Yahoo Fighting American Airlines Search Ads Lawsuit. What's The Upside? (YHOO)

If you type “American Airlines” into a web search engine and get served a search ad that points somewhere besides aa.com — like discount travel agency lowfares.com — is that trademark infringement?

American Airlines (AMR) says so, and last year sued Google (GOOG) over the ads. The two parties quietly settled, so when AA (AMR) turned on Yahoo (YHOO) next, we thought Yahoo would settle as well. But as Law Prof Eric Goldman notes, Yahoo is fighting back.

It’s hard to see the sense in Yahoo duking this one out. On one hand, if Yahoo really feels they have the legal high ground, slapping down the American Airlines lawsuit protects the company from copycat complaints that could eat into Yahoo’s business. But as Goldman notes, the law is very murky here: Do “nominative fair use” rules apply, “commercial referential trademark use,” or something else? When even the law school professors aren’t sure, Yahoo can’t be sure either. If AA makes a court figure this all out and Yahoo loses, then new lawsuits seem all but certain.

Meanwhile, it seems Yahoo isn’t even running the offending advertisements any more. The above graphic comes from an October screenshot when we first reported on the AA case. Search Yahoo for “american airlines” today and get the following:

f?id=49342ca9796c7ab500f5eb49

See Also: American Airlines Wants More Search-Settlement Money, Targets Yahoo

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.