The previous lawsuit that First Call had against Craigslist dealt with a trademark violation in May, and had to do with an ad that was put on the Craigslist site. First Call has a trademark for their name in the real estate business, and Craigslist agreed to post ads from a different real estate agency, AAA Apartment Locating, that contained the phrases "First call", "Call first" and "Call us first", which First Call says were deliberately used to confuse the customer. However, recently, First Call has decided to drop this lawsuit, but are still holding strong in a case against AAA Apartment Locating for trademark infringement.
This deals with trademark directly, although there is an interesting spin on who is liable for what. Craigslist didn't create the ads, they were merely a host. The article notes that this is the first time Craigslist has been sued for user created content, but it isn't the first time it has happened on the internet, citing Google and other search engines as repeat offenders, being sued for allowing ads to contain trademarked terms to gain hits. Even though AAA Apartment Locating could very easily be guilty, I don't think Craigslist would have been in much trouble, since websites are usually exempt from legal issues dealing with what is posted on them. This is probably why First Call chose to drop the lawsuit all together.
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