Google Inc. has settled a lawsuit with “American Blind & Wallpaper Factory” over its search ads, bringing a four-year long dispute to an end…
San Francisco — The plaintiff in a long-running trademark infringement lawsuit against Google Inc. agreed on Friday to drop its case targeting the Web search advertising leader’s core business, about whether its keyword-advertising policy infringed trademarks, according to court filings.
“Eric Goldman, director of the High Tech Law Institute at Santa Clara University, said the outcome amounted to a “stunning victory” for Google.”
American Blind & Wallpaper Factory Inc., a reseller of home decorating materials, sued Google four years ago that Google’s AdWords program — advertising on Google’s Internet site that is linked to brand-name search results — by illegally allowing rivals of the company to buy the right to use search keywords like “American Blind” that are protected trademarks.
“The suit, filed in 2003, was scheduled to go to trial in the U.S. District Court for Northern California in November.”
A verdict that found Google had infringed trademarks could have had major implications for Internet advertising.
However, the Michigan company ran into a big problem in April when Judge Jeremy Fogel, of U.S. District Court in San Jose, said in a pretrial ruling that the company’s trademarks – “American Blind” and “American Blinds” – were descriptive terms and unenforceable.
Fogel did allow the case to proceed, however, based on three other trademarks, “American Blind Factory,” “Decorate today” and “American Blind & Wallpaper Factory.” Fogel also noted that there is a significant public interest in determining whether Google’s advertising program violated trademark law.
“Google said no payment had been included in the settlement and will not have to make any changes to Adwords’ rules.”
Google agreed not to make any changes to its AdWords trademark policy that would adversely affect American Blind in exchange for the company’s dropping its claims, according to the agreement signed yesterday.
“From the start, we have said that American Blind and Wallpaper Factory claims were baseless, and that Google’s trademark policies are perfectly reasonable and lawful,” Michael Kwun, Google’s managing counsel, said in a statement. “Now, with trial approaching, American Blind decided to withdraw all of its claims.”
David Rammelt, a lawyer for American Blind, based in Livonia, Mich., did not return a message seeking comment.
In June, Google won a ruling imposing a $15,000 fine against American Blind because the company failed to provide Google with documents in the case.
The settlement is one of a string of U.S. lawsuits where Google has successfully defended its practice of allowing advertisers to bid for keyword search words, even for trademarked terms.
Google has lost similar trademark cases in Europe; however, no definitive ruling has been entered in the United States.
“After almost four years of litigation, the American Blinds lawsuit ended today with a stunning victory for Google,” wrote Goldman, in commentary on his widely read legal blog.
In a settlement agreement signed by officials of both companies and dated Friday, August 31, American Blind & Wallpaper Factory Inc and Google Inc agreed to dismiss the federal litigation, with prejudice.
Neither party accepted liability or wrongdoing and the parties will pay their own legal costs. American Blinds stipulated that Google was paying nothing and making no change in policy in order for American Blind to settle the case. It also agreed not to assist other parties in suing Google.
Goldman said in an interview that the Michigan Company spent a huge amount of money – potentially more than $100,000 – and ended up losing two valuable assets.
In a posting on his blog, Goldman concluded that the case “demonstrates again that bringing keyword-related lawsuits can be a sucker’s bet.”
American Blind could not be reached for comment.