Geico, Google Settle Trademark Dispute

Geico has settled its trademark dispute with Google, leaving unresolved the question of whether it is legal for advertisers to use trademarked terms in their ad copy, or to bid on trademarked keywords.

Neither Geico nor Google would comment on the settlement, which was reached late Wednesday, except to say that the case has been resolved to the mutual interest of both parties.

The case provides little legal guidance to advertisers, since the decisions that were made are very narrow, and other issues were not addressed, according to Eric Goldman, a professor at Marquette University Law School who teaches courses on Cyberlaw and trademark law.

“My instincts tell me that this case will not be looked back on as all that influential,” Goldman told ClickZ News. He said that’s partly because the case was settled before it was fully decided by a judge, and partly because the decisions the judge did make were not strongly worded.

“The opinions of the court in this case were very tentative. They were not strong opinions, backed up with statements of law. I think future judges will have trouble taking parts of this decision as precedent,” he said.

The case was first filed by Geico in May 2004, a month after Google changed its ad policies to allow advertisers to bid on trademarked terms. Previously, Google forbade bidding on such terms if the trademark owner requested it do so.

An oral decision was made in December, and was followed up by a written decision made in August. In the rulings, the judge dismissed portions of the case that dealt with advertisers bidding on trademarked keywords, while allowing the parts of the case dealing with use of trademarked words in ad text to continue.

The result was that Google could continue to allow advertisers to bid on trademarked keywords, at least until another court case, such as the ongoing lawsuit brought by American Blinds, proves that the practice infringes on trademarks. Early opinions of the court in that case are similarly tentative, Goldman said.

With the settlement, now even the issue of trademarked words in ad text remains unresolved.

The case, had it been decided, would likely have had a bigger effect on individual advertisers. Experts on established trademark law believe advertisers would likely be the ones held liable for infringing on trademarks in their ad text. Goldman pointed out that while the case law is complex, a guideline is whether the ad creates the likelihood of confusing the consumer.

What may be a more likely outcome is that legislators will get involved before the courts come around to making a definitive judgment, as they have begun to do in Utah and Alaska with laws against adware, Goldman said.