A French court has fined search engine giant Google €350,000 and said that its search advertising business has infringed on two companies' trade marks.
Google allows anyone to pay to have their adverts appear beside certain words. Trade mark holders have argued that allowing other people to buy an association with their brands constitutes trade mark infringement.
French courts have previously agreed, upholding complaints by Louis Vuitton Moet Hennessy and Meridien Hotels that their trade marks were infringed by the system.
Tribunal de Grande Instance de Paris has ordered Google to pay €200,000 to Voyageurs du Monde (Travellers of the World) and €150,000 to Terres d'Aventure (Lands of Adventure), despite the judge saying that the commercial harm to the companies was marginal.
The company has also been ordered to pay €60,000 in costs.
When web users typed the trade marked terms 'voyageur du monde' and 'terres aventure' into Google they say the search results produced by Google were accompanied by adverts for those companies' competitors.
The Court said that though the commercial harm was marginal it had denied the companies some customers by directing them to other sites, French newspaper Le Figaro reported.
Google said that it has already appealed the case to the Paris Court of Appeal.
"Google disputes this judgment," said a Google statement. "Google's terms and conditions make clear that advertisers are responsible for their choice of keywords and warn against their unauthorised use. Google believes that our advertising services comply with French and European law on online advertising."
The search company last year changed its policy on keywords and trade marks in the UK and Ireland. It had previously allowed only trade mark holders to bid for the right to have their words or phrases trigger their ads in all territories outside North America.
Last April, though, it began operating the same policy in the UK and Ireland as it had in the US, allowing anybody to bid on a term as an ad trigger, even companies that did not own that term's trade mark.
Last week a German court asked the European Union's top court the European Court of Justice (ECJ) to rule on two similar disputes. It has asked the ECJ to rule on whether or not the purchase of a trade marked term as a keyword constitutes use of that trade mark.