on the ad and on its ranking in the listings.

Keying the marks LOUIS VUITTON, LV or VUITTON on the Google websites brought up sponsored links for sites offering to sell counterfeit LVM products. LVM brought an action alleging that Google infringed its trademarks, trade name and domain name rights by selling LOUIS VUITTON, LV and VUITTON as keywords to third parties. This, claimed LVM, misled consumers into believing that the websites triggered by those keywords were affiliated to LVM.

Google argued that:

• French courts do not have jurisdiction over this dispute as the websites are operated from California;
  
  
• it had not carried out any act of counterfeiting because it had never used LVM's trademarks or trade name - the use was by the advertisers; Google's services are completely automatic so Google could not be held liable for choices made by keyword buyers; and
  
  
• Google is protected under Article 14 of the EU E-Commerce Directive, which provides a special liability regime for internet service providers (ISPs):

"1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, member states shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:

(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts and circumstances from which the illegal activity or information is apparent; or

(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information."

The court rejected Google's arguments. Firstly, it stated that since the websites, including 'google.com', are accessible from France, French courts have jurisdiction on this dispute.

Secondly, the court held that Google commercially exploits keywords that are protected as trademarks, which infringes LVM's rights.

The court stressed the fact that Google's Adwords program and its search engine are separate parts of Google's operations. When selling keywords, Google could not be considered an ISP; rather, it was then an advertising medium and thus could not be exempted from liability under the E-Commerce Directive.

Lastly, the court stated that consumers believed that the sponsored links were affiliated to LVM, and therefore were actually misled by the ads triggered by the trademarks. Accordingly, the court ordered Google to pay €200,000 for trademark infringement, unfair competition and misleading advertising, as well as costs and lawyers' fees.

The case is good news for mark owners as the French courts seem to be continuing to take their side in the battle over keying: Google had already lost two similar cases (see Google's sponsored links infringe trademarks and French court clamps down on trademark keyword searches), while Overture lost in January in its keying case against SA Société Accor (see French court clamps down on trademark keyword searches). In contrast, Google won in December a US keying case against Government Employees Insurance Company in a federal court in Virginia (see Google wins partial victory in GEICO keying case).

Richard Milchior, Milchior-Smilevitch, Paris