Car insurance company Geico sued the two companies in May over the sale of the terms "Geico" and "Geico Direct" in keyword advertising. Both of these terms are registered trade marks of the insurance firm.
According to CNET News, District Court Judge Leonie Brinkema ruled last week that the case against the two search engines could go to trial, as it appeared that they had been making use of Geico's trade marks in such a way that could amount to infringement.
Keyword advertising is a large source of revenue for search engines. It works by allowing advertisers to sponsor particular search terms so that, for a fee, whenever that term is searched the advertiser's link will appear next to the search results.
But trade mark holders are waking up to the fact that their trade marks are being used for this purpose, and several legal actions have been filed against search engines offering the service.
In a case that came before the German courts only last week, Google is being sued by comparison shopping site Metaspinner Media, over the use of its trade mark "Preispiraten," meaning "price pirates." The German firm was awarded a preliminary injunction against Google in November 2003, but, according to Metaspinner, the search engine has not complied with the terms of that order.
In October last year Google was ordered to pay damages of €70,000 by the Lower Court of Nanterre for allowing advertisers to sponsor the terms "bourse des vols" (flight market) and "bourse des voyages" (travel market), which were registered trade marks of the travel agencies Luteciel and Viaticum.
Controversially, despite the terms in question being generic, the French courts found in favour of the travel companies. They will have the chance to consider the matter again when an April-filed suit brought by insurance giant AXA is heard.
Google is facing a similar action in the US, following the January filing of a suit by The American Blind and Wallpaper Factory against Google, America Online and AOL subsidiaries Netscape Communications and CompuServe Interactive Services, Ask Jeeves and EarthLink. Again, the issue will be whether an ostensibly generic term like "American blind" can be protected.
David Woods, an intellectual property specialist with Masons, the law firm behind OUT-LAW.COM, said:
"The difficulty in some of these cases is that they involve generic words. If Reebok attempted to sponsor a search on 'Nike', its rival would have no difficulty in taking action. But a rule in the registration of a trade mark is that it cannot be purely descriptive of the services being offered. Nobody, for example, should be able to register a trade mark for 'sportswear' if the use of that mark is to sell sportswear. Identifying a generic or descriptive mark is not always easy, however, and that's how some of these disputes can arise."