However, the ruling is only a victory in part for the search giant. Judge Leonie Brinkema of the Eastern District of Virginia also ruled that the case would continue over the question of whether the use of the trade marked terms in the text of sponsored ads breached GEICO's rights.
GEICO sued both Google and Yahoo! subsidiary Overture in May this year, and is one of several that have been filed against Google since it changed its US policy of screening for trade marks when advertisers select keywords for its popular AdWords service.
The service 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.
Until April, Google had respected requests from companies that asked it to prevent their marks from being available for sponsorship. Now, however, Google only takes action when a trade marked term is used in the text of an ad.
GEICO's case against Google came to trial on Monday, less than two weeks after GEICO and Overture agreed settlement terms. But after hearing GEICO's evidence, Google yesterday asked the court to dismiss the action on the basis that there was no evidence of trade mark infringement.
Judge Brinkema agreed, in respect of the use of trade marks as sponsored search terms, finding, according to reports: "There is no evidence that that activity alone causes confusion."
The case has now been halted, while the judge issues a written decision on the ruling, but will continue later in respect of the alleged text-in-ad violations – which Google argues it already has policies and procedures in place to prevent.
"It confirms that our policy complies with the law, particularly the use of trade marks as keywords," said David Drummond, vice president and general counsel at Google. "This is a clear signal to other litigants that our keyword policy is lawful,"
"GEICO will continue to aggressively enforce its trade mark rights against purchasers of its trade mark on search engines and against search engines that continue to sell its trade marks," said GEICO General Counsel Charles Davies.
As this is only a district court ruling, the verdict will not necessarily affect the outcomes of other similar cases pending in the US against Google.