• by January 26, 2004

Last week's settlement between Playboy Enterprises and AOL over trademark infringements in keyword advertising doesn't mean the issue is dead.

Far from it. The case could have real bearing on how search providers use trademarked terms in the future.

The case dates from 1999 when Playboy Enterprises accused Netscape, now an AOL product, of trademark infringement via an online ad system that offered marketers a list of keywords including the words "playboy" and "playmate." Both words are Playboy trademarks. Web surfers entering the keywords were served online ads from adult entertainment marketers other than Playboy, thereby potentially creating confusion. Netscape refused to remove the keywords. While the recent out-of-court settlement falls short of a legal ruling with teeth, it does suggest that trademarks can't be taken lightly on the Internet. The ruling should give the red-hot search category pause as trademark holders become more vigilant and litigous. Where trademark infringement suits pop-up, lawyers can't be far behind.