Google is not legally responsible for trademark infringement on its Adwords network, the European Court of Justice has ruled at the end of a seven-year lawsuit.
The search company was sued in France by Louis Vuitton™ in 2003. The handbag maker was riled that people were able use Adwords to bid on its trademarks, which then appear in search results and elsewhere.
Google lost that case, appealed, and the case worked its way to the EU's highest court.
"Google has not infringed trade mark law by allowing advertisers to purchase keywords corresponding to their competitors' trade marks," the court said today.
Louis Vuitton™ parent company LVMH™ had a different interpretation, saying the ruling clarifies that Google "can be found liable alongside an advertiser, either because it was aware when selling the keywords that the advertiser was infringing a trademark, or because it did not verify that the advertiser was authorised by the trademark owner".
The ruling essentially extends the exemptions which ISPs and web hosts already enjoy when they unwittingly carry illegal material, to online ad networks.
What the ruling does not do is declare open season on trademark infringement on Adwords. Advertisers choosing to bid on competitors' trademarks as keywords will still be liable.
The judgement reads: "The proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with that trade mark which that advertiser has used without the consent of the proprietor".
Google's senior counsel Harjinder Obhi blogged that "trade mark rights are not absolute".
Obhi added: "We believe that user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts."