Geico, Google settle trademark lawsuit.

Auto insurer Geico and Internet search engine Google Inc. have settled a trademark infringement lawsuit over the use of trademarks as search engine keywords to trigger paid advertisements that appear alongside search results.

A statement from Geico said the case "has been resolved to the mutual satisfaction of the parties." Terms of the settlement were undisclosed.

Geico's statement said "no further comment on the settlement will be provided."

The settlement comes less than a month after U.S. District Judge Leonie Brinkema, sitting in Alexandria, Va., gave a mixed ruling, partially in favor of Geico. The ruling was almost identical to last year's ruling in the case by the same federal judge.

On Aug. 8, Brinkema ruled Geico presented insufficient evidence to prove using the trademark as a keyword for ads that do not use "Geico" in the text is a violation. However, she also ruled "the use of Geico's trademarks in the headline or text of advertisements that appear when a user searches on 'Geico' does violate the Lanham Act, leaving as the only remaining issues in the case whether Google is liable for such violations and, if so, the measure of damages."

Brinkema stayed continuation of the trial for 30 days to give Google and Geico an opportunity to settle the case. If no settlement was reached, litigation would have continued.

Geico argued consumers were confused when its competitors' ads appeared alongside results of a "Geico" search. The company said the sale of Geico's trademarks to competitors "is wrong" and a violation of federal and state law.

Google had maintained it is not responsible for trademark infringements that result when an ad, triggered by a trademark keyword, includes a trademark in the text.

Geico is a direct writer and estimates about 40% of its business is now Internet-driven, according to court documents.

Keyword ads are a significant source of revenue for search companies, which get paid every time someone clicks on a sponsored link. Advertisers pay search engines to have their links appear when certain words are searched.

These fees represented about 43% of Google revenue in 2003 and about 50% for the first six months of 2004, according to a company filing with the Securities and Exchange Commission.

The Geico lawsuit was filed in May against Google and Overture Services Inc., a division of Yahoo! Last summer, a federal judge denied the Internet companies' request to dismiss the case. In early December, Geico settled with Overture, but terms of the agreement were confidential.

Maryland-based Geico is a subsidiary of Berkshire Hathaway Inc., the fourth-largest private-passenger auto insurer in the United States in 2004, with 5.58% of the market based on direct written premiums, according to A.M. Best Co. state/line information.