The decision represents a major legal victory for the search engine giant and its customers — mainstream and adult — that rely on associating terms and phrases with their products and services online.
The suit filed in federal court alleged that Google used a company’s trademark as search terms to drive Internet traffic to third-party advertisers.
U.S. District Judge Leonie M. Brinkema rejected a claim by auto insurance giant Geico Corp., which argued that Google shouldn't be allowed to sell ads to rival insurance companies that appear whenever Geico's name is typed into the Google search box.
Geico, formally known as Government Employees Insurance Co., claimed that Google's AdWords program causes confusion for consumers and illegally exploits Geico's investment in its brand name.
"This is a clear signal to other litigants that our keyword policy is lawful," Google in-house counsel David Drummond told Reuters.
The case continues, however, on one narrower point of the lawsuit. That question, Brinkema wrote, was whether Google should be barred from displaying pop-up ads for other insurers that contain the word "Geico."
The search engine says it does its best to prevent ads that violate the policy from sneaking in, and that the advertisers would be liable for any trademark violation, not Google.
Brinkema adjourned the case for several weeks while she writes an opinion and encouraged both sides to continue settlement talks on the last remaining issue of the case.