Google dispatches with trademark suit


SAN FRANCISCO -- A home decor merchant has dropped a federal lawsuit attacking Google Inc.'s practice of connecting some online ads to trademarks, handing the Internet search leader its latest legal victory on the prickly issue.

American Blind & Wallpaper Factory Inc. agreed to abandon the nearly 4-year-old case without receiving any payment from Google, according to a settlement dated Aug. 31. The truce also stipulated that Google won't change its long-standing policy that let advertisers place ads tied a rival's trademark.

The settlement avoided a trial that was scheduled to begin Nov. 13 in San Jose. The two sides agreed to cover their own legal costs.

"We are very pleased with this outcome," Google lawyer Michael Kwun said in a statement Tuesday.

David Rammelt, an attorney representing American Blind & Wallpaper, didn't immediately return phone messages Tuesday.

The lawsuit targeted one of the ways that Google makes money from its widely used search engine.

Under the practice, a search request for a specific business like American Blind & Wallpaper triggers commercial links from competitors that bid for the right to show ads under specific terms, or "keywords." Google receives a commission when visitors click on the advertising links, which accompany the main search results.

American Blind and several other companies have sued Google to prevent their trademarks from being used as advertising keywords, but the Internet search leader has prevailed in the legal battles that have unfolded in the United States so far. Mountain View-based Google has lost similar trademark cases in France.

Eric Goldman, an assistant professor at Santa Clara University's School of Law, believes American Blind's experience may discourage similar suits. "This case reiterates that keyword-related lawsuits can be a sucker's bet," Goldman wrote on his blog.

But the skirmishing over the issue isn't over yet. American Airlines, part of AMR Corp., became the latest to lash out at the practice in a trademark infringement case filed against Google last month in a Texas federal court.