Google Ad Practice Is Unfair, Geico Says

A federal judge heard arguments Monday in a trademark dispute that could threaten millions of dollars in advertising revenue for search engine operator 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 user clicks on an ad, the advertiser pays Google a fee.

“When a consumer 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 was no different from a supermarket’s giving out coupons for one product in the checkout line when a customer buys the same item from a different company.

“There is nothing wrong with that under the trademark laws,” Page said.

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

Google is facing similar lawsuits from other companies, including American Blind & Wallpaper Factory Inc. and AXA, the world’s No. 3 insurer. Last year Google asked a court to rule on whether its ad policy was legal. Most of Google’s ad revenue comes from search-related advertising.

Geico’s lawsuit had also named Overture Services, a subsidiary of Yahoo Inc., but the 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.