SEL: Trademark Battle, Google's Achilles' Heel?

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February 05, 2005

Trademark Battle, Google's Achilles' Heel?

Could recent trademark disputes be the only thing to prevent Google from continuing its incredible growth?

CNet reports that another French court has ruled against Google in a trademark infringement case brought by Louis Vuitton Malletier.

The Paris District Court has sanctioned Google and its French subsidiary from selling search-related advertisements against trademarks owned by the luxury fashion designer, which sued the search giant in early 2004. The court charged Google with trademark counterfeiting, unfair competition and misleading advertising. Google was ordered to pay $257,430 (200,000 euros).

The ruling could put a damper on Google's aspirations, to increase its revenue from international operations. Google's recent quarterly report revealed that international revenues were 35% of total sales vs. 29% a year ago and a recent comScore Media Metrix survey shows Google's non-U.S. market share at 58% in October, 2004 -- significantly higher than its 35% U.S. share. If major European countries start limiting Google's AdWords business model - AdWords accounts for 98% of Google's revenues - the company could see a slowdown that would not be well received by Wall Street.

Google has already began the appeal process for another recent French ruling that went against them. Will they do the same with this recent setback?

Google spokesman Steve Langdon said the company has not yet received a copy of the ruling. When it does, he said, the search giant will consider its options, including appealing the decision.

You can bet they will. The company cannot afford to have any restrictions on its AdWords model...billions of dollars are at stake.

Andy Beal | permalink | +marktd |

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