Google Sued For Trademark Infringement

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In an escalating legal battle with big implications for search marketing, Google has been hit with a lawsuit claiming that its sale of the terms "American blind" and "American blinds" as keywords involves trademark infringement.

American Blind and Wallpaper Factory filed a complaint against the search giant, as well as its distribution partners, AOL, Ask Jeeves and EarthLink, in a New York federal court Tuesday. The suit comes a week after AOL settled a suit with Playboy involving similar issues.

The suit claims Google's practice of selling text ads related to keyword search terms takes advantage of American Blind's trademarks, because competitors' ads can appear on results pages that appear when users search for "American blinds" and "American blind." American Blind is asking that Google be permanently stopped from selling those keywords.

The two companies had been in settlement discussions "for some time" over the issue, according to David Rammelt of Kelley Drye & Warren, the firm representing American Blind. In December, Google filed a lawsuit in the U.S. District Court in San Jose, California, asking the court to rule on whether its keyword-advertising policy is legal. In response, American Blind has asked that Google's complaint be dismissed.

Tuesday's New York action by American Blind is the latest development in the case.

Google has agreed to block advertisers from buying keywords including "American Blind Factory" and "Decorate Today," but said it could not block other phrases American Blind wanted to protect, including "American Blind."

Similar issues were addressed in the case brought by Playboy Enterprises . In 1999, Hugh Hefner's adult entertainment empire claimed Netscape (now owned by AOL) infringed and diluted its trademark by presenting ads for rival companies when users entered "playboy" or "playmate" as keywords. The words were among 400 that triggered adult ads.

"We have a federal registered trademark for American Blind and Wallpaper Factory. We do object if you go to Google and type in that exact phrase that consumers may misleadingly be directed to a competitor's link," Rammelt said.

Representatives of Google did not return calls by press time.