Louis Vuitton and other luxury fashion houses discovered that sponsored advertisements for counterfeit or competing products were appearing when users searched for their brand names. They sued Google.

The CJEU analysed Google’s role in the AdWords system: is Google an active user of the marks or merely a neutral technical intermediary? The answer was that Google plays a neutral role and is not directly liable for advertisers’ use of trademarks.

However, advertisers who purchase keywords corresponding to competitors’ marks and thereby create confusion among consumers may be found liable for infringement.

And Google is not entirely off the hook: if it receives notice of infringing advertisements and fails to act promptly, it may lose its liability exemption. The same logic applies to all digital platforms hosting third-party content.