June 4, 2009

American Airlines Sues Yahoo! for Trademark Infringement Based on Sale of Keyword Advertising

By Elizabeth K. Brock, Principal

Three months after settling a similar keyword advertising case against Google, American Airlines has sued Yahoo! in the U.S. District Court for the Northern District of Texas (American Airlines, Inc. v. Yahoo! Inc., No. 4:2008-CV-626 (Oct. 17, 2008)).

Plaintiff American Airlines, the world’s largest airline, brought suit against search engine company Yahoo! and its subsidiary Overture Services, alleging five counts of federal trademark infringement, dilution and related causes of action under the Lanham Act and an additional six counts of various state law claims, including trademark infringement, dilution, unfair competition, misappropriation and unfair competition.

Search engine companies such as Yahoo! and its competitor Google earn revenue by selling advertisements shown on the search engine webpages and on the webpages of third parties. When a user enters search terms into Yahoo!’s search engine, the search terms are also used to provide advertisements related to the content of the user’s search. According to the complaint, Yahoo! allows its advertisers to buy “keyword” triggers to advertisements that include both generic terms and trademarks.

American Airlines alleges that Yahoo!’s search engine is being used by Yahoo! and others “to mislead consumers and misappropriate the American Airlines Marks by using them as ‘keyword’ triggers to paid advertisements and by using them within the text of paid advertisements.” The complaint also notes that Yahoo! has a different trademark policy outside the United States that prevents advertisers from using or purchasing as keywords the trademarks of others.

American Airlines seeks both equitable relief and damages, including preliminary and permanent injunctions against Yahoo!; a requirement that Yahoo! post corrective advertising on its websites; unspecified monetary damages, including punitive damages; attorneys’ fees; and costs required to run corrective advertisements.

Recently, American Airlines settled a very similar suit against Google. The parties did not disclose the terms of that settlement, but Google apparently has stopped the use of keyword advertising with American Airlines’ marks.

 

Reprinted with permission from INTA Bulletin, Vol. 64, No. 1 –  January 1, 2009, Copyright © 2009 the International Trademark Association.