GEICO Gets Go-Ahead On Trademark Suit Against Google, Overture

The judge in GEICO’s trademark infringement case against Google and Yahoo’s Overture division has declined the defendants’ motions to dismiss, effectively giving the go-ahead to a case with big implications for search engines’ use of trademarks as advertising keywords.

“We find that plaintiff has sufficiently alleged that defendants use plaintiff’s protected marks in commerce,” Judge Leonie M. Brinkema wrote in a 14-page decision on the defendants’ motion to dismiss. The case is being heard in U.S. District Court for the Eastern District of Virginia.

“We believe the suit is without merit and will continue to defend against it vigorously,” said Steve Langdon, a Google spokesperson. Overture said it didn’t discuss pending litigation.

The judge did grant Google’s and Overture’s motions to dismiss state law claims of tortuous interference with prospective business advantage and statutory business conspiracy.

The use of trademarks to trigger keyword-targeted advertising has long been a controversial issue, but it has yet to be completely resolved. The most high profile of ongoing cases is American Blind and Wallpaper’s suit against Google. Judge Brinkema’s decision represents a victory for GEICO in that its case can proceed, but GEICO must still prove its claims in court.

“The judge rejected the argument advanced by Google and Overture that they should not be subject to liability for allowing their advertisers to bid on the GEICO marks and, in the words of the judge, ‘pay defendants to be linked to the trademarks,'” GEICO wrote in a statement. “We look forward to the opportunity to prove at trial that this unauthorized use of GEICO’s well-known trademarks is unlawful and should be stopped.”

Google has seen more legal action than Overture on the trademark issue thus far because it has been less stringent in policing its advertisers’ use of trademarks. In an effort to sidestep the issue — because it contends its advertisers, and not the company, are liable if they infringe upon trademarks — the company recently liberalized its trademark policies in the U.S. Overture, for its part, has editorial review of its advertising, and advises that trademarks can only be used in certain ways — such as for comparative advertising.

GEICO had filed suit in April, alleging trademark infringement and dilution. It sought an injunction preventing the search companies from allowing advertisers to bid on its trademarked terms “GEICO” and “GEICO Direct.”

“The GEICO marks are unique, inherently distinctive and famous designations of the source of GEICO’s auto insurance services,” wrote GEICO in its complaint. The plaintiff alleged that the defendants’ sale of its trademarks as keywords has resulted in confusion for consumers who were attempting to contact the company or learn about its insurance rates.

Trademark attorney Martin Schwimmer thinks arguments over “contributory and vicarious liability” will be especially interesting to watch as the case moves forward. GEICO argued that Google and Overture should be held liable when advertisers use trademarks as keywords to trigger their paid listings. The company alleges that Google and Overture have control over the content of ads and therefore contribute to any infringement.

“The issues of vicarious and contributory liability are important ones,” said Schwimmer. “It’s good for the development of jurisprudence that these parties are going to have to gather evidence and develop their cases. There isn’t specific case law yet, and it’s an important issue. As a neutral observer, I’m looking forward to more decisions.”