Google faces trademark suit over keyword ads

A lawsuit filed by American Blind and Wallpaper Factory intensifies an ongoing dispute over whether Google's policy of selling ads related to search terms is legal or involves trademark infringement.

A lawsuit filed this week has intensified an ongoing dispute over whether Google's policy of selling ads related to search terms is legal or involves trademark infringement.

American Blind and Wallpaper Factory filed suit against the search giant and its partners, AOL and Netscape, in a New York federal court Tuesday. The suit claims Google's practice of selling text ads related to keyword search terms takes advantage of American Blind's trademarks, given that competitors' ads can appear on results pages turned up by searches for "American wallpaper" and "American blind."

"We spend millions of dollars annually to build brand awareness and cannot stand idle while Google allows our competitors to ride our coattails," said a statement from Steve Katzman, CEO of American Blind.

In November, Google filed a complaint in the U.S. District Court in San Jose, Calif., asking the court to rule on whether its keyword-advertising policy is legal. According to the complaint, Google pursued a court ruling after receiving legal threats from American Blind about its advertising policy. American Blind has insisted Google stop selling keyword phrases it claims violate its trademarks.

Google had said it would block advertisers from buying keywords that directly infringe on American Blind's trademarks, including "American Blind Factory" and "DecorateToday" but said it could not block other descriptive phrases American Blind wished to protect. Those phrases included "American wallpaper" and "American blind."

American Blind's suit asks the court to consider its claims and dismiss the Google suit.

The law is unclear in the United States about the responsibility of search engines to police trademarks in paid search. Earlier this year, auction giant eBay asked Google to block advertisers from using its trademark in sponsored search results. eBay listed, in 13 pages, a wide selection of terms related to its trademarks. Google complied with some of eBay's requests. In August, Louis Vuitton sued Google and its French subsidiary for similar alleged trademark infringement, and a French court in October ordered Google to cease the practice and pay a fine.

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