Yahoo Settles Trademark Infringement Case With American Airlines

Yahoo Search/AA

Yahoo has quietly settled a lawsuit by American Airlines about the alleged use of its name to trigger search ads. The terms of the settlement were not disclosed.

The Yahoo settlement, arrived at last November, ends a legal dispute that dates back to October of 2008, when American sued Yahoo in federal court in the northern district of Texas for alleged trademark infringement. Both companies asked U.S. District Court Judge John McBryde last year to issue summary judgment in their favor.

But they resolved the case before McBryde ruled on the issue at the heart of the litigation -- whether search engines infringe on trademark by allowing one company to use another's name as a keyword to trigger pay-per-click ads. While many companies have sued over this type of practice, no search engine has yet been found liable for trademark infringement.

The only such case to go to trial, a lawsuit by Geico against Google, resulted in a win for Google on the key point. In that case, a federal district court judge found that Geico had not proven that consumers were confused when they entered "Geico" as a search term and the results page included paid ads for Geico rivals. Yahoo also was a defendant in that case, but Yahoo and Geico settled before trial.

Before settling the American Airlines lawsuit, Yahoo unsuccessfully attempted to have the matter heard in California. Yahoo argued that the airline, which is also an advertiser, was bound by its search marketing contract to litigate all matters with Yahoo in California, but the court ruled against Yahoo on that point.

A separate case by American Airlines against Google also ended in a settlement.

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