Trouble for domain-squatters, and for Google (GOOG): a federal court ruled the search giant can be sued for trademark infringement for placing ads on sites with names similar to registered trademarks.

Vulcan Golf named Google in a suit against the registrars of sites like vulcanogolf.com, which get traffic from typos and earn revenue through ads placed by Google's Adsense for Domains program. Vulcan alleges that since Google uses trademarked names, such as Vulcan, to deliver ads to the sites, they're on the hook, too. Vulcan is also pursuing Google under the 1999 anti-cybersquatting statute, passed to prevent people from registering domains for trademarks they don't own.

MediaPost reports that Judge Blanche Manning of the Northern District in Illinois dismissed parts of Vulcan's suit, but is allowing both the trademark infringement and cybersquatting allegations against Google to be heard in court. If it goes anywhere, Google, Yahoo and other ad networks could be on the hook for placing ads on potentially-infringing sites, pulling the rug out from an ecosystem of domain squatters, so-called "domain parkers" and link-dump sites so prevalent on the Web.