• by Wendy Davis , Staff Writer @wendyndavis, May 15, 2009

Google is throwing down the gauntlet to trademark owners with its move to allow search marketers to include competitors' trademarks in the ad copy.

For years now, Google has allowed trademarks to trigger pay-per-click ads, but hasn't officially allowed marketers to use those terms in the text of the ad. But late Thursday night, Google announced a change on the AdWords blog.

"Under certain criteria, you can use trademark terms in your ad text in the U.S. even if you don't own that trademark or have explicit approval from the trademark owner to use it," the company states. "For example, under our old policy, a site that sells several brands of athletic shoes may not have been able to highlight the actual brands that they sell in their ad text. However, under our new policy, that advertiser can create specific ads for each of the brands that they sell."

The move is almost certain to spark new lawsuits against the search giant -- which is already facing two potential class-action cases and a handful of other actions around the country.

Even though Google has fielded complaints about its trademark policy for years, weathering several lawsuits in the process, the legal issues surrounding the use of trademarks in search ads have never been definitively settled.

Google mostly prevailed in the one case that went to trial, a lawsuit by insurance company Geico. In that case, the judge found that using the "Geico" name to trigger a search ad wasn't confusing. But Google and Geico settled the portion of the case dealing with ads that used the word "Geico" in the text.

The lawsuits turn on whether the use of a trademark is confusing. Companies that sue tend to say that consumers who type in queries expect to see ads for the companies they're searching for. But others say that consumers are simply searching for information and, in some instances, are using the trademark as a proxy. That is, sometimes people search for "iPods" but really want information about any type of portable music player.

Google's defenders also argue that even if consumers are searching for a particular brand, there's no harm in Google also showing them information about a competitor -- provided it's not confusing.

Allowing trademarks in the ad copy in itself seems neutral. At times it might confuse people, but in other instances it might clarify that the advertiser is not affiliated with the trademark owner. Nonetheless, the trademark owners who are already gunning for Google are certain to view the policy as problematic.