Trademark lawsuit filed against Google keywords

A distributor of window blinds and wallpaper has filed a lawsuit against Google Inc., saying the search engine's keyword-based advertising violates its trademarks.

American Blind & Wallpaper Factory Inc., based in Plymouth, Michigan, filed the trademark lawsuit in the U.S. District Court for the Southern District of New York Tuesday. Codefendants in the lawsuit include Netscape Communications Corp. and Ask Jeeves Inc., sites that use Google's search engine.

American Blind argues that Google, by selling keyword-based advertising to competing retailers when Google users search on "American Blind" or "American Blinds" is violating the company's trademark. American Blind had threatened to file the lawsuit last year. That prompted Google, in a filing with the U.S. District Court for the Northern District of California Nov. 26, to argue that "American" and "Blind" and other words American Blind was claiming as trademarks are descriptive and shouldn't enjoy trademark protection.

The two companies had been sparring over the trademark dispute for about a year.

American Blind is asking the New York court for an injunction requiring Google to stop keyword-based advertising on its trademarks. The retailer is also seeking damages that are yet to be determined, said David Rammelt, American Blind's lawyer.

"Every time they've diverted a potential customer to one of our competitors, we've been harmed," Rammelt said. "American Blind has spent more that 50 years and US$70 million building its reputation."

American Blind has asked the California judge to throw out the request from Google that its keyword-based advertising model be ruled legal. A hearing is scheduled in there March 29. A Google spokeswoman declined to comment on the new lawsuit, saying the company was waiting for the outcome of the March hearing. "We've only just seen the complaint," she said Thursday.

Other companies, such as General Motors Corp. and National Car Rental System Inc. use generic words in their names and could be targeted for keyword-based advertising, Rammelt said. The American Blind lawsuit could have huge implications for keyword-based advertising and trademarks on the Internet, he added.

"Google has decided what trademarks it will honor and what trademarks it will not," Rammelt said. "You have decades and decades of trademark law, and it's trying to grapple with new technology."

American Blind has no problem with Google selling advertising to competitors when a user searches on the word "blinds," Rammelt said. But someone searching for "American Blinds" is looking for his client, he argued.

Earlier this month, Netscape settled a similar lawsuit brought by Playboy Enterprises Inc. In the 5-year-old lawsuit, Playboy sued Netscape for using its trademarks to deliver search engine advertisements. Terms of the settlement were not disclosed.