## Facts

- Google operated the AdWords paid referencing service, allowing advertisers to select keywords that triggered the display of “sponsored links” alongside search results.
- Advertisers could select keywords identical to third-party trademarks without the trademark owners’ consent.
- In one dispute, trademark terms associated with “Louis Vuitton” triggered ads linking to sites selling imitation or counterfeit goods; advertisers could combine the marks with terms such as “imitation” and “copy.”
- In other disputes, trademark terms triggered ads linking to competitors of the trademark owners.
- Google stored advertiser-selected keywords and displayed ads based on those keywords under parameters set by advertisers.
- French courts found Google liable for trademark infringement in the Louis Vuitton dispute; Google appealed to the Cour de cassation.
- The Cour de cassation referred questions to the Court of Justice concerning trademark “use,” liability for keyword advertising, and applicability of the E-Commerce Directive hosting limitation.

## Issues

1. Whether Google “used” signs identical to trademarks “in relation to goods or services” by storing trademark keywords and displaying ads triggered by them.
2. Under what conditions an advertiser’s selection of a competitor’s trademark as a keyword infringes trademark rights, particularly by impairing trademark functions (notably origin).
3. For trademarks with a reputation, when keyword advertising constitutes taking unfair advantage of, or being detrimental to, the mark’s distinctive character or repute.
4. Whether Google could rely on the E-Commerce Directive Article 14 hosting limitation, and how a “neutral” versus “active” role affects that protection.

## Decision

- The Court held that Google’s operation of AdWords—storing keywords and displaying ads triggered by them—did not constitute trademark “use” by Google in the relevant sense because Google did not use the sign “in relation to goods or services.”
- The Court held that advertisers selecting another’s trademark as a keyword are “using” the sign and may be prohibited where the resulting ad does not enable, or enables only with difficulty, the average internet user to determine whether the advertised goods/services originate from the trademark owner (or an economically linked undertaking) or from a third party.
- For reputed marks, the Court indicated that keyword-triggered ads may be prohibited where they take unfair advantage of or are detrimental to the mark’s distinctive character or repute (including where ads facilitate sales of imitation goods), focusing primarily on the advertiser’s conduct.
- The Court held that Google could, in principle, fall within the Article 14 hosting limitation if its role was neutral—merely technical, automatic, and passive—without knowledge or control over stored data; if Google played an active role conferring knowledge or control, Article 14 would not apply.
- The Court left to the national court the fact-specific assessment of whether Google’s conduct was neutral or active and, if Article 14 applied, whether Google acted expeditiously after obtaining actual knowledge of unlawful content.

## Legal Principles

- Trademark infringement under the relevant EU trademark provisions requires “use” of the sign “in relation to goods or services”; providing a technical advertising platform that stores keywords and displays ads based on advertiser parameters is not, by itself, such “use” by the platform operator.
- An advertiser’s keyword use is infringing where ad presentation impairs trademark functions, especially the origin function, by preventing (or materially hindering) users from identifying whether the offer originates from the trademark owner (or a linked undertaking) or from a third party.
- For marks with a reputation, use may be prohibited where it takes unfair advantage of, or is detrimental to, the mark’s distinctive character or repute (including association with imitation goods).
- An intermediary may invoke the E-Commerce Directive Article 14 hosting limitation only if it plays a neutral role (merely technical, automatic, and passive) and lacks knowledge or control of stored data; an “active role” defeats the limitation.
- Even where Article 14 applies, the intermediary must act expeditiously to remove or disable access to unlawful information upon obtaining actual knowledge.

## Conclusion

The Court allocated primary trademark infringement risk in keyword advertising to advertisers based on how ads affect consumer ability to identify origin, while holding that the AdWords operator’s storage and display functions are not trademark “use” and may be protected by hosting immunity when the operator remains neutral and responds promptly after notice.


Google France SARL v. Louis Vuitton Malletier SA, Joined Cases C-236/08, C-237/08 & C-238/08 (C.J.E.U. 2010)