March 17 (Bloomberg) -- Louis Vuitton told the European Union’s highest court that Google Inc. doesn’t have the right to sell trademark-protected names to advertisers that trigger “sponsored links” when the name is used in an Internet search.

Google, owner of the world’s most-used Internet search engine, and LVMH Moet Hennessy Louis Vuitton SA have been locked in a six-year fight over Internet searches that link users to sites selling counterfeit fashion accessories. Google is appealing a 2006 ruling by a Paris court that it breached Louis Vuitton’s trademark rights.

“Google makes money not by reason of the nature of the keyword, but by someone clicking on the keyword,” Google lawyer Alexandra Neri told a 15-judge panel of the European Court of Justice in Luxembourg today. “The decision to click or not to click belongs to who -- clearly to the Internet user.”

The case is the EU tribunal’s first on whether companies in the 27-nation region can block search engines from using trademarked brand names to trigger results. Internet ads tied to keywords generate most of Google’s revenue.

“Google’s advertisement activities have given companies which sell fake products unprecedented visibility beyond their wildest dreams,” Louis Vuitton lawyer Patrice de Cande told the court.

Keywords aren’t visible and therefore can’t be considered a protected trademark, Google’s Neri told the court.

Trademark

LVMH sued in 2003 and the Paris Central Court three years later ordered Mountain View, California-based Google to pay LVMH 300,000 euros for trademark infringement. France’s highest appeals court last year referred the case to the EU tribunal for guidance. A ruling is expected by next year.

Whether keywords are protected under EU trademark law has been “of great concern” to brand owners, said Stijn Debaene, a lawyer with Allen & Overy LLP in Brussels. “This is the most important case for the e-commerce industry” in the EU.

The French court also asked the EU tribunal whether Internet search engines could invoke an EU law holding that they can’t be found liable until brand owners notify them of a possible breach.

If it’s unable to invoke this law, Google may be forced “to verify each time how an advertiser is using the keywords after buying them,” said Debaene, who isn’t involved in the case.

‘Play Policeman’

Google “doesn’t seek to play policeman to control what the advertisers do,” Neri told the court today. When Google’s French unit receives proof of a registered trademark by a company it will add the name to a database of other names that will be blocked from being chosen as keywords, she said.

While Google uses similar means elsewhere to block keywords, it doesn’t bar them in the U.S., the U.K., Canada and Ireland, said Neri. In these countries, Google blocks advertisements that include protected trademarks on the Web site, she said.

LVMH’s de Cande told the court Google didn’t act quickly enough when it received Louis Vuitton’s complaint and it didn’t change its system.

“Google is perfectly capable” to block infringing uses of trademarks everywhere, “but it won’t do so until it is legally required to do so,” said de Cande.

An adviser to the court known as an advocate general will give a non-binding opinion by June 4. The final ruling is expected within six months after that.

Today’s case is Google France v. Louis Vuitton Malletier. C- 236/08.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

Last Updated: March 17, 2009 09:10 EDT