On Dec. 16, 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 Oct. 25 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 euros). 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 euros. Finally, Google must pay all court fees and a fine of $2,592 (2,000 euros).
A representative of Mountain View, Calif.-based 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 percent 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 favorable 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 favorable ruling in a case brought by Geico, the car insurance company. In December, a 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 , including one brought by American Blind and Wallpaper Factory.