Just when search marketers thought it was safe to sell keywords with abandon, a French court ruling about a Louis Vuitton case may change the game.

Not content with being a thorn in George Bush’s side, the French are now throwing a monkey wrench into search engine marketing. A French court has ruled against Google in a lawsuit brought against the search giant by Louis Vuitton.

How could this Gallic legal decision affect search marketing? Most thought that the issue of whether it was legal to buy competitor’s brands as search keywords had been resolved by Google’s recent court victory in a similar suit brought by Geico (the insurance company with the Gekko mascot). But the Geico case had not gone as far as many thought.

The Federal District Court Judge had dismissed a key charge against Google -- that consumers were confused by competitor’s ads appearing under the Geico keyword. However, Geico’s lead lawyer, Charles Ossola, has pointed out that the Judge did not expressly condone Google’s practice of selling trademarked words to competitors; instead, the judge more narrowly ruled that Geico had not adequately proved that confusion existed. The judge also ruled that ads that themselves mentioned the Geico name did violate trademark; he has not yet ruled whether Google is liable in such cases. 

Still, for most marketers, the Geico case removed concern about the sudden shrinkage of effective inventory that would result from ending competitor bidding on trademarked keywords. 

Then the French court ordered Google to pay 200,000 euros ($260,000) plus costs to Louis Vuitton, and the court ordered Google to stop displaying advertisements for Vuitton's rivals whenever internet users typed in Vuitton's name or other trademarks. The court ruled that Google was guilty of false publicity and counterfeiting, upholding complaints by Vuitton that internet users searching for the Paris-based maker of luxury bags, accessories and apparel were also shown ads for companies selling forgeries. 

"We're studying the ruling," Google France spokesperson Myriam Boublil said. "No decision's been taken yet on an appeal." The Vuitton decision came from a relatively low level court and Google has the option to go to appeals court and then to the French Supreme Court. Indeed it's possible the case could eventually go all the way to the European Court of Justice. 

While there has been a great trend toward international uniformity regarding protecting intellectual property, as new issues arise due to new technologies they get worked out slowly and with much jurisdictional conflict.

This is not the first time French courts have ruled against Google. In October 2003, a court in Nanterre, west of Paris, fined Google for violating the trademark of an online tour operator. In the case that opened the French floodgates, the court said that when searches are done on registered trademarks “Google should "find the means to block advertisements by third parties who have no rights to those trademarks”. 

While European and U.S. law on trademarks is relatively similar, the facts in the Louis Vuitton case differ from those in the Geico case. Where the American court ruled that Geico had not proved consumer confusion, a central element in Louis Vuitton was the fact that Google had sold links to merchants peddling fake Louis Vuitton items. 

Vuitton's parent company, LVMH Moet Hennessy Louis Vuitton SA, welcomed the verdict, reiterating that Google's "Sponsored Links" had misled consumers. "Sending internet users to these other sites made it seem as if their products were Louis Vuitton, when in fact they were fakes," an LVMH spokesperson said.

Google and other search engines will not disclose what percentage of inventory and sales this type of keyword bidding represents, but clearly it is effective. Proponents compare the practice to erecting a billboard across the street from your competitor’s store, while detractors label it out-and-out trademark infringement.

In a search world already short of inventory, the last thing the market needs is a sudden shrinkage of high performance words. Along come the French.

Where the Geico case has made us complacent, the Louis Vuitton decision is cause for alarm. It may well not be efficient for Google to maintain separate trademark compliance policies for France and the U.S. When seeking uniformity, it is easiest to default to the more restrictive (French) policy. Google may or may not choose to go that route. 

This is not the first time in recent memory that the French have caused others to develop heartburn. Just ask President Bush.

Additional resources:

SearchTHIS: The Search Listing Quality Conundrum

Bob Heyman is Chief Search Officer at Mediasmith and is the co-author of Net Results.2 (New Riders) and the Auction App (McGraw-Hill). His Rock Opera “Rock Justice”, co-written with Marty Balin of Jefferson Starship, is in the Book of Rock Lists as one of the Top Ten Most Obscure Rock Operas. In a prior life he was an entertainment attorney.