A French company has successfully sued Google for trademark infringement constituted by the display of keyword advertisements. There can be little doubt that this issue will continue to be played out across the various jurisdictions for the next several years. The court

ruled against Google in a lawsuit filed by a French resort chain over the search company’s AdWords [technology]. As a result, Google can no longer use the trademarks of Le Meridien Hotels and Resorts for its keyword ads. The French chain had sued Google, claiming that [their] practice of allowing rivals to bid on keywords related to its name and trademarks was harmful to its business.

The plaintiff’s conduct seems rather odd in light of the fact that Google was effectively giving them free advertising. I conjecture that the real reason for their action was that competitors were exploiting Le Meridien’s popularity in online searches to place advertisements for rival hotel chains. Thus, like most commercial enterprises aided by a new technology, those that stand to gain from it (smaller competitors) extoll its virtues, while established players and market leaders brand it inequitable hellspawn.

Given that more than 90% of Google’s revenue derives from its keyword advertising programme (of which a sizeable portion relies upon registered trademarks), they are going to have to find a way to balance these interests. Google may have some time, however: a similar case was dismissed in the United States last year.