• by Wendy Davis  @wendyndavis, January 11, 2008

In the latest example of a marketer suing about search ads, 1-800-Contacts this week filed a lawsuit in federal court against LensWorld for purchasing search links triggered by the term "1-800-contacts."

The company, which has brought several other similar cases, says it's trying to guard against confusion. "The worry that they have is that these advertising methods will make consumers think there's an affiliation between these other companies and our client," said 1-800-Contacts' lawyer, Bryan G. Pratt.

But several courts have rejected that argument in other similar cases.

The stakes of these cases are high because a final ruling against the defense in any keyword bidding lawsuit could potentially curb the entire search marketing field. "In theory, we could have a court ruling that definitively concludes that buying a competitor's keywords is trademark infringement," said Eric Goldman, director of the High Tech Law Institute at Santa Clara University School of Law. "That would have a noticeable effect on the online advertising industry."

In one of best-publicized cases dealing with trademarks in online ads, Google prevailed over insurance giant Geico after trial in 2004. A federal district court judge in that case ruled that Geico hadn't proven that consumers were confused when they were shown links to Geico rivals after typing "Geico" into the query box.

Google in 2006 also won a major case brought by computer repair company Rescuecom. A federal district court dismissed that case before trial, ruling that rival companies' use of Rescuecom to trigger keyword ads doesn't violate trademark law. An appeal in that case is still pending.

But in another closely watched case, a judge in Texas in October ruled that an American Airlines trademark infringement lawsuit against Google could proceed to trial.

The lawsuit against LensWorld joins several other recent Utah lawsuits filed by 1-800-Contacts, which maintains its principal place of business in Draper, Utah. Pratt said some of the other cases already settled. Utah last year passed legislation making it illegal to use other companies' trademarked terms to trigger ads, but that law has yet to take effect.

1-800-Contacts lost a related case in 2005, when a federal appellate court ruled that the retailer's rivals could lawfully serve pop-up ads to consumers who had typed "1800contacts" into their browsers.