First it was Microsoft who sued an Adwords Customer for selling fake software on Google Search Results. A week later, a dating website sued Yahoo for using their trademark keywords to advertise on Google.And the most recent case involves Luxury goods maker - Louis Vuitton.
Adwords users were advertising for fake Louis Vuitton goods like handbags using Google Sponsored Links. Topping the list for Louis Vuitton are "handbag knock-offs" and "purse knock-offs." The French company didn't like this, sued Google directly over the issue and even won the ruling in a Paris Court.
Three lawsuits related to Adwords in a span of just one month ? It may be something to really worry about for Google because most the revenue generated by Google is via advertising.
Though they say that their trademark policy prevents bids on other people's registered trademarks, it may not be easy to implement as it sounds. How do you compile the data from various countries ?
A lot of Adwords customers use this program to advertise for their own product when someone is searching for a competitor's product. When the trademark issue arises, these advertisers will not be able to bid on these keywords thereby eliminating a huge chunk of revenue from Google.
I think the whole Adwords Advertising model is under huge pressure and Google may have to act real fast to come with an acceptable solution that prevents future copyright violation lawsuits.