American Airlines has dropped its trademark infringement lawsuit against Google, which claimed the Internet company used the airline's trademark to trigger paid advertisements for other companies.
In identical e-mail statements, American and Google said they have resolved the claims on "mutually satisfactory terms," although the terms remain confidential.
American filed the lawsuit last August in the US District Court for the Northern District of Texas, Fort Worth Division, saying it wanted to stop competitors from using its trademarks to trigger their own advertising on Google.
In October, the court denied a motion by Google to dismiss American's lawsuit.
Experts differ on whether Google made any concessions to persuade the airlines to drop the lawsuit. And, they said, it may have been as simple as American not having the money needed to take on Google in prolonged litigation.
On July 16, a day before the lawsuit was dismissed, AMR, parent company of American, released its earnings statement saying it had a second quarter net loss of US$1.4 billion, citing record fuel prices among others things.
"A lot has to do with the economy," said Ryan Gile, an intellectual property lawyer at Las Vegas-based Weide & Miller, in a interview. "It's an expensive battle. You stop this fight and you save a half million and maybe more in potential legal fees. Or maybe Google is going to put something in the functionality of their Adwords program to prevent anyone from purchasing an American Airlines trademark."
On the other hand, it's possible Google didn't make any special concessions to American to block keyword ads on their trademarks, said Eric Goldman, assistant professor and director of the High Tech Law Institute at the Santa Clara University School of Law. Goldman said Google may have made other concessions that the public will never know about. Or maybe American didn't want to spend any more time or money on the lawsuit.
"We're trying to read the tea leaves without a lot of data here," Goldman said. "It would help a lot if we got better signals on what happened. Did money move? Was there some kind of backroom deal? Did American decide to take its marbles and go home because it got what it wanted? Or did it decide to take its marbles and go home because it was never going to get what it wanted?"
While it may never be clear why the lawsuit was dismissed, Gile and Goldman agreed that the decision will disappoint followers of trademark issues who were hoping for a legal resolution to the case. Some in this field expected the case to go to trial, figuring that American had the resources to take on a powerful company like Google.
However, because the lawsuit was dismissed, it deprived "the trademark world of some additional case law that could have clarified the otherwise confusing jurisprudence surrounding whether or not the use of another company's trademark as keywords (either to trigger "sponsored links" or otherwise) constitutes trademark infringement," Giles said in a blog post.
This is not the first time a company has dropped a trademark lawsuit against Google. In September, American Blinds & Wallpaper Factory dropped a similar lawsuit against Google.