A ruling Thursday in Europe's Court of Justice could have wide-reaching implications for online advertising.
Judges confirmed that companies using competitors' names as Internet advertising keywords are not infringing European trademark laws. This news will be a major boost to Google's revenue-generating Adwords service.
The decision follows a long-running battle between Google and trademark owners. Thursday's case involved temporary cabin maker Portakabin and its competitor Primakabin. Primakabin chose the keywords 'portakabin', 'portacabin', 'portokabin' and 'portocabin' as its search terms for Google Adwords. The last three variations were chosen so that internet users searching for the company would not miss Primakabin's ad due to a minor spelling mistake.
The judgment by the Luxembourg-based court, Europe's highest legal authority, accepted that when a user searches Google on the basis of one or more words, the search engine will display the sites which appear to best correspond to those words. It further allowed that customers of Google's paid-for Adwords service may choose whichever words they want, within reason, without infringing trademark law.
The court ruling upholds a precedent set by the Google-Louis Vuitton case, when the latter claimed that its brand name triggered ads for companies selling counterfeit Louis Vuitton goods. The court in that case found that if Internet service providers were "neutral" about the content, then trademark law was not infringed.