A short recap for those who are unaware of the incident that took place in early 2005, when a computer repair company Rescuecom sued Google, alleging that Google was violating trademark by selling ads to Rescuecom's competitors that show up next to search results when someone types in "Rescuecom." This lawsuite was dismissed by federal court on 28th September 2006, favoring Google. Eric Sinrod analysis the decision of judge. And here's his take on why the judge allowed Google to continue to accept bids on trademarked terms.
“Judge Mordue accepted all of Rescuecom's alleged facts as true and yet still found that none of these alleged facts established trademark use by Google…he came to this conclusion, in part, because "there is no allegation that (Rescuecom's) trademark is displayed in any of the sponsored links about which (Rescuecom) is concerned."
"There is no allegation that (Google) places (Rescuecom's) trademark on any goods, containers, displays or advertisements, or that its internal use is visible to the public," the judge concluded.
This ruling doesn't set a precedent but is definitely a strong win for Google.