By Gina Keating

LOS ANGELES (Reuters) - American Airlines, the world's largest airline, said on Friday it sued Internet search leader Google Inc for selling search words involving its name.

The claim is the latest in a string of cases filed worldwide by businesses that argue Google's pay-per-click advertising system, its main source of revenue, is used unfairly by competitors to grab business.

The Web search company has prevailed in at least two similar U.S. cases, including a lawsuit brought by auto insurer GEICO, but still faces trial later this year in California by American Blinds and Wallpaper as well as overseas claims.

The American Airlines lawsuit, filed on Thursday in the U.S. Court for the Northern District of Texas, accuses Google of violating trademark laws with its practice of selling search terms such as "American Airlines" or "AA.com" to other companies for advertising.

The airline accuses Google of selling the right to use American Airlines' trademarks and service marks or "words, phrases, or terms confusingly similar to those marks" to competitors who then direct searchers to their own Web pages.

"This lawsuit involves...efforts by certain companies to free ride on American Airlines' brands through use of Google's technology," according to the filing.

Google believes it's on solid ground.

"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," Google said in a statement.

American Airlines, a unit of AMR Corp , said it does not want to prevent the display of search terms, but wants Google to stop selling its trademarks and related terms.

Google also lost a ruling in a French court last year by luxury goods maker Louis Vuitton SA , and last month was accused by the Australian Competition and Consumer Commission of promoting deceptive business practices.

(Additional reporting by Chris Reiter, Michele Gershberg)
© Copyright 2007 Reuters.

Photo:
An aircraft from American Airlines sits at JFK International Airport in New York, August 10, 2006. American Airlines, the world's largest airline, said on Friday it was seeking damages from Internet search leader Google Inc for selling search words involving its name. REUTERS/Chip East