Less than a week after Google made its controversial announcement regarding Adwords and the new trademark policy , a lawsuit in the US threatens to undermine its position.
Computer repair company Rescuecom is suing Google for allowing its competitors to purchase adverts that appear when somebody searches for "rescuecom", a trademark.
The act of trademarking a term is to prevent other companies from trading falsely under the term - the issue in this case is whether the fact competitors are bidding on the trademarked keyword is going to cause confusion in the marketplace.
Apparently the judges are divided on the case so far and have not dismissed it - if Google was to lose then they may have to revise their policy totally.
According to ars technica:
"If Google's lower-court victory is upheld, it could have significant implications for the future of online trademark law. It would reinforce the WhenU precedent and could prompt other circuits to reconsider their own rulings, which have been more favorable to such trademark claims.
"On the other hand, if Google loses, the case would go back to the lower court for a trial and would probably find its way back to the Second Circuit after the trial was completed. In that case, the controversy could easily drag on for the rest of the decade."