ALEXANDRIA, Va. -- Google Inc. won a major legal victory yesterday when a federal judge ruled that the search engine's advertising policy does not violate federal trademark laws.
US 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 -- both generic words and names protected by trademark -- used by people looking for information online about products and services.
Geico, a unit of Berkshire Hathaway Inc., claimed that Google's AdWords program, which displays the rival ads under a "Sponsored Links" heading next to a user's search results, confuses 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.
David Drummond, Google's vice president and general counsel, called the decision a victory for consumers.
"It confirms that our policy complies with the law, particularly the use of trademarks as keywords," Drummond said. "This is a clear signal to other litigants that our keyword policy is lawful."