Sunday, May 27, 2007

Critical Trademark Case to Be Heard in November

Google will face a jury for the first time over its "Adwords" program, after a federal judge set November 9, 2007 for jury selection in a historic trademark infringement lawsuit brought on behalf of American Blind & Wallpaper Factory, Inc. (ABWF).

The trial will focus on ABWF's contention that Google violates trademark laws by allowing competitors of ABWF to buy advertisements, tied to keyword web searches, using ABWF's trademarks. In an April 18, 2007 decision denying Google's motion to dismiss the case, the court wrote that "the evidence suggests that Google used [ABWF's] mark with the intent to maximize its own profit ... [and] ABWF has produced sufficient evidence of likelihood of [consumer] confusion [to allow the case to be decided by a jury]."

The closely watched case could have a significant impact on Google. According to Google's filing with the Securities and Exchange Commission, the "Adwords" advertising program accounts for more than 98% of Google's $11 billion annual revenue. "Adwords" is Google's proprietary program that enables its paying customers to use search terms, such as ABWF's trademarks, which trigger displays of advertisements of ABWF's competitors.

The case could also have a large impact on all businesses that have spent time and money building brand names only to have their competitors take advantage of that effort through advertising on Google. In addition, the outcome of this case will likely affect the consumers using Google's search engine who are bombarded with unsolicited advertisements when searching for a particular company.

ABWF, a leading company in the sale of custom window blinds and treatments and wall coverings, argues it has lost customers and significant revenue as a result of these trademark infringements. The trial will be held in the United States District Court for the Northern District of California in San Jose. Judge Jeremy Fogel is presiding over the case.

Kelley Drye & Warren, the law firm representing ABWF, and its lead attorney David Rammelt stated:

"The downside of search optimization based on use of trademarks is rarely discussed. The reality is that companies large and small are hurt when Google uses a company's trademark, without permission, for the benefit of the company's competitors and Google. This is the first time a jury will have the chance to hear how Google's business model takes advantage of companies that have built the value of their trademarks through hard work and investment."

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