After four years of locking horns with Google in court, Michigan-based American Blind and Wallpaper Factory has abandoned its unique trademark infringement case against the Silicon Valley titan.
The end comes just a couple of months shy of a scheduled trial date. Such a trial would have been the first time a jury took a crack at an important question in today's trademark law: whether a search engine infringes when it lets one company pay to place its ad alongside search results on a competitor's name.
In a settlement reached late last week, both sides agreed to halt their claims. American Blind won no concessions whatsoever.
American Blind's chief executive, Joel Levine, said Tuesday the company pulled out for financial reasons, and because American Airlines, which has more money in its litigation coffers, has recently filed a very similar suit.
"American Airlines is more well-suited to take on Google than we are," Levine said. "We sell blinds and wallpaper and that's what we do best. We're not litigators."
American Blind did hire some heavy hitters to handle the Northern California federal court case on its behalf -- New York-based Kelley Drye & Warren and Howrey. Google hired Keker & Van Nest.
Keker partner Michael Page said American Blind's decision wasn't just about money.
"They had a terrible case and they decided it wasn't worth pursuing," he said. "They quit and went home."
Indeed, American Blind suffered some serious setbacks this year, including being sanctioned in June for failing to preserve and hand over relevant documents. Magistrate Judge Richard Seeborg found that, "even though the evidence does not support a conclusion of intentional document destruction or that American Blind or its employees specifically intended to deprive Google of relevant evidence, the record demonstrates a willful indifference at American Blind towards ensuring that relevant documents were preserved, collected, and produced."
The company was ordered to pay Google $15,000 in compensation.
The judge also allowed Google to present evidence at the upcoming trial about American Blind's alleged purchase of its own competitors' trademarked keywords.
Levine, to whom Howrey attorneys referred all comment Tuesday, said the sanctions had "zero" effect on their decision to pull out of the litigation. The CEO pointed out that the case began when Google filed a declaratory judgment complaint against American Blind.
Levine said he thinks Google chose to file suit against American Blind because it is small.
"They chose us," he said. "It's a legal strategy. They picked a sizable company but not a huge one."
Keker's Page disputes this, saying Google filed suit only after American Blind had been threatening to sue for 18 months.
"We didn't pick them because they were a small guy," he said.
In April, U.S. District Judge Jeremy Fogel found that two of American Blind's allegedly infringed trademarks were not well-known enough to support a trademark infringement case. This greatly limited the number of marks at play in the litigation.
Courts across the country have given mixed rulings on whether the search engine advertising model at issue -- which, for Google, is called AdWords -- constitutes trademark infringement, said Eric Goldman, a professor at Santa Clara University School of Law. All other cases of this nature have also ended pretrial, said Goldman, who closely tracks such litigation.
Google has not yet filed a response to American Airlines' complaint, which was brought in North Texas.