Keyword Advertising using Third Party Trademarks Becoming a Thing of the Past?

In the wild, wild, west of search engine keyword advertising, companies have recently been safe using the trademarks of other companies to make their own ads appear. This has been true on Google in the U.S. so long as the third party trademark was not actually used in the resulting ad. With some recent litigation by American Airlines, this may be changing.

American Airlines recently ended a keyword advertising lawsuit against Google which yielded an undisclosed settlement agreement in American Airlines’ favor. The settlement apparently involved an agreement by Google to cease all sale of ads using the “American Airlines” search phrase. This appears to be the case because Google no longer displays ads for that search.

Three months after settling the Google case, American Airlines has filed a similar lawsuit against popular search engine company Yahoo!, claiming that Yahoo!’s company policy allowing advertisers to buy keyword advertising utilizing its trademark is leading to dilution of the American Airlines trademark and misleading consumers.

Because the advertisements that appear on the search results page are almost always for goods or services similar to those sought in the search, it is quite possible that a consumer may click on a link only to find themselves at a website that wasn’t the one they were looking for. In other words, a wrong click on a search results page for American Airlines might have landed users on a webpage belonging to a competitor or copycat. American Airlines is seeking monetary damages, punitive damages, and associated legal costs in the suit. They have also asked that Yahoo! remove the offending keyword ads, which it has already done.

Though there is no precedent-setting judgment, the American Airlines’ lawsuits may be setting the stage for a major shift in keyword advertising – and a favorable outcome for trademark owners.