GEICO announced that a federal judge ruled today that Google activities under certain circumstances violated U.S. trademark law by letting advertisers attach their ads onto Web searches for the Washington-based insurer.
The ruling came from Judge Leonie Brinkema at the U.S. District Court for Virginia's Eastern District in Alexandria, who made her long-delayed ruling based on the evidence she heard during a non-jury trial in December. Google late last year had lost a motion for summary judgment in the case.
Judge Brinkema's latest ruling found GEICO had established "a likelihood of confusions, and therefore a violation of the Lanham [trademark] Act, solely with regard to those sponsored links that use GEICO's trademarks in their headings or text."
Links that did not use the GEICO name would be legal.
The judge postponed the trial of the issue for 30 days while the two sides hold settlement talks.
If no agreement is reached between the two sides in the next month, the trial will continue as to the amount of damages and on the issue of who is liable, Google, or the advertisers on Google.
Jonathan Shafner, a senior counsel of GEICO, said the ruling, which gave something to each side, was a very "narrow holding limited to the facts in the case" and that GEICO looks forward to arguing the broader trademark issues in future cases.
Charles Davies, GEICO's general counsel, said in a statement that in light of the decisions, "search engines and their advertisers should consider their potential liability if they intend to use other companies' trademarks in paid search advertising."
GEICO's original trademark suit included Yahoo as a defendant with Google. Yahoo, however, reached a settlement with the company after which searches for GEICO did not reveal rival insurer content.
The original complaint said the two Internet search engine firms were selling its trademarked GEICO and GEICO Direct names as search terms or key words to advertisers.
It was alleged that GEICO trademarked names were being sold to "advertisers who have no connection to GEICO and who seek to drive Internet traffic to their own Web sites when consumers perform a search using one of the famous GEICO Marks."
Google, in response, said that a GEICO survey of consumers about ads placed with the keyword "GEICO" without the word "GEICO" in the title or text of the ad found that "not one of those consumers was confused."
The search engine firm, based in Mountain View, Calif., contended that even if an advertiser was infringing on the copyright, Google did not "induce that infringement. The advertiser is not writing its text at Google's urging, and it is not acting as Google's agent."
Google could not immediately be reached for comment.
Mr. Davies promised that GEICO would "aggressively enforce its trademark rights against purchasers of its trademarks on search engines and against search engines that sell GEICO trademarks to advertisers."
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