It was up and down for Google last week.
On the downside, the United States Department of Justice, in a brief filed in federal court, strongly criticized the search giant's tentative settlement of a class action suit launched over its plan to scan and post millions of books online. The DOJ's objections were serious enough that Google and the other parties to the deal asked the judge overseeing it for more time to address those complaints. (On Thursday, Judge Denny Chin of the U.S. trial court in Manhattan granted the motion to delay.)
On the upside, Google got some good news last Tuesday when the Advocate General of the European Court of Justice issued a published opinion in its favor in a case brought by French luxury goods maker LVMH and a number of French litigants over its Adwords program.
While the full ECJ still has to issue a final ruling in the case (something that's not expected for a few months), in most instances the court follows the recommendations contained in an advocate general's opinion.
At issue is how Adwords business, the source of much of the company's revenue, sells keywords to customers who want to advertise on its search result pages. The practice -- the subject of multiple trademark infringement cases in the U.S. -- enables a company to buy ad positions on search-result pages that contain its competitors' brand names.
In his opinion, Advocate General Poiares Maduro, expressed this key point: "The question, as put to the Court, is whether the use of a keyword which corresponds to a trademark can, in itself, be regarded as a use of that trademark which is subject to the consent of its proprietor." An advocate general is assigned to each case before the ECJ and can be asked to give an opinion, on a new point of law, which the court's judges can then use in their deliberations.
The case stems from three separate pieces of litigation brought against Google in France by LVMH, two French travel companies (Viaticum SA and Luteciel SARL), and the proprietor and license holder of the Eurochallenges trademark. In each case Google was found guilty of trademark infringement and appealed to the Cour de Cassation. That court then asked the ECJ for guidance on several specific points under the terms of European Union law and how it applies in these cases. That, in turn, led to the Advocate General's opinion.
The conclusion in Maduro's opinion points to a fairly comprehensive victory for Google. Under the points referred to the ECJ, Maduro states, Google is not guilty of trademark infringement. At one point the Advocate General writes: "A trademark proprietor may not prevent the provider of a paid referencing service from making available to advertisers keywords which reproduce or imitate registered trademarks."
Given the broad ramifications of the case, it's inevitable that the full court will exercise particular care in its consideration, observers say.
"I wasn't surprised by the opinion because it's based on the language of the EU's trademark directive and I don't think you could expect the Advocate General to step away from that," says Marija Danilunas an IP partner with Dewey & LeBoeuf in London. Danilunas adds that, although it would be unusual, it's not impossible that the court will draw a different conclusion than the advocate general did.
For now, Google can take some comfort from the opinion even as the possibility of further Adwords-related litigation looms in Europe. As the advocate general wrote, questions remain around Google's liability for the results of searches which, as in the original LVMH case in France, may yield ads for fake goods.
"In this opinion the advocate general stresses that he's just focusing on the process by which keywords on Google are bought," says Jason Rawkins, a trademark partner at Taylor Wessing in London. "He's not looking at the potential liability that may arise from an advert's text." That issue was outside of the advocate general's mandate and is a matter for national courts.
The significance of this case is not lost on anyone. "This opinion is going to be very controversial," predicts one London-based IP specialist.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.