Trial set for Google ad trademark case

By Eric Auchard

SAN FRANCISCO (Reuters) - A U.S. judge on Friday ordered Google (GOOG.O) to face a jury trial in a trademark infringement suit that targets the workings of the Web search leader's main source of revenue.

David Rammelt of the Kelley Drye & Warren, lead attorney for plaintiff American Blinds, said U.S. District Judge Jeremy Fogel of the Northern District of California had set November 9 for jury selection.

American Blind & Wallpaper Factory Inc., the top U.S. reseller of window blinds, charged in its lawsuit, originally filed in 2003, that Google abuses trademarks by allowing rivals of a company to buy ads that appear when consumers search the Web for information on that business.

Last month, Fogel dismissed some parts of the original complaint but allowed others, in a ruling that said the public has an interest in whether AdWords, the company's pay-per-click advertising system, violates U.S. trademark law.

AdWords is the popular online system which serves up ads tied to searches users perform on Google or Google-affiliated sites. The program accounted for 98 percent or more of the company's $10.6 billion in revenue last year.

American Blinds complaint argues that Google's system violates trademark law by allowing competitors of American Blinds to use Google's system to buy keyword search terms, such as "American Blind," which trigger ads from rival companies.

"This is going to the first case where the keyword advertising problem is being submitted to a jury," Rammelt said.

Google has prevailed in two prior U.S. trademark suits filed against its pay-per-click advertising program.

Auto insurer GEICO settled a federal case in Virginia after a judge ruled partly in Google's favor, and computer repair site Rescuecom lost a similar federal case, but is appealing.

Last year, however, it lost a ruling in a French court on related issues in a trademark case brought by luxury goods retailer Louis Vuitton.

A Google spokesman was not immediately available to comment.

Google still has a motion for sanctions against American Blinds pending before Magistrate Judge Richard Seeborg, in the same federal court, alleging that American Blinds failed to disclose key evidence.

"We are confident that they will be unable to prove their remaining claims at trial," Michael Kwun, Google's litigation counsel said in an April 18 statement following Fogel's earlier ruling.