American Airlines is seeking damages from Google Inc. for the use of its name in Google Ads. Selling search terms such as “AA.com” and “American Airlines” for other companies advertising using Google AdWords.“We are confident that our trademark policy strikes a proper balance between trademark owners’ interests and consumer choice, and that our position has been validated by decisions in previous trademark cases,” stated Jon Murchinson, a Google spokesman.
When a user searches for terms in the search engine like Aadvantage, American Airlines’ frequent flyer program, then American’s web site would show up at the top, but rivals would sometimes show up under the Sponsored Links section.
Google had a similar case against Geico. The judge ruled that Google’s keyword ads were legal, but Geico and Google settled the case in 2005. The judge ruled that Geico could collect damages for ads featuring Geico’s name in the ad text rather than the trademark used to trigger ads.
Given that this lawsuit is happening and that similar cases have happened in the past, I would not be surprised if Google reconsiders the way their AdWords/AdSense program is structured in terms of keyword usage and appearance. But Google might feel that it is worth it to fight how their keyword advertising model works in court. It comes with the terrority of being a major software company.
 Statesman.com: Airlines Sues Google Over Keyword Ads