Playboy and AOL Settle Search Advertising Case

Playboy and AOL settled a 5-year-old lawsuit, after a federal appeals court ruled that AOL/Netscape could be held liable for the unauthorized use of trademarks in search engine ads.

The Ninth Circuit U.S. Court of Appeals in San Francisco found Playboy can further escalate charges that Excite and Netscape violated its trademark by selling banner advertisements displayed when a user searches for the keyword terms “playboy” and “playmate.”

The decision reversed a district court ruling that dismissed the suit without a trial in 2000. The settlement also puts an end to a case that likely held barring on many recent suits related to search engine advertising.

The “keying” practice of attacking your competition via buying search term advertisements for their names or trademarks in search engines has been somewhat common proactice since the beginning of search advertising. Some media buyers even buy mispellings and URL “keywords” of their competition.

With the rising popularity of keyowrd search advertising, especially with Google AdWords and Yahoo’s Overture Services becoming commonplace in the media buyers’ marketing plan, this suit may play a very important part in deciding the future of competitive keyword advertising.

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