Thanks to the fabulous Kim Werker I heard earlier this week about a lawsuit filed by Cascade Yarns, Inc., against Crafts Americana Group, Inc., the parent company of Knit Picks, for trademark infringement, false designation of origin, unfair competition and dilution of trademark (you can see the filing here).
The lawsuit alleges that Knit Picks "purchased or requested" online advertising that appeared when people entered search terms that are copyrights of Cascade's into search engines. That's a convoluted way of saying that, for example, if someone typed "Cascade 220" into a search engine, they might see an ad for Knit Picks among the results, which could lead some people to believe that Knit Picks sells their yarn (which it doesn't) or lead them to click on that link and instead buy Knit Picks yarn when they initially wanted Cascade.
Cascade says that it is entitled to recover profits and costs based on the alleged infringement, as well as "enhanced damages" up to three times the amount of actual damages. The company also asks for an injunction against Knit Picks for any future use of its trademark.
All of that would be up to a jury if the case gets that far. A case back in 2006 (PDF) in which Cascade sued Knit Picks for naming a yarn "Sierra" was voluntarily dismissed, apparently when Knit Picks changed the name of the yarn in question.
This sort of case is interesting not just for the yarny world, but for the wider implications of whether a search engine can or should limit the use of keyword ads by competitors when those keywords are trademarked. There have actually been several other cases of this sort through the years, and last year one company sued Google over the practice of allowing competitors to buy ads keyed to trademarked phrases.
At the time Google said "our trademark policy not to monitor the use of trademarks in the U.S., Canada, the UK, and Ireland aims to provide users with choices relevant to their keywords. At the same time, we investigate trademark violations in ad text both as a courtesy to the trademark owner and to ensure that ads are clear to users." But trademark phrases have much more protection in the European Union, so it's possible in time such protection will come to businesses in the United States as well.
I bring this up not to start a debate on the relative merits of the companies in question, but to note that such questionable ads abound on the Internet, and to ask if you feel like a company is being misleading by having their ads show up when a person searches for a competitor's products? Have you ever been confused by clicking on a link you thought was for the product you were searching for only to end up someplace else?