August 2005

Trademarks. Google sells other companies’ trademarks as “keywords” on its Internet search engine. Whenever someone types in one of these keywords, such as GEICO, not only will Google’s search results show links to GEICO’s web site, but Google also will show advertising for other insurance companies under a banner called “Sponsored Links.” For example, when writing this blog, we searched “GEICO” on Google’s site and were shown paid links to two of GEICO’s competitors, USInsuranceonline.com and InsureMe.com. Understandably, GEICO protested this practice of using its trademarks to direct consumers to its competitors. Given that 80% of Google’s revenues derive from this “AdWord” program (in turn causing Google to become a Wall Street darling, up three-fold in a year), Google refused to cease and desist, at which point GEICO sued for trademark infringement and unfair competition. After a bench trial (translation: no jury) in federal court in the Eastern District of Virginia in December 2004, the Judge ruled “from the bench” (translation: she delivered her decision orally in court) that GEICO had failed to establish that the use of its trademarks only to direct Google searchers to competitors created consumer confusion (the talisman of a trademark violation). However, she ruled that Google had violated the law when a competitor used GEICO’s name in the heading or the text of the ads. Judges can be very slow, and the Judge’s written opinion…