Does Google’s Adwords program violate trademarks? This very issue will be considered by a jury in a US district court, with a federal judge setting November 9 for jury selection.

American Blind & Wallpaper Factory (ABWF) contends that Google violates trademark laws by allowing competitors of ABWF to buy advertisements, tied to keyword web searches, using ABWF’s trademarks

The trial will be held in the United States District Court for the Northern District of California in San Jose.

In an April 18, 2007 decision denying Google’s motion to dismiss the case, the court wrote that “the evidence suggests that Google used (ABWF’s) mark with the intent to maximize its own profit … [and] ABWF has produced sufficient evidence of likelihood of (consumer) confusion (to allow the case to be decided by a jury).”

According to David Rammelt, the attorney representing ABWF, the downside of search is rarely discussed.

“The reality is that companies large and small are hurt when Google uses a company’s trademark, without permission, for the benefit of the company’s competitors and Google,” he said.

“This is the first time a jury will have the chance to hear how Google’s business model takes advantage of companies that have built the value of their trademarks through hard work and investment.”

Google’s Adwords” advertising program is said to account for more than 98% of Google’s $11 billion annual revenue. An adverse finding in the case for Google could have a negative impact on Google’s revenue.

ABWF thinks its case could also have a “large impact on all businesses that have spent time and money building brand names only to have their competitors take advantage of that effort through advertising on Google”.

Perhaps this is a case of Business 1.0 trying to fight back against the practices of Business 2.0, which seems to operate in a sea of uncertainty. Google certainly seems to be on the receiving end of this uncertainty, with it being the target of a regular stream lawsuits.

This case raises a number of thorny questions. Is it morally OK for a company to buy Google ads tied to competitors’ trademarks? Is the company really violating a trademark, or it just being a smart marketer? Is it any worse than a company erecting a billboard near the offices of a competitor?

Related:

Entry was posted on Saturday, May 12th, 2007 at 11:46 am under Google, Legal.

Read more entries by John Pospisil.
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