Google France loses appeal in AdWords trademark dispute

PARIS - Google's French subsidiary has lost its appeal against an October 2003 court judgment ordering it not to display advertisements alongside searches related to a French travel agent's trademarks.

The Court of Appeals in Versailles, France, ruled last Thursday that another court's earlier decision in favor of travel companies Luteciel SARL and Viaticum SA should stand. In that case, Google France SARL was ordered to pay €75,000 (US$100,000) in fines and legal costs for abuse of two phrases trademarked by the companies.

Users of Google's search engine see targeted advertisements alongside their search results. Google's AdWords service allows advertisers to choose the search terms that will trigger the display of their messages -- and these terms can include the names or brands of their competitors. In this case, Luteciel and Viaticum objected to Google accepting payment from their competitors for placement of advertisements alongside search results for their trademarks "bourse des vols" and "bourse des voyages" ("flight exchange" and "trip exchange").

Luteciel and Viaticum are not the only French companies to sue Google over this practice: French luxury goods LVMH Moët Hennessy - Louis Vuitton SA won a similar case against Google in February. Other search engine operators have fallen foul of the same French law: In January, Yahoo Inc.'s Overture sponsored search results division lost a suit brought by French hotel chain Accor SA over the placement of rivals' advertisements alongside search results for its hotel brands.

Google isn't ready to let the matters drop. It is still considering whether to appeal the LVMH decision, according to Google France spokeswoman Myriam Boublil.

As for the travel agency case, "We're considering an appeal of the appeal," she said.

Under French law, the practice of responding to an Internet search for one company's products with information about those of another manufacturer is considered akin to counterfeiting.

Boublil said that French law has not yet adapted to the advance of technology, leaving Internet businesses like Google operating in a gray area that legislators have not yet considered.