Geico v. Google: Ready for Round Two?

As a public service, SearchLine offers an update on a trial that everyone in the search marketing industry seems to be following as if they’ve bet the farm on the outcome—as indeed they have.

The lawsuit by auto insurance company Geico against Google for trademark infringement got a lot smaller and more focused in late December when U.S. District Judge for the Eastern District of Virginia Leonie Brinkema in effect dismissed one large portion of Geico’s argument: that Google does not have the right to sell trademarks as keywords.

Virtually all the press coverage trumpeted the decision as a win for Google and, Google general counsel David Drummond said in a release, for consumers. But that acclaim obscures the fact that Brinkema let one point of Geico’s case stand.

Essentially, Brinkema ruled that competitors’ paid AdWords ads that used the word “Geico” in their title or text could possibly confuse consumers when they appear alongside organic search results for the word “Geico”. Brinkema will return to rule on that point after taking some time to write an opinion explaining the dismissal. There’s no expressed timetable for that opinion, but it could come as soon as the end of this month, allowing trial to resume soon after that.

“The initial press on this ruling was just wrong,” says Mark Ishman of the Stark Law Group, Chapel Hill NC. “There’s two parts to this hearing. Brinkema decided that simply using a famous mark alone does not violate [trademark protection]. But Geico brought a set of sites that the court decided may hold a possibility of consumer confusion. What the judge still has to decide is whether Google is liable for violating the act in this case, and if so, what the damages are.”

Both Google and Yahoo’s search division Overture have been targeted by companies complaining of trademark violations in the last few years. In fact, Yahoo was also named in the Geico suit but settled with the insurer in December for undisclosed terms. For its part, Google and its international subsidiaries have faced trademark infringement lawsuits in recent years by L.L. Bean, Louis Vuitton, American Blinds and Wallpaper Factory, Pets Warehouse, and French insurance company Axa. These suits involve use of a third party’s trademark in a number of different fashions: in keywords, meta tags, titles, pop-ups and other ways. Most are still winding through the courts.

According to Eric Goldman, assistant professor of law at Marquette University Law School and former general counsel for Web review site ePinions, the question that remains in Geico v. Google is very narrow indeed. Google’s official policy is that advertisers may not use rivals’ names in their paid ads.

“They haven’t done a great job of enforcing that rule, but in theory, we’re probably dealing with very few data sets—some ads that have slipped through the cracks,” he says. “We’re not even sure how many ads are at issue here.”

Geico will also trouble showing that Google should be held liable for any damages arising from trademark misuse in those ads, says Goldman. He believes Google can argue that it’s covered by the “printer and publisher defense”, an arcane legal haven that says a publisher engaged in innocent trademark infringement can only receive an injunction on future behavior, not financial penalties.

However it ends, both Ishman and Goldman agree, this suit will probably not be the precedent-setting case so many players in the evolving search marketing industry seem to want. Trademark misuse cases usually turn on specifics: how ads are worded, whether the mark is used to make fair comparisons between products, and most importantly, whether consumers are liable to be confused as a result of the use of another company’s trademark.

In fact, opposing sides in trademark cases rely regularly on surveys to indicate that consumers were (or weren’t) confused by the use of someone’s trademark. Sure enough, those surveys showed up in Geico v. Google. But Judge Brinkema expressed the opinion that neither side’s survey was sufficient to make its point. It’s possible that her future opinion may lead to new surveys by both sides, focusing more clearly on what she thinks are the important points of evidence in this case.

Finally, the fact is that no matter what this court decides in this case, a similar case in another jurisdiction under another federal judge may produce a very different outcome. Legal precedents come down from above, not from judges at the same court level.

Possible outcomes to the case are numerous. Having both declared some measure of victory, the parties may settle. While a damage award to Geico is possible, Ishman thinks the company may be just as interested in an arrangement whereby Google agreed to stop posting rivals’ ads to its search pages. On the other hand, Goldman sees omissions in the defense that indicate to him that Google might be in a hurry to get a verdict—a favorable one.

But that verdict probably won’t resonate to other trademark infringement cases now under consideration. “Whatever this court holds, it’s going to be binding for a certain set of facts in a certain type of case in this jurisdiction, but those facts can easily be different in another case elsewhere,” Ishman says. “This issue [of trademark violation] is always going to be judged individually, fact by fact.”

“I don’t think the Geico case will decide this question unless it goes all the way to the Supreme Court,” Goldman says. “And I don’t believe it will get there. I think this is going to be just one more data point in a string of cases.”

And that string of search lawsuits could get pretty lengthy. For analogy, Goldman points out to a past favorite target for Web-related suits, Network Solutions. Back in the early days of the Internet, that company was the sole registrar of domain names, and in 1995 incurred its first suit for letting third parties “hijack” corporate trademarks as Web domains. Those lawsuits mounted up, threatening to snarl the growth of the still-new Internet, until Congress rendered the issue moot in 1999 by passing a safe-haven statute preventing suits against domain registrars.

“Without that statute, we would have seen domain name lawsuits long after 1999, I’m sure,” Goldman says. Similar protected status for search engines would render trademark lawsuits moot, but Goldman doesn’t see sufficient Congressional will for such a move today.

“Trademark infringement strikes me as something that’s going to be on the radar screen for years to come,” he says.