What is happening here? The Headline does not seem to jive with the story:
Google Faces Fallout as China Reacts to Site Shift
By MIGUEL HELFT and MICHAEL WINES
Google's China operations came under pressure as some
content from its uncensored Hong Kong site was blocked.
http://www.nytimes.com/2010/03/24/technology/24google.html?th&emc=th
E.U. Court Curbs Sales by Google of Brand Names as Keywords
By ERIC PFANNER
Published: March 23, 2010

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PARIS — The European Union’s highest court on Tuesday gave Google broad latitude to sell advertising linked to trademarks like Louis Vuitton on its search engine, a practice that angers companies, which fear a loss of control over their brand names.

Legal experts said, however, that the ruling stopped short of the definitive precedent that Google and brand owners alike had sought. Instead, it contained caveats that could result in a new flurry of lawsuits over the sale of “sponsored links” generated by Google searches, the main source of the company’s $23 billion in annual revenue.

In the ruling, the European Court of Justice, in Luxembourg, said Google should be allowed to auction off brand names to a variety of advertisers, not just the owners of the trademarks. Brand owners, led by LVMH Moët Hennessy Louis Vuitton, the French luxury goods company, argued that only they or authorized sites should be able to buy such trademarks.

Google already conducts such sales in the United States and some European countries, including Britain and Ireland. But elsewhere in Europe, including France, the practice has been restricted by the courts, which have favored the brand owners.

Google says that selling brand names as ad keywords to multiple bidders helps consumers because it allows them to find product reviews, sellers of second-hand goods and other information.

“Our guiding principle has always been that advertising should benefit users, and our aim is to ensure that ads are relevant and useful,” Google said.

But LVMH and two other companies whose cases were considered by the court — a matchmaking service and an online travel agency — argued that the sale of their brand names by Google misled consumers and aided operators of Web sites selling copies of well-known goods and services. So important did LVMH consider the case that it enlisted the support of the French government, which filed a brief in support of its case.

The ruling Tuesday was the highest-level decision on the issue. While Google had faced similar lawsuits in the United States, it settled some of them, and no clear precedents were established. In France, after several decisions in favor of LVMH, Google appealed to the highest French court, which in turn referred questions to the European court for clarification.

The top E.U. court said Google should not be held liable for trademark infringement if it removed ads promptly when brand owners complained about violations. But individual advertisers could be liable if ads generated by another company’s brand name were found to mislead consumers, the court said.

Advertisers “cannot, by using such keywords, arrange for Google to display ads which do not allow Internet users easily to establish from which undertaking the goods or services covered by the ad in question originate,” the court said.

Lawyers said this could strengthen brand owners’ hand in lawsuits against rivals that buy their brands as search terms.

“Advertisers using the service will now need to tread very carefully indeed,” said Mark Blair, a partner at Marks & Clerk Solicitors in London. “Today’s ruling may to an extent ring-fence Google from claims by brand owners, but it will not close the door on future litigation in this area.”

Several trademark lawsuits against users of Google’s search-ad system are already pending in Europe, including one involving the florists’ network Interflora, which sued the British retailer Marks & Spencer. That company had bought the Interflora keyword on Google as a way to promote its rival flower delivery service.

The E.U. court said Google, too, could be held liable if it were found to have encouraged trademark violations or counterfeiting.

For example, Google critics have complained about one of the company’s services, which suggests potential keywords to advertisers. LVMH said in its lawsuit that these included terms like “fake Louis Vuitton bags.”