American Airlines is suing search engine company Yahoo! over the use of its trade marks to trigger adverts for competing airlines. The company has previously settled a similar case with Google.
American Airlines (AA) claims in its suit that its name and other trade marks it holds, such as AAdvantage and American Eagle are being used by Yahoo!'s advertising system in a way that violates their rights.
Search engine keyword advertising allows businesses to buy the right for their short text adverts to be displayed when someone searches for a certain term. AA claims that to allow a competitor to bid for its ad to be placed next to trade marked terms is an abuse of its trade mark rights.
"This law suit involves…efforts by certain companies to free ride on American Airlines' brands," said the lawsuit, filed with the US District Court for the Northern District of Texas. "[Yahoo! has] knowingly encouraged these infringements and have provided these companies with the technological tools to carry out these efforts."
"Without authorization or approval from American Airlines, [Yahoo! has] sold to third parties the right to use the trade marks and service marks of American Airlines or words, phrases, or terms confusingly similar to those marks, as 'keyword' triggers that cause paid advertisements ... to appear above or along side the 'natural results'," said the suit.
AA sued Google last year over the issue. The two companies are reported to have reached a settlement this year in which neither side paid the other. Associated Press said that US searches for AA's trade marked terms no longer trigger competitors' adverts.
Search engine companies have been more cautious about allowing the use of trade marked terms to trigger competitors' ads in Europe than in the US.
Protections for trade marks in this regard are generally stronger in Europe and companies have operated separate policies for Europe and the US in the past. Google, though, recently changed its policy to align it with that in the US and allow anyone to bid on the use of trade marked terms as triggers for advertising.
AA said that Yahoo! structures its advertising in Europe to "prevent the misuse of trade marks" and should do the same in the US.
"In contrast to its practices with respect to the use of trademarks in the United States, on information and belief, Yahoo! takes steps to prevent advertisers in many countries outside the United States from using as keywords the trademarks of others," the suit said.
AA said that Yahoo!'s trade marks policy's requirement that advertisers themselves agree that their search terms do not violate trademark law is insufficient protection against trade mark abuses.
The law in the UK has not been fully tested. Yahoo! was cleared of trade mark violation earlier this year by the High Court in a case brought by the owner of the trade mark 'Mr Spicy' in relation to food.
Triggered adverts had appeared, which the 'Mr Spicy' trade mark owner objected to. But the ads were in fact triggered by the term 'spicy' alone, so while Yahoo! was cleared of infringement, the case did not give definitive guidance on the issue.
Intellectual property law specialist Iain Connor of Pinsent Masons, the law firm behind OUT-LAW.COM, said that he believed that UK trade mark law forbade the practice of triggering adverts with another person's trade mark.
"In the UK, we believe that where a search engine allows a trade mark to be used as an trigger to generate a competitor's sponsored link, that would amount to an infringement by the search engine of the trade mark," he said. "Such use is likely to affect the essential function of a trade mark and take unfair advantage of that mark."