Metaspinner sued in May, seeking to enforce a preliminary injunction imposed on the search engine over its unauthorised use of the trade mark "Preispiraten," meaning "price pirates," in AdWords.
AdWords allows advertisers to sponsor particular search terms so that, whenever that term is searched, the advertiser's link will appear next to the search results.
Metaspinner had accused Google of selling the trade mark "Preispiraten" to rivals, and already had been granted a preliminary injunction by a Hamburg Court to prevent trade mark infringement.
But according to an AP report, the case has now been dismissed. The ruling is not yet available, the reason for the dismissal has not been announced, and neither Metaspinner nor Google has commented.
The German dismissal comes days after a similar lawsuit was filed in the US by computer services firm Rescuecom, joining a number of ongoing US and French legal actions.
Google's policy towards the use of US and Canadian trade marks as sponsored terms in AdWords changed in April this year.
Previously the search engine respected requests from companies that asked it to prevent their marks from being available for sponsoring, and removed those for which it received a compliant; but in April, Google announced that it would no longer remove keywords connected with trade marks. Google said it would only act if a trade marked term was actually being used in the text of an advert.
The policy change only affects US and Canadian trade mark rights – so Google's original policy still applies throughout Europe.