Elinor Mills at News.com reports that a case where a competitor purchases a trademarked name in its PPC campaign is going to go to court. Real Estate company, Edina Realty is suing TheMLSonline.com for using "Edina Realty" in their search advertising campaign. Edina Realty is suing for trademark infringement and trademark dilution and would be the "first case" to do so, in court.
Postscript: Also read Eric Goldman from Marquette University Law School thoughts on this here.
Postscript 2: Gary Price has posted the full-text of the case here.
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