The Motley Fool is reporting that Google is being sued by American Airlines for selling sponsored ads targeted at the keyword ‘American Airlines,’ a trademark of the airline. Here’s an excerpt from the full article, located on Fool.com:

To understand the situation a little better, fire up Google and punch in “American Airlines.” Google’s AdWords program serves up sponsored results along with the organic search-engine results. Online advertising accounts for as much as 99% of Big G’s revenues — it’s clearly a big part of the Google model.

Your mileage may vary, but when I searched this morning for “American Airlines” (in quotes, but it works just as well without them), I saw several third-party ads. The most prominent ad, at the top of the page, is for AMR’s own AA.com website. However, the column on the right features rival airlines and portals that promise discounted airfares.

The ads themselves don’t feature the American Airlines brand. However, the ads wouldn’t be on the page if the sponsors hadn’t bid on the trademarked term. To be sure, I logged into AdWords and saw that I could bid on the term “American Airlines” for as little as $0.04 per click. (Minimum bids vary depending on ad quality, even within the same keywords.)

Is this right? Is this wrong? The only thing for sure is that a lot of money is weighing on the answer.

What will make this one really juicy for the lawyers is that, with most searches on the web being case-insensitive (as far as I can tell–if someone knows differently, please feel free to comment), the trademarked term ‘American Airlines’ and the perfectly reasonable search for ‘american airlines,’ aka airlines offering service in america, are one and the same in a search engine’s mind.

Obviously, the larger issue is whether or not things like ‘Disneyland’ can be bought as a search term when trademarked by a company, but it’s a little more interesting in the case of American, whose decades-old choice of a name designed to build brand recognition might actually confound an already complicated issue even more.

Another interesting point that the article makes is that, if trademarks are ruled off-limits in advertising media like Google, it will also allow the trademark holder to withhold advertising funds from Google for those particular terms, as there would be little reason to advertise for a search term when no competitor could:

It is easy to see that Google could lose a lot of money if it caves in on these cases. If no one else is allowed to bid on “American Airlines” and other AMR trademarks, AMR has no reason to bid on it, either. It is the top organic search-engine result.

Of course, on a more personal level, I will be interested to see how this case is resolved, and what effect, if any, it will have on the blogosphere, many of whom rely heavily on Google AdSenseâ„¢ for their blog’s revenue stream.

adsense, adwords, google, american airlines, american, airlines, lawsuit, trademark, trade mark