Judge Brinkema's latest ruling found Washington, D.C.-based 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," adding 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" about the identity of the carrier.

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 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."

Flag: Recap

Head: What's The Beef?

Text:

A federal district court issued a key decision on a trademark challenge to the use of an insurer's name by others as an online search term or key word. The key findings were that:

o Under certain circumstances, U.S. trademark laws were violated by letting advertisers attach their ads onto Google Web searches for GEICO.

o Links that did not use the GEICO name would be legal.

o Left open the question of damages and who is liable–Google, or the advertisers who used the GEICO trademark.

o Postponed a trial on damages and liability for 30 days while the two sides hold settlement talks.