In a riff on the pop-up controversy noted yesterday, GEICO has just filed a trademark infringement suit against Google, says c|net. In selling ads, Google uses "GEICO" as a keyword. Enter it as a Google search, and there at the top of the list in the left column of the results is www.geico.com. On the right, though, under "Sponsored Links," are other insurance offerings.

GEICO's claim is a bit thin because the possibility of consumer confusion seems small. But there is a real issue here. GEICO is saying that it has invested heavily to create in consumers' minds a synonymity between "GEICO" and "car insurance" so that a customer who wants the latter will routinely type in the former. Google is selling to other insurers the capacity to free ride on GEICO's investment, and is thus appropriating to itself some of the value.

The consumer harm would be that Google's siphoning off of value might in the long run force GEICO to underinvest in its brand name, perhaps by decreasing the quality of its product. On the other hand, of course, Google can argue that if GEICO's brand is superior then the comparison shopping will actually help it, so all Google is doing is discouraging investment in brand awareness that is based on hype rather than reality, and that this is actually a public service.

If it ever goes to trial, it will be an entertaining case. Economists will get rich.

posted by James DeLong @ 12:21 PM | General

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