Legal Letters Aim to Stop Competitors Use of 'Geico' Term

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NEW YORK ( -- Following its settlement of a lawsuit against Google, Geico is sending out warning letters threatening to sue other companies that are buying its name as a search engine advertising term.

The auto insurer is warning competitors that it now has grounds to take legal action against anyone who purchases the search engine term "Geico" in an attempt to get consumers to click through to a non-Geico Web site.

'Aggressively defending'
“We’re aggressively defending the use of our trademark in instances where we think it’s being infringed,” Geico senior counsel Jonathan Shafner said.

Geico filed its lawsuit against Google in May 2004, accusing the search engine company of violating Geico’s trademark by selling "Geico"-tagged ad space to Geico’s competitors. Filed in U.S. District Court for the Eastern District of Virginia, the suit was closely watched because it challenges the way Google sells online advertising -- the source of 95% of its revenue. The sale and purchase of competitors’ company names as keywords is standard operating procedure on search engines.

Geico's action could spark waves of new lawsuits, as companies sue each other over the use of certain search engine keywords, lawyers say.

After Judge Leonie M. Brinkema issued her written opinion three weeks ago, the parties reached a secret settlement agreement. Judge Brinkema ruled that consumers could be confused if a company buys the keyword “Geico” and then uses “Geico” in the headline or text of its sponsored link ad. She wrote that using Geico’s name in that way is trademark infringement. But she found Google’s selling of those keywords to be acceptable.

Open-ended decision
The judge left open the question of whether the purchase of a competing company’s name as a keyword and using it to trigger an ad could be trademark infringement by the purchaser. Lawyers say this open-ended opinion is why Geico is now going after rival insurance companies that are using its name.

Mr. Shafner said most of the dozen or so cease-and-desist letters he has sent in the past two weeks are addressed to people with small Web sites that have affiliate agreements with insurance companies. “No major insurers use our trademark in search engine advertising,” he said. “We haven’t brought a lawsuit yet, but we certainly will if they continue" to use Geico's mark.

Advertisers need to be aware of how they use others’ names, cautioned Monica Richman, head of the trademark department at law firm Brown Raysman Millstein Felder & Steiner in New York. “In certain circumstances you may buy your competitor’s trademark as your keyword, but be careful that it does not lead to confusion as to source or sponsorship.”

Advice to clients
Matt Naeger, vice president and general counsel at search engine agency Impaqt, said he recommends his clients not buy other companies’ names. “If you are going to create a Web page to compare your product with theirs, that’s great -- that’s in the true spirit of comparative advertising,” he said. “But if you are just buying your competitor’s name as a keyword just so the user can see your ad, that in the long run will be seen [by the courts] as a trademark violation.”

The legal ruling was so vague as to pose more questions than it answers, leaving much about online trademark law very vague, Ms. Richman said. “It’s the Wild West out there, it’s just been tamed a little bit.”

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