Google Inc. won a major legal victory Wednesday when a federal judge said the search engine could continue to sell ads triggered by searches using trademarked company names.
U.S. District Judge Leonie Brinkema rejected a claim by auto insurance giant Geico Corp., which argued that Google should not be allowed to sell ads to rival insurance companies that appear whenever Geico's name is typed into the Google search box.
Google derives a major portion of its revenues from selling ad space to businesses that bid on search terms used by people looking for information about products and services online.
Geico claimed 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 and illegally exploits Geico's investment of hundreds of millions of dollars in its brand.
"There is no evidence that that activity alone causes confusion, " Brinkema said, in granting Google's motion for summary judgment on that issue.
But Brinkema said the case would continue to move forward on one remaining issue, whether ads that pop up and actually use Geico in their text violate trademark law. Google contends that its policies expressly forbid advertisers from using trademark names in the text of their ads. The search engine says it does its best to prevent ads that violate the policy from sneaking in, and that the advertisers would liable for any trademark violation, not Google.
Brinkema said she would halt the trial at this point to put a decision in writing and she encouraged both parties to try and settle the remaining issues.