A court has ruled that a lawsuit over a company purchasing a rival's trademark as a search keyword should go to trial, in what could be the first case to scrutinise the trademark infringement liability of keyword purchasers.

Edina Realty sued rival real estate company TheMLSonline.com, accusing it of false advertising, trademark infringement and trademark dilution. According to the suit, MLS used "Edina Realty" in search terms purchased on Google and Yahoo!, in the text of the MLS ads that appeared on the two search sites, and in hidden links and text on the MLS website.

Eric Goldman, assistant professor of law at Marquette University Law School, wrote on his blog on Wednesday: "This case offers the first solid data point [in the US] that buying competitors' trademarks as keywords... could constitute trademark infringement."

A ruling issued last week by the US District Court in Minnesota said evidence of actual trademark dilution had not been provided in the case but that the case could go to trial because there were disputes on material facts with regard to whether the use of the trademark was causing confusion among consumers.

Goldman wrote: "This ruling puts increased pressure on Google's policy not to block competitor keyword ad purchases. Now that Yahoo! blocks these purchases, Google effectively stands alone in the industry, so it lacks any cover provided by prevailing industry standards.

"More importantly, Google's position has just become legally riskier. To the extent that competitors' ad purchases constitute direct trademark infringement, Google may face an elevated risk of being deemed a contributory infringer."

In September, auto insurance provider Geico settled a trademark lawsuit with Google over Google's sale of keywords using Geico's mark to Geico's competitors. Other cases are pending.

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