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The airline complains that when computer users enter American's trademark terms such as "AAdvantage", the name of its frequent-flier program, in a search they can be directed to competitors who pay Yahoo for the traffic.
American filed its lawsuit last week in U.S. District court in Fort Worth for unspecified damages, legal costs and money to run a "corrective" advertising campaign.
Kelley Benander of Yahoo said, "We have confidence in our trademark policies and are prepared to defend them in court."
Tim Smith, a spokesman for American, said Tuesday that the airline is suing Yahoo to protect its intellectual property and prevent confusion among consumers.
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