Google Inc. had sought a dismissal of the lawsuit, originally brought by Plymouth, Mich.-based American Blind and Wallpaper Factory Inc. in January 2004, which alleged that Googles AdWords program violates trademarks by allowing competitors to purchase keywords similar to its name.
In his 22-page ruling Wednesday, Judge Jeremy Fogel of the U.S. District Court for the Northern District of California denied Googles motion to dismiss.
"American Blinds claims [can] proceed beyond the motion-to-dismiss stage, which will enable the Court to consider both the relevant facts and the applicable law in the context of a fuller record," Fogel wrote in his ruling.
Trademark infringement, false representation, dilution and injury to business reputation, and unfair competition were among the claims against the Mountain View, Calif. search giant that were allowed to proceed.
According to Jocelyn Brittin, a partner at the law firm Holland & Knight LLP in McLean, Va., that first means the case will go through a discovery phase, in which both parties gather and submit evidence and possibly depositions around the suit. If there are then enough facts to support the case, it could go to trial.
Danny Sullivan, editor of SearchEngineWatch.com, wasnt particularly surprised by the ruling.
"It never appeared that the courts were going to stop this from going to trial," said Sullivan. "It isnt a big setback for Google; it doesnt suddenly change how things are already operating."
Brittin, who has followed the case but is not involved in it, wasnt surprised either. "Its a very preliminary ruling and it would have shocked me if the judge [had] ruled any other way," she said. "Normally, the only cases that get dismissed are those that dont have a prayer."
In fact, a U.S. District Court in Virginia late last year ruled that a similar suit brought against Google by Geico (the Government Employees Insurance Company) would also be allowed to proceed. In both cases, the courts were quick to point out that their respective rulings did not express an opinion as to whether Google would ultimately be liable, only that there was enough case law to support the suits claims. Google ultimately won out in the Geico case.
The American Blind argument, which actually began in 2002, is clearly a long way from closure. Though Google agreed to quit selling advertising for trademarks American Blind has registered, and the suit may go to trial as early as July, years of appeals could still be in store.
"Its going to continue to work its way up the line," said Sullivan. "Its going to be messy until the area matures and we find out whats legally allowed. We need the trials to do that."
Its also possible the case would never reach the trial phase, as Google could settle with American Blind out of court. But on the heels of its victory in the Geico case, its not clear whether Google would be willing settle and open itself up to a raft of new lawsuits based on similar claims. The company may wish to have a court ruling to decide the fate of its advertising practices instead.
eWEEK.com was unable to reach Google or American Blind for comment on the ruling.
The case is still in its early stages, but the final decision, whenever it comes, could change the face of online advertising, and especially for Google.
"Anyone selling paid listings will be impacted," said Sullvan.
"Googles whole business is built on this, so its life and death for them," said Brittin. "But I think its too early to read too much into this [ruling]."