SAN FRANCISCO — A home decor merchant has dropped a federal lawsuit attacking Google Inc.'s practice of connecting some online ads to trademarks, handing the Internet search leader its latest legal victory on the prickly issue.
American Blind & Wallpaper Factory Inc. agreed to abandon the nearly 4-year-old case without receiving any payment from Google, according to a settlement dated Aug. 31. The truce also stipulated that Google wouldn't change its long-standing policy that let advertisers place ads tied to a rival's trademark.
The settlement averted a trial that was scheduled to begin Nov. 13. The two sides agreed to cover their own legal costs.
"We are very pleased with this outcome," said Michael Kwun, a lawyer for Mountain View, Calif-based Google.
An attorney for American Blind & Wallpaper didn't immediately return phone calls.
The suit targeted one of the ways Google makes money from its widely used search engine.
Under the practice, a search request for a specific business such as American Blind & Wallpaper triggers commercial links from competitors that bid for the right to show ads under specific terms, or "keywords." Google gets a commission when visitors click on the links, which accompany the main search results.
Several companies have sued Google, unsuccessfully, in U.S. courts to prevent their trademarks from being used as advertising keywords. Google has lost similar cases in France.