The case was filed in a federal district court in Dallas, Texas in July this year, and has now been settled by a confidential agreement, the financial details of which were not disclosed.
Mary Kay took issue with the search engine over adverts that were generated when readers moved the cursor over certain words included in the body of their e-mails.
The direct seller uses a network of independent sales consultants to promote and sell its products and who often use e mails as a promotional tool.
According to Mary Kay, Yahoo’s advert system was hijacking and manipulating these e-mails, placing adverts with links to unauthorised product sellers who could then profit from the consultants promotion efforts.
In July, the company demanded that Yahoo stop the practice and called for monetary damages, as it alleged it was confusing to consumers and constituted a trademark infringement.
Keywords for ad generation
Automatic ad generation using key words and its relationship to trademark infringement is a hotly debated topic.
A European Advocate General recently stated that buying and selling trademarks as keywords to trigger sponsored links does not constitute an infringement.
Although, the opinions of the eight Advocates General are called upon by the European Court of Justice (ECJ) to help deliver judgements on cases presented to it, it is not obliged to follow their decisions, although in about 80 percent of cases it does.
Even if the opinion is accepted by the ECJ it does not mean that brand owners will not be able to win cases of this sort. Rather, it is an attempt to leave legitimate uses of the trademark open and recognises that although a company may hold a trademark it does not mean it has a monopoly over the word’s use on the internet.