That's a question being asked in courts not only in the United States, but also in places like France and Germany.
While Google prevailed in a trademark case in Germany, they haven't been as successful in French courts.
A recent loss in France over the use of trademarks in Google advertising has the search company considering appealing the trademark decision.
I'm not sure how successful such an appeal would be, but it seems like something that the search engine giant needs to pursue.
The high court in central Paris awarded the damages in a decision late Friday and ordered Google to stop displaying advertisements for Vuitton's rivals whenever Internet users typed Vuitton's name or other trademarks into the search engine.
So, what is the status of the use of trademarks in targeted advertising through a program like Google's? I know that it's almost impossible to police the web for all trademarks registered on a mix of international, federal, and state levels. It has to be even more difficult to know which words might be trademarks by the exercise of common law, without registration anywhere.
Should it make a difference if a company possessing a trademark contacts a Search Engine that has been enabling someone to bid on that company's trademark, and asks them to stop?
Is the bidding on competitor's trademarks the type of thing that can cause consumer confusion, or dilute the trademark, or both?
Interestingly, the French ruling seems to have been followed on all of the Google sites, not just the French version. Searches on the main Google page no longer show advertisments for the trademark that had been targeted by advertisers of Google's ad program.
For other French cases that have been brought against Google's adwords program on trademark grounds, see:
Le Google France Blames the Americans
AXA Challenges Google's Business Model
Google loses trademark dispute in France
In American Courts, there are also at least a couple of pending cases against Google by trademark holders who don't want their trademarks used as targeted terms for advertising by the search engine. There was a recent ruling in a case brought by the insurance company Geico, which Google seems to have one.
But, that ruling was in one district court in the United States, and it's possible that a judge in another district could come up with a different ruling. I haven't heard much about the litigation between Google and American Blind, but that doesn't mean that the parties involved aren't watching the legal actions in France carefully.
One of the points raised in the latest French case, by the judge ruling over the matter was interesting. The court stressed that since Google's keyword suggestion tool was what offered the trademarked term to the advertisers, Google may have to revamp its suggestion tool.
Here's one of the items raised in another litigant's case, from the complaint in rescuecom's trademark suit against Google:
The so-called "Sponsored Links" do not always clearly identify themselves as advertisements, and Google's layout of the ads does not conspicuously identify them as such. This is particularly true of the Sponsored Links which appear at the top of the Search Results. These ads at the top of the Search Results are designed by Google to look like part of the "non-sponsored" Search Results, and by virtue of the fact that they appear at the top of the list of Search Results, Internet Users may infer that they are the most relevant websites on the Search Results page.
Is this the type of thing that makes a difference?
Maybe even more importantly, the rescuecom complaint also raises an issue involving Google's suggestion tool, and its suggestion that the trademarked name be used as a target of advertising:
Upon information and belief, defendant Google has used an online program called a "Keyword Suggestion Tool" to suggest to one or more of Rescuecom Corporation's competitors that they should use the Rescuecom trademark as a Keyword for their advertising. Google's suggestion is designed to make such competitors' advertising more successful, and therefore more profitable for Google, by intercepting and diverting customers and potential customers of Rescuecom Corporation to others.
I'm not sure that was an issue that was raised in the Google versus Geico matter. This seems to have made a difference to a French judge. Will it have the same impact upon an American one?