updated 2/7/2005 10:39:47 PM ET 2005-02-08T03:39:47

Internet search engine Google Inc. said Monday it was weighing a possible appeal after a Paris court ordered it to pay 200,000 euros ($260,000) plus costs to luxury goods maker Louis Vuitton for breach of trademark.

The high court in central Paris awarded the damages in a decision late Friday and ordered Google to stop displaying advertisements for Vuitton's rivals whenever Internet users typed Vuitton's name or other trademarks into the search engine.

"We're studying the ruling," said Google France spokeswoman Myriam Boublil. "No decision's been taken yet on an appeal."

The court ruled that Google was guilty of false publicity and counterfeiting, upholding complaints by Vuitton that Internet users searching for the Paris-based maker of luxury bags, accessories and apparel were also shown ads for companies selling forgeries.

The verdict was welcomed Monday by Vuitton's parent company, luxury giant LVMH Moet Hennessy Louis Vuitton SA, which said Google's offending "Sponsored Links" had misled consumers.

"Sending Internet users to these other sites made it seem as if their products were Louis Vuitton, when in fact they were fakes," LVMH spokesman Olivier Labesse said.

The ruling is the latest blow by French courts against Google's "Adwords" system, which allows companies to buy advertising linked to search keywords -- including rivals' trademarks.

In October 2003, a court in Nanterre, west of Paris, fined Google for violating the trademark of an online tour operator, Bourse des Vols -- opening the floodgates to a series of other challenges.

Google is still appealing that decision and is now defending itself against another challenge filed last year by Paris-based AXA SA, the world's No. 3 insurer. In December, Le Meridien Hotels and Resorts won a preliminary ruling against Google as part of its ongoing Adwords lawsuit.

U.S. courts have so far shown more tolerance toward Google's advertising policy. A judge ruled in December that it did not violate federal trademark laws.

But some analysts say the tougher line on trademarks taken by French courts could nevertheless spell trouble for the $1.6 billion paid-search industry -- which now accounts for almost one-third of all U.S. online advertising.

The latest Paris ruling against Google Inc. applies to all its sites, not just its French Google.fr page. Searches for "Louis Vuitton" and "Vuitton" conducted Monday on the main Google.com portal yielded none of the usual sponsored links to other companies.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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