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August 17, 2010Client Alert

Google’s AdWords Policy Expanded to Europe and Canada

U.S. and European courts continue to endorse Google, Inc.’s business practice of allowing advertisers to bid on third-party trademarks as keywords that generate the advertisements appearing alongside Google search results.

Google recently announced the expansion of its U.S. policy to Europe, Canada and Ireland. Previously, advertisers in these countries were not allowed to bid on keywords that corresponded to a competitor’s trademarks, or use a third-party trademark in the advertising text. The new European policy, like the current U.S. policy, will allow third-party trademarks to appear in the advertising as long as the use is not confusing.

The change in the European AdWords policy follows the European Court of Justice’s March 2010 decision that Google did not infringe trademarks when allowing advertisers to bid on trademarks as keywords. U.S. courts have reached similar conclusions, often based on the rationale that Google is not competing with the businesses whose trademarks it sells through the AdWords advertising program.

Most recently, the U.S. District Court for the Eastern District of Virginia dismissed Rosetta Stone Ltd’s trademark infringement suit against Google. Rosetta Stone alleged that Google infringed its trademarks by allowing third-parties to not only bid on Rosetta Stone’s trademarks, but also use the trademarks in the sponsored link titles and advertising text. The Virginia court did not believe that customers would be confused between sponsored links and the search results and found Google’s use of the trademark terms to be a functional purpose. The Virginia decision is consistent with a March 2010 decision from the Eastern District of California, which dismissed similar trademark infringement claims against Google based on the AdWords program.

Although courts are approving the use of trademarks as keywords to generate advertisements, trademark owners are permitted to file a complaint with Google for use of trademarks in advertising text when that text is likely to cause confusion or is critical or negative. Google will investigate and remove advertisements it feels violate the policy. More information on the Google AdWord’s trademark policy is available here.

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