Geico wants the court to enjoin Google from selling ads based on searches using Geico's name. Its lawyers argued yesterday that allowing such transactions infringes on its trademark.

Geico, a unit of Berkshire Hathaway based outside Washington, D.C., filed a lawsuit in May seeking $8.65 million from Google in alleged lost profits because of Google's practice of allowing other insurance companies to pay to appear as "sponsored listings" on the search results returned to consumers when they type "Geico" into the query box.

Geico also filed suit against Overture, a unit of Yahoo, but Overture settled the lawsuit last month. Terms of the settlement were not disclosed. But recent searches with the Yahoo engine did not contain ads from rival insurers.

Geico claims that the current system used by Internet search engines to raise revenues violates its trademark. "When a consumer enters ?Geico'?and goes to the sponsored link believing there's a connection, that is where the confusion arises," Geico attorney Charles Ossola of Arnold & Porter in Washington, D.C. told U.S. District Judge Leonie Brinkema as the trial began. The case is expected to last three days.

Geico lawyers argued that Google should not be allowed to sell ads to rival insurance companies that are triggered whenever Geico's name is typed into the Google search box.

Geico's argument is that Google's AdWords program, which displays the rival ads under a "Sponsored Links" heading next to a user's search results, causes confusion for consumers. Geico contends that illegally exploits Geico's investment of hundreds of millions of dollars in its brand.

But defending its business, Google told the judge that the ad policy is no different than supermarket cashiers providing coupons at the checkout for one product when a customer buys the same product from a different company.

Google attorney Michael Page said under trademark laws there was nothing wrong with that.

Google is facing similar lawsuits from other companies, including AXA, the French-based insurer which took over MONY in May.

Most consumers visit just one Web site when shopping for auto insurance, said John McCutcheon, Geico's assistant vice president of marketing, in testimony yesterday. He said if a consumer trying to find Geico is unknowingly steered to a competitor's site it meant Geico had lost an opportunity for a sale.

Did-it, a leading search engine marketing firm, said the trade infringement issue as shown by the suit brought by GEICO is the major one for the search engine marketing and advertising business in 2005. According to Did-it, a settlement changing Google policies could change the marketing landscape.

Story has been updated since first posted at 1:10 p.m. EST, Dec. 14.