Last December, the judge in the case ruled decisively in our favor on the issue of keywords. In her oral ruling, she stated that GEICO had failed to prove that using "GEICO" as a keyword to trigger ads was likely to confuse consumers. Then, earlier this month, she issued a written ruling explaining the reasoning behind the December ruling.
In her written ruling, she stated that GEICO's own evidence "refutes the allegation that the use of the trademark as a keyword, without more, causes a likelihood of confusion." That is a clear signal that Google's policy on trademarks and keywords is lawful.
What has generated the confusion is another part of the ruling, of little significance to Google, that relates to the use of "GEICO" in ad text. Google already has a policy that prohibits advertisers from using someone else's trademark in their ad text when the trademark owner objects. Our policy on that is here.
If I understand this, it's ok to use hidden trademark keywords - to trigger your ad - if the trademark owner don't know or object. But you should never use trademark in the text copy of your ad.