The ruling is good news for Google, which could have lost future ad revenues for its AdWords service if the decision had gone against it. However, the ruling does not change Google UK's stance, which is to stop trademarks triggering ads if requested to by the trademark owner.
Geico had argued that when users type in Geico in Google's search engine and AdWords brings up competitors' ads, its trademark is being infringed. However, US District Judge Leonie Brinkema of the Eastern District of Virginia said there was not enough evidence of this.
However, she allowed Geico to proceed with a different part of its case, in which it is seeking to prevent other advertisers using its name in the text of their ads.
David Drummond, Google's vice-president of corporate development, said: "This is a clear signal to other litigants that our keywords policy is lawful."
Other companies who are bringing legal action against Google include American Blind & Wallpaper Factory.
Geico also sued Yahoo! earlier this month, resulting in the two settling out of court and Yahoo! complying with requests to not show competitors ads when trademarked terms are searched.
Outside the US and Canada, Google's policy is to comply with requests from trademark owners to block competitors' ads. It lost a case on trademark-linked advertising brought by Louis Vuitton in France last year.
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This article was first published on brandrepublic.com