American Airlines, a unit of AMR Corp., dropped a trademark lawsuit against Google Inc. over the search engine’s use of the carrier’s name to trigger paid Internet advertisements for competitors.
The infringement case was dismissed yesterday by U.S. District Judge John McBride in Fort Worth, Texas, where AMR is based. Both companies agreed to pay their own legal fees in the case, which was filed in August. The settlement terms are confidential, AMR spokesman Tim Smith said.
American claimed Google violated its trademark by allowing competing airlines to bid on keyword searches that generate “sponsored link” ads on search-results Web pages. The ads take advantage of the American brand’s popularity, even if the name isn’t used in the ad, the carrier said.
Google spokesman Jon Murchinson didn’t immediately return a call for comment.
Google settled similar suits by other U.S. companies before the untested area of trademark law could be addressed by a judge or jury. Foreign lawsuits still pose challenges to the advertising practice, part of Google’s AdWords program.
Courts in France have held Google liable for allowing advertisers to select trademarked terms as keywords, according to U.S. regulatory filings. Google, based in Mountain View, California, said it is handling or recently resolved similar cases in Germany, Israel, Italy, Austria and Australia.
“Invisible” Use
Google had argued that its “invisible” use of trademarks isn’t technically “trademark use” under U.S. law. Google compared the program to practices such as placing generic drugs next to name brands in pharmacies and buying billboard ads next to those of competitors.
Geico Corp., the insurer owned by Warren Buffett’s Berkshire Hathaway Inc., settled a similar suit with Google in 2005. Another case, involving Internet home-decorating retailer American Blind & Wallpaper Factory Inc., was settled in August.
Some companies are suing each other for buying Google keywords. In August, 1-800 Contacts Inc. sued rival contact-lens retailer Lens.com Inc. in federal court in Salt Lake City. 1-800 Contacts sued Drugstore.com Inc. in February.