April 24, 2007, 12:00 AM

American Blinds’ trademark case against Google will head to trial

U.S. District Court judge Jeremy Fogel is expected to set a trail date May 4 in the American Blinds trademark infringement case against Google.

Kurt Peters

Executive Editor

A ruling Friday by a U.S. District Court judge that a trademark infringement suit against Google can go to trial will be closely watched by the Internet retailing market.

Direct marketer and web retailer American Blinds, Wallpaper & More claims that Google violated trademark laws by allowing rival companies to buy the name and other trademarks of American Blinds as keyword search terms in order to appear as the top listing on Google’s search results page. “This is a very significant decision for us because now the case is closer to a jury to decide what’s right and wrong,” says American Blinds CEO Joel Levine. “We’ve invested millions of dollars in building our brand and we feel violated that another company can make money off of our sweat and hard work.”

In an earlier motion, Google asked the court to declare that as a matter of law Google’s sale of trademarked keywords in its AdWords program did not constitute use of commerce under the Lanham Act, which contains the federal statutes of U.S. trademark law.

But in his ruling Judge Jeremy Fogel stated that American Blinds, which owns and operates DecorateToday.com, No. 254 in the Internet Retailer Top 500 Guide, did present enough of an argument for the case to go to a jury. “The evidence suggests that Google used the mark with the intent to maximize its own profit so the intent factor favors American Blinds,” Fogel said in his ruling.

The case, now into its third year but headed for an expected trial date later this fall, is of wide interest to web retailers, which now spend as much as 50% of their online marketing dollars on pay-per-click advertising. “If Google loses, this is going to change their entire business model,” Levine says. “We’ve already spent millions of dollars just for the right to keep using our name. The outcome of this case can impact a lot more companies than just ours.”

Web retailers and other industry followers will be watching the case closely in part because existing case law pertaining to advertising keywords and trademark infringement is contradictory and vague. But Fogel also says the case can go to trial because of a larger public interest. “The large number of businesses and users affected by Google`s AdWords program indicates that a significant public interest exists in determining whether the AdWords program violates trademark law,” Fogel said in his ruling.

In a February filing, Google argues that its keyword tools do not use American Blinds’ trademarks. The filing by Google also maintains that the mark “American Blinds” is not enforceable against Google and that American Blinds is a descriptive mark and not an inherently distinctive one. “Even though American Blinds alleges that Google has infringed its trademarks for more than four years, ABWF has no evidence that a consumer has ever viewed a competitor’s ad triggered by one of its alleged trademarks thinking that the ad emanated from ABWF,” Google says.

Google, which generated advertising revenue of $10.5 billion in 2006, says it is confident of presenting a solid case in a jury trial. "Judge Fogel rightfully concluded that they did not prove that two of their marks are protectable, and we are confident that they will be unable to prove their remaining claims at trial,” says Michael Kwun, Google`s litigation counsel.

But American Blinds, which derives about 50% of its revenue from the web, says the eventual outcome will help web retailers do a better job of protecting their brand and trademark. “The case will prove that Google isn’t a god,” Levine says. “This issue isn’t going away."

Fogel is expected to set a trial date on May 4. “The Friday ruling addresses and ends Google’s novel and clever ways to avoid getting to a jury,” says David Rammelt, an attorney with Kelley Drye & Warren LLP, the law firm representing American Blinds.

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