Jan 22, 2009, 16:13 GMT
Karlsruhe, Germany - The European Court of Justice is to be asked to decide whether online search giant Google is allowed to serve up competitors' advertisements when internet users search for a brand name, German judges said Thursday.
The decision by the German high court in Karlsruhe was closely watched because it is central to Google's business success.
Google is financed by tiny advertisements presented in a column next to search results. When users type in a brand name, they find that brand's website, but also sometimes see ads alongside for a rival product which they had not previously known about.
A German vendor of sex products, Bananabay, sued Google after a competitor paid to place ads next to search results about that brand.
Google dubs the valued search expressions 'adwords,' but Bananabay claimed Google was abusing its brand name.
The court rejected Thursday two other claims against Google over rivals' purchases of adwords, saying a user would not be misled.
Presiding judge Joachim Bornkamm said the German court would pass the Bananabay issue to the European court because of its importance and because the case must be decided under European Union law.
Google says it is not infringing on any brands, but merely serving up advertisements to exactly the web users likely to be interested.
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