• by Wendy Davis  @wendyndavis, February 1, 2010

Ruling against AOL, a federal appellate court has said that online ad company Advertise.com can continue to use that name -- at least in the short term.

Late last week, a three-judge panel of the 9th Circuit Court of Appeals stayed an injunction that would have required Advertise.com to stop using its name, which allegedly violates AOL's trademark in Advertising.com.

The ruling grows out of a court battle between AOL and Advertise.com that dates back to August, when AOL sued Advertise.com for trademark infringement. AOL argued that Advertise.com was tricking companies into believing that it was affiliated with AOL's Advertising.com and Ad.com.

Advertise.com argued that whatever marks AOL owns to Advertising.com are "generic," and therefore, subject to cancellation.

In 2008, AOL changed Advertising.com's corporate name to Platform-A. But the company alleges that it still has trademark rights to Advertising.com and that it has applied for a trademark for Ad.com. The online ad company Advertise.com was called ABCSearch until 2009.

Earlier this month, U.S. District Court Judge Valerie Baker Fairbank in the central district of California issued a preliminary injunction requiring Advertise.com to stop using the name and also stop using design elements similar to Advertising.com. The portion of the order requiring Advertise.com to stop using design elements remains in place.

The 9th Circuit didn't give a reason for its 2-1 decision, which drew a dissent from Judge Carlos Bea. "The district court found that the large expenditures of time, effort and money to give (AOL's) name a distinctive character contrasted sharply with (Advertise.com's) 'Johnny-come-lately' adoption of a confusing mark," Bea wrote.