June 20, 2006

JP Enterprises, a Colorado-based company that owns and manages some dating Web sites has sued Yahoo and three other search engines for paying to have their ads come up when its name is typed into the Google search box.

JP Enterprises, which owns the LoveCity.com site, filed the lawsuit on June 6 in a U.S. district court in Colorado, accusing Yahoo, HDVE LLC, Spark Networks and Insight Direct USA of unfair competition and trademark dilution and infringement.

It seeks to recover damages and punitive damages.

Yahoo representatives did not return an e-mail seeking comment.

A Sparks Network representative said the company does not comment on litigation. A call to HDVE was not returned, and Insight Direct could not be reached for comment.

The lawsuit claims that Yahoo and the others inserted metatags containing the words "lovecity" and variations on that name as keywords into Google's AdWords paid search advertising system.

"Defendants' willful insertion of plaintiff's trademark into paid advertisements constitutes an effort to artificially inflate their profits by knowingly misleading consumers as to the source of the response to their search," the lawsuit said.

"It has caused, and continues to cause, actual confusion, is tarnishing the goodwill and reputation of plaintiff, and is causing lost sales."

A court ruled that a related case involving real estate companies could proceed to trial.

Google won a lawsuit filed by Geico that alleged that Google's search ad business encourages unlawful use of trademarks, but other cases are pending against the search giant.

Source: C-Net News