Google Sued Over Search Advertising Practices

American Blind and Wallpaper Factory alleges that Google infringes on its trademarks by allowing competitors to bid on certain keywords for high placement in paid search results. Google search partners, including AOL, also are targeted in the suit.

Alleging that Google Inc.s search advertising practices violates trademark law, a home decorating retailer is taking Google to court over its use of certain keywords to trigger competitors paid search results.

American Blind and Wallpaper Factory Inc., in a lawsuit filed Tuesday in U.S. District Court in New York, isnt stopping with Google. It also named five partners who use Googles search results as defendants, claiming those companies profit along with Google from the alleged infringement. The other defendants were America Online Inc., AOL subsidiaries Netscape Communications Corp. and CompuServe Interactive Services Inc., Ask Jeeves Inc. and EarthLink Inc.

American Blinds case revolves around Googles AdWords program, where advertisers can bid on keywords in order to receive a high ranking on paid search results. The Plymouth, Mich., retailer alleges that Google infringes on its trademarks by allowing its competitors to bid on keywords that are similar to its trademarks. These terms include "American Blind," "American Blinds" and ""

American Blind is seeking both a temporary and permanent injunction barring Google and its partners from selling keywords that match or are similar to its trademarks or from displaying competitors search results when such terms are entered, according to the lawsuit. The retailer also is asking for damages, including any profits earned as a result of the alleged infringement and punitive damages.

The lawsuit is the culmination of a dispute between American Blind and Google that began in 2002. According to court filings, Google in September 2002 agreed to block advertisers from using three keywords that directly match American Blinds trademarks—"American Blind & Wallpaper Factory," "American Blind Factory" and "DecorateToday."

But the Mountain View, Calif., search company has defended the use of more generic terms in its keyword advertising program. In November, it took a preemptive step in the dispute by asking the U.S. District Court for the Northern District of California to rule that its keyword advertising policy does not infringe on trademarks. American Blind on Wednesday said it also had moved to dismiss that lawsuit.

A Google spokeswoman said the company is still reviewing the trademark infringement lawsuit and is "in a holding pattern" until there is a decision regarding its California filing.

In a statement, American Blind Chief Executive Officer Steve Katzman said his company was left with no choice but to sue in order to stop the alleged infringement from continuing to harm its brand and business. He also said the case could have far-reaching implications for other companies that hold trademarks with descriptive terms.

"We spent millions of dollars to build brand awareness and cannot stand idle while Google allows our competitors to ride our coat-tails," Katzman said in the statement. "Weve worked hard at building our online business and cannot allow those efforts to be undermined so Google can make a profit."

American Blinds lawsuit comes as Google prepares for a highly anticipated initial public offering, expected this year. Google and other search providers have reaped much of their profits from the rapidly expanding search advertising market.