TELECOM Digest OnLine - Sorted: Geico Claims Google Advertising Policy Violates Trademark Law

Geico Claims Google Advertising Policy Violates Trademark Law

ptownson (
Fri, 17 Dec 2004 10:21 -0800

Monday, December 13, 2004 (AP)
SAM HANANEL, Associated Press Writer

(12-13) 14:39 PST ALEXANDRIA, Va. (AP) -- federal judge heard
arguments Monday in a trademark dispute that could threaten millions
in advertising revenue for search engine Google Inc.

Attorneys for auto insurance giant Geico told U.S. District Judge
Leonie Brinkema that Google should not be allowed to sell ads to rival
insurance companies that are triggered whenever Geico's name is typed
into the Google search box.

Geico claims 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.

"When a consumers enters 'Geico' ... and goes to the sponsored link
believing there's a connection, that is where the confusion arises,"
said Geico attorney Charles Ossola.

But Google attorney Michael Page said the ad policy is no different
than a supermarket giving out coupons for one product in the checkout
line when a customer buys the same product from a different company.

"There is nothing wrong with that under the trademark laws," Page

Geico filed the lawsuit against Google in May, seeking $8.65 million
in lost profits and a court order preventing Google from using its
name in the advertising program.

Under the program, for example, a competing insurance company could
bid to have its ad appear every time Google users search for the
word "Geico." When a user clicks on an ad, the advertiser pays Google
a predetermined fee.

Google is facing similar lawsuits from other companies, including
American Blind and Wallpaper Factory Inc. and AXA, the world's No. 3
insurer. Last year, Google asked a court to rule on whether its
pay-for-placement ad policy is legal.

John McCutcheon, Geico's assistant vice president of marketing,
testified Monday that most consumers visit just one Web site when
shopping for auto insurance. If a consumer trying to find Geico is
unknowingly steered to a competitor's site, "We've lost one

The Geico lawsuit, filed in May, came just weeks after Google said it
hoped to raise $2.7 billion with an initial public stock offering. The
vast majority of Google's ad revenue comes from search-related
advertising. In federal filings, the company said it would face
financial risks if it was forced to limit sales of keyword ads to
generic words.

Geico's lawsuit had also named Web site company Overture Services, a
Yahoo! subsidiary, but the two companies reached an undisclosed
settlement in November, after Brinkema denied a motion to dismiss the
trademark claims.

The bench trial is expected to last three days, after which Brinkema
could issue a decision or take the matter under advisement.

Copyright 2004 AP

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[TELECOM Digest Editor's Note: As this issue of the Digest was being
prepared for distribution, word reached us that Google had won the
case. PAT]

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