September 5, 2007, 12:00 AM

American Blind settles out of court with Google

Though a November trial date had been set, Google Inc. and American Blind & Wallpaper Factory Inc. have settled their trademark infringement dispute.

With a November trial date looming, Google Inc. and American Blind & Wallpaper Factory Inc. have settled their trademark infringement dispute.

In a two-page settlement document filed with the U.S. District Court for the Northern District of California in San Jose, both sides agree that American Blind’s claims against Google would be dismissed and that each side will pay their own legal fees.

In the three-year-old court case American Blind claimed that Google violated trademark laws by allowing rival companies to buy the name and other trademarks of American Blind as keyword search terms in order to appear as the top listing on Google’s search results page.

But American Blind decided to settle the suit for economic reasons. “Even though American Blind has prevailed on Google’s repeated attempts to get ABWF’s claims dismissed as a matter of law and was going to be the first trademark owner to get these issues to a jury trial, ABWF made the business decision to put its time and money into its business rather than into completing this case,” the company says.

In May U.S. District Court judge Jeremy Fogel had set a date of Nov. 9 for jury selection to begin in a trial. But American Blind CEO Joel Levine says the time was right for a settlement. “We didn’t want to have to fight this for the next 20 years or until Congress decides to act,” says Levine. “Now was the time to walk away.”

Google had said in court that its 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. The settlement with American Blind did not result in Google having to make any changes to its pay-for-click and advertising program, which generated revenue of $10.4 billion in 2006.

“From the start, we’ve said that American Blind & Wallpaper Factory’s claims were baseless, and that Google’s trademark policies are perfectly reasonable and lawful,” Google says.

American Blind says that even though the current litigation is over the company isn’t afraid of using the courts once again if other competing retailers attempt trademark infringement. “We still believe that what Google does is wrong but this is no longer our fight,” says American Blind. “Our competitors should know that our settlement agreement with Google in no way limits our ability to object and seek legal relief if they continue to buy our trademarks as key words from any search engine, including Google. We have always diligently protected our marks from this conduct and will continue to do so.”

Google also faces legal challenges from other companies, including American Airlines. In August American Airlines became the latest company to sue over search engines placing competitors’ ads next to search results for trademarked terms. American Airlines filed a federal court suit against Google, even though Google and other search providers have prevailed in similar suits in U.S. courts.

American argues that competitors should not be allowed to bid on keywords that result in paid search ads from airlines like United and Delta or comparison shopping sites like Expedia appearing when someone searches for American Airlines.

“American Airlines’ decision to file the same claims against Google made the decision by our company that much easier,” says American Blind, No. 275 in the Internet Retailer Top 500 Guide.

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