Los Angeles – A U.S. federal appeals court has ruled that an
advertiser may buy search engine ads based on keywords that double as the
trademarks of its competitor, according to published reports. Management
software firm Advanced Systems Concepts sued rival Network Automation, after
the latter began purchasing Google (NASD: GOOG) and Bing (NASD: MSFT) search ads tied to the keyword
"ActiveBatch" — a trademarked product of Advanced Systems.

While a
lower court sided with Advanced Systems last year, the Ninth Circuit Court of
Appeals has overturned that ruling, and remanded the case back to the lower
court for reconsideration.

A three-judge panel of the Ninth Circuit said
that Advanced Systems failed to show that consumers would likely be confused by
the use of its trademarks in rivals’ search ads.

"Google and Bing have
partitioned their search results pages so that the advertisements appear in separately
labeled sections for ‘sponsored’ links," the judges noted in their ruling.

"A sophisticated consumer of business software exercising a high degree of
care is more likely to understand the mechanics of Internet search engines and
the nature of sponsored links, whereas an un-savvy consumer exercising less
care is more likely to be confused," the ruling states.



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