24 March 2010 | Author: D. Warburton Search Copywriter

Google keyword bidding supported by EU ruling

The European Court of Justice has ruled that Google has not infringed trademark laws by allowing open keyword bidding for advertisers to buy trademarks owned by their competitors.

In the Official Google Blog, the company explained: "Trade marks are part of our daily life and culture, helping us to identify the products and services that we may be looking for. They are key for companies to market and advertise their products and services. But trade mark rights are not absolute.

"We believe that user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts."

The ruling found that Google was not liable for trademark breaches against Louis Vuitton and other companies by selling protected keywords, unless it could be proved that Google had knowledge or control over the data. BusinessWeek reports that Google could still be liable under certain conditions, for instance if brand-name keywords link to ads that are found to infringe trademarks, and this may motivate the search giant to change the way in which sponsored links are sold through Google AdWords.

Online ads sold through AdWords accounted for 97 per cent of the company's $23.7 billion (£15.8 billion) revenue last year, and although Google does not need to change the way it sells its ads, it may be required to monitor ads linking to trademarked search terms - and considering that brand and product keywords account for roughly half of all searches carried out, according to Standard & Poor's Equity Research, this could present a mammoth workload for the company.

Google stated: "Our guiding principle has always been that advertising should benefit users, and our aim is to ensure that ads are relevant and useful. We will study the decision as we move forward in order to make sure that we continue to deliver advertising that is perceived as both valuable and relevant by our users."

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