Blog Post

Europe May Rule Against AdWord-Squatting Advertiser

In a case brought by Louis Vuitton owner LVMH last year, the European Court of Justice (ECJ) ruled advertisers buying rivals’ names as AdWords keywords did not make Google (NSDQ: GOOG) responsible for trademark infringement.

But that just moved the spotlight on to advertisers themselves engaged in the practice. Now, one such advertiser is likely to be prosecuted for doing so.

In a case brought by Interflora against Marks & Spencer, the ECJ’s advocate general (an adviser) has recommended the UK retailer be found liable for trademark infringement because it bought the “Interflora”, the name of the florist network, as Google ads for its own flower ordering business.

The advocate general’s opinion is not binding, but does suggest the ECJ’s own verdict, in a few months’ time, may find against Marks & Spencer.

That would seem to mean that, in Europe, despite Google having got off the hook, the practice of companies squatting on each others’ keywords to pinch customers is effectively banned. But the effect may not be so across-the-board…

“This opinion is based heavily on the particular facts here – namely that the trade mark ‘Interflora’ denotes a commercial network of florists providing certain services and products,” says Kirsten Gilbert, a partner with the law firm Marks & Clerk.

“However, it will bring some comfort to brand owners that in such situations where members of the public could believe that the competitor is a member of their commercial network, they can prohibit the use of their trade mark as an AdWord.

“Google is still directly affected – the AdWord service is a major source of revenue for the California-based corporation. With this opinion, Google’s customers may well reconsider how extensively they want to use a competitor’s mark as an AdWord.”