The practice of selling a competitors' trademark as a keyword--triggering rival sponsored ads on the search results page--is a contested area of Internet law and one that's never been fully litigated. Trademark practitioners awaiting a definitive court decision were disappointed when American Blinds threw in the towel in its dispute with Google (Google v. American Blinds & Wallpaper Factory). (No money changed hands in the settlement.)
American Blinds argued that it was illegal for Google to sell 37 phrases, including "american blind," "american blind discount," and "american blind factory." The company's case was crippled by discovery sanctions, a ruling against two trademarks, and rumors that American Blinds may have been engaging in the very conduct it was complaining about--buying rival trademarks as keywords. (Note, the American Blinds case was filed by Google seeking a declaratory judgment in 2003 after American Blinds had been threatening to sue for over a year.)
The next match-up in the keyword litigation arena is American Airlines Inc. v. Google. American Airlines filed its case August 16, 2007.
To learn more about trademarks and the law, check out Trademark: Legal Care for Your Business & Product Name, by Stephen R. Elias (Nolo).
