INTERNET Challenge to Google's ads rejected

A Google exec said the decision is a victory for consumers.
ALEXANDRIA, Va. (AP) -- Google Inc. won a major legal victory Wednesday when a federal judge ruled that the search engine's advertising policy does not violate federal trademark laws.
U.S. District Judge Leonie Brinkema rejected a claim by auto insurance giant Geico Corp., which argued that Google should not be allowed to sell ads to rival insurance companies that appear whenever Geico's name is typed into the Google search box.
Google derives a major portion of its revenues from selling ad space to businesses that bid on search terms -- both generic words and names protected by trademark -- used by people looking for information online about products and services.
Geico, a unit of billionaire Warren Buffett's Berkshire Hathaway Inc., claimed that Google's AdWords program, which displays the rival ads under a "Sponsored Links" heading next to a user's search results, confuses consumers and illegally exploits Geico's investment of hundreds of millions of dollars in its brand.
"There is no evidence that that activity alone causes confusion," Brinkema said, in granting Google's motion for summary judgment on that issue. The ruling, on what the parties considered the seminal issue in the case, came just three days after the trial had begun.
Called a consumer victory
David Drummond, Google's vice president and general counsel, called the decision a victory for consumers.
Google's attorneys argued that the company was simply acting as a publisher by allowing competitors' ads to appear on the same screen when the names of their rivals are typed in.
Geico said it is losing customers who use the search engine to look for Geico but are led to other Web sites.
The Geico lawsuit, filed in May, came just weeks after Google said it planned to raise billions of dollars with an initial public stock offering. In filings with the Securities and Exchange Commission, the company said it would face financial risks if it was forced to limit sales of keyword ads to generic words.
Google is facing similar lawsuits from other companies in the United States and Europe, including American Blind and Wallpaper Factory Inc. and AXA Group, the world's No. 3 insurer.
Brinkema said the case would continue to move forward on one remaining issue, whether ads that pop up and actually use Geico in their text violate trademark law.