Google insists it respects trademarks
An official at the European Court of Justice has intervened in an ongoing row between Google and brand names, such as Louis Vuitton.
Advocate General Poiares Maduro has said that, in his legal opinion, Google has not infringed trademark rights by allowing advertisers to buy keywords.
Brand owners argue that the system is infringing trademarks by allowing firms to piggyback on their brands.
The legal opinion will be seen as at least a partial victory for Google.
The long-running legal dispute will not be ruled on officially until early next year, although this non-binding legal opinion is likely to carry a good deal of weight.
Three brand owners, including LVMH, the firm behind the Louis Vuitton brand, are challenging Google in the French courts and the European Court of Justice has been asked to rule on the issue.
The ruling concerns so-called sponsored links, the section which appears to the right of the main search page, is where advertisers who have bought keywords appear. It creates the majority of its income through sales of these links.
Brand owners argue that many of the advertisers buying keywords - such as "Louis Vuitton" - are selling fake or replica versions of their goods.
However, the Advocate General said that linking other companies to brand names does not constitute a trademark infringement.
"The mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services," said a statement issued on behalf of the judge.
However, he warned that Google could be held liable if brand owners could show that Google's ads had damaged their trademarks and warned that the company could face similar legal action in the future.
Louis Vuitton said that may pave "the way for different national jurisdictions to find Google liable as this process continues".
Google said in a statement: "We note with interest the Advocate General's opinion. We now await the decision of the European Court of Justice in a few months time.
"We believe that selecting a keyword to trigger the display of an ad does not amount to trademark infringement, and that consumers benefit from seeing more relevant information rather than less.
"We also believe that consumers are smart and are not confused when they see a variety of ads displayed in response to their search queries."