• by Wendy Davis  @wendyndavis, June 9, 2009

In a complaint filed Monday in the U.S. District Court in Nebraska, Google employee Keyen Farrell says he was libeled by Web marketing entrepreneur Jeremy Schoemaker, who allegedly accused Farrell of bypassing Google's AdWords procedures.

The dispute dates back to April, when Schoemaker sued Farrell for allegedly using the trademarked term "Shoemoney" in paid search ads. Schoemaker runs a blog, Shoemoney.com, and sells $99-per-month subscriptions to "Shoemoney Tools," which teach people how to run search campaigns, optimize sites for search engines and the like.

He alleged in his original lawsuit that Farrell infringed the Shoemoney trademark by using the name in the text of ads directing people to Myincentivewebsite.com. That site sells material that helps people run "incentive sites," which pay users to accept marketers' offers.

At the time, Google allowed people to use trademarks to trigger search ads, but didn't allow trademarks within the ad copy. Last month, however, Google changed its policy to sometimes permit trademarked terms in the body of the ad.

In addition to filing a lawsuit, Schoemaker allegedly wrote on his own site that Farrell had used his employee status to bypass the restrictions on trademarks within ads. He also allegedly called Farrell a "corrupt employee" in an interview with Search Engine Land, according to papers Farrell filed Monday.

Farrell alleges in his lawsuit that these remarks defamed him. People generally can't be sued for defamation for anything said in court or in official legal documents, but people can be liable for statements made outside of court -- such as comments to reporters.

Farrell also says in his lawsuit that he had relied on Google's own processes to ensure that his ads didn't violate any policies. "Without Farrell's knowledge, Google's internal review process failed to prevent the term 'shoemoney' from appearing in the text of some of the advertisements," he alleges in his lawsuit. He also alleges that the term "shoemoney" was inserted in the ads dynamically and without his knowledge.

Google said in a statement that there was no indication that any employee tampered with its trademark filtering process. The company said that ads with the "Shoemoney" trademark were unintentionally allowed to run "due to an unrelated human error."

Schoemaker said in a statement that Farrell's claims were without merit, and that he intended to defend against them. "Farrell's lawsuit is a transparent litigation tactic that he is using in an attempt to deflect attention from the trademark infringement allegations I previously made against him," Schoemaker stated. "This will not deter me from pursuing legal action against people who infringe upon my intellectual property for their own commercial gain."