American Airlines Files Trademark Infringement Case Against Google

  |  August 20, 2007   |  Comments

The suit is similar to others that have preceded it, except that the plaintiff is a major U.S. brand.

In a lawsuit similar to many others that preceded it, American Airlines is taking on Google's keyword-based AdWords business by alleging the practice is a blatant example of trademark infringement.

The complaint, filed in U.S. District Court in Fort Worth, makes the same argument presented by a number of other companies that have sued the search giant during the past five years: Google has no right to sell company trademarks for use as keyword triggers that elicit paid advertisements.

In addition to the assertions of trademark infringement and other claims, the lawsuit alleges Google engages in false advertising when it uses the words "sponsored link" to describe the ads it delivers. American Airlines asserts viewers can get the erroneous impression the AdWords ads were sponsored by the airline.

In a statement issued Friday, American Airlines said its action should not be construed as anti-Internet or anti-search marketing. "American Airlines appreciates and values the importance of the Internet and the convenience that companies such as Google create for consumers around the globe," said the company. It went on to insist its "business issue" with Google has nothing to do with Google's "overall business model" but only the way Google allows other companies to buy the right to use the airline's trademarks.

"In working through this business dispute, American is hopeful that it will continue professional, friendly and fruitful relationships with Google, while finding an appropriate resolution to the trademark issues," said the statement.

Google meanwhile issued a statement asserting its trademark policy "strikes a proper balance between trademark owners' interests and consumer choice, and that our position has been validated by decisions in previous trademark cases."

Previous infringement suits filed against Google include a high profile case brought by American Blind and Wallpaper Factory in 2004, and another by French-owned AXA.

Yet Santa Clara University Assistant Professor Eric Goldman, an attorney with expertise in Internet law, said those suits have yielded a mish-mash of rulings that leave search advertisers and trademark-owners with no clear guidance.

"There have been dozens of keyword advertising cases that have reached a variety of resolutions all the way from emphatic wins for the defendants to cases, like the American Blinds case [against Google], where they are going to a jury in November," said Goldman. "There have also been a number of settlements ... and the cases are completely lacking in any uniformity."

About the only thing different, and, therefore somewhat interesting, about the new lawsuit is the fact that it came from a large enterprise, said Goldman. "I thought it was interesting because of the players involved: Google, a company that is going to fight to the death over this, and American Airlines, a company with a large portfolio and a whole lot of money," said Goldman. "They decided to tangle with the tiger. They know what they're in for and they decided to spend the bucks anyway."

That part about fighting to the death is not an overstatement, in Goldman's opinion. Paid search is at the heart of Google's prodigious revenue and it's something it cannot afford to see undermined either through trademark lawsuit losses, court orders or government legislation. "Google has very deep pockets so they can afford to fight these vigorously," said Goldman. "This is a mission-critical issue for Google. If they are unable to sell trademark-enabled advertising ... if they were to slice that chunk of revenue off, they would notice."

The fact that the lawsuit was filed by American Airlines was seen by Mt. Pleasant, NY trademark lawyer Martin Schwimmer as being both ironic and instructive. Schwimmer said he often uses American Airlines as an example of the complexity involving trademark law and the importance of context in those discussions.

"If I said I went to Europe on American Airlines, you would understand I meant the brand," he noted. However, it's feasible somebody looking for information on carriers operating in the United States could do a search for "American airlines."

"It shows you the challenge and the confusion here," said Schwimmer.

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