(Corrects to show ‘keyword’ ban was lifted in U.S. in 2004 in sixth paragraph in story originally published May 29.)

May 29 (Bloomberg) -- Google Inc. said it will let most U.S. advertisers use trademarked terms they don’t own rights to, such as brand names, in ad text on search-results pages, allowing companies to create “narrowly targeted” messages that highlight specific inventory.

The change set for June 15 comes as Google, owner of the most-used Internet search engine, seeks to expand its share of the $45.7 billion online advertising market hurt by the global recession. Some companies have complained the use of their terms in Google’s “Sponsored Link” ads is a trademark violation.

“Under our old policy, a site that sells several brands of athletic shoes may not have been able to highlight the actual brands that they sell in their ad text,” Google said this month in its Web site. “Under our new policy, that advertiser can create specific ads for each of the brands that they sell.”

Google, based in Mountain View, California, said it’s still “willing to perform a limited investigation of reasonable complaints about use of trademarks in ads.” According to the policy, advertisers may violate the new rule if they don’t actually sell or facilitate the sale of the goods or services corresponding to the trademarked term.

“It makes sense under U.S. law. It’s pro-competitive,” Gene Landy, a trademark attorney with the firm Ruberto, Israel & Weiner PC in Boston, said today in an interview. “It’s not much different than if I put an ad in the paper that said ‘thinking about buying a Mercedes? Buy a Volvo instead.’”

Lifting Restrictions

In a related move, Google on June 4 will allow advertisers in most non-European Union countries to place ads on results pages based on searches using their competitors’ trademarked terms. The change will bring most of the world in line with a policy that took effect in the U.S. and Canada in 2004. The rule expanded to the U.K. and Ireland last year.

“Advertisers are responsible for the keywords they choose to generate advertisements and the text that they choose to use in those advertisements,” Google said on its Web site. “We encourage trademark owners to resolve their disputes directly with the advertisers.”

Such use of keywords six years ago triggered a trademark- infringement lawsuit in Europe by luxury retailer LVMH Moet Hennessy Louis Vuitton SA. The owner of Louis Vuitton claimed the practice violates its protected brand names. Google has settled similar U.S. lawsuits by AMR Corp.’s American Airlines and auto-insurer Geico Corp.

In 2006, the Paris Central Court ordered 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.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net.

Last Updated: June 1, 2009 15:31 EDT