Yesterday's order from the U.S. Ninth Circuit Court of Appeals in San Francisco reinstates an earlier temporary injunction that Disney had sought to overturn.
A trial date has not yet been set, but preliminary hearings in the case are scheduled for March, GoTo representatives said today.
"We feel vindicated," said GoTo attorney Pierce O'Donnell in Los Angeles. "It's a victory for us and particularly for our consumers, who are entitled not to be confused about which service they're using."
Disney executives could not immediately be reached for comment. But the familiar green stoplight logo it had been using since Go.com launched last year was replaced this morning on its Web site.
The stoplight logo, which had the word "Go" in white lettering emblazoned in a green stoplight on a yellow square background, looked too similar to GoTo's mark, which was established in 1997, Pierce said.
GoTo first noticed the logo for Disney's online directory during the company's beta release early last year.
GoTo sued Disney in February 1999 when talks between the companies broke down.
The complaint seeks tens of millions of dollars in damages plus a permanent court order barring Disney from using the Go.com mark.
The damage figure might rise because Disney was allowed to continue using the stoplight logo for two months pending the appeals court ruling, O'Donnell said.
The court yesterday found that GoTo "demonstrated that it is likely to succeed on the merits of its claim," and that Disney's Go.com design mark "has caused, and is likely to continue causing, confusion among consumers," Chief Justice Terry J. Hatter Jr. wrote in the order.
The judge also noted that it was risky for Disney to continue with its logo design knowing that GoTo had already hit the Web two years prior.
At a November court hearing in Los Angeles, a Disney attorney told the judge that complying with the injunction could cost the company about $40 million.
Yesterday's court order came on the same day Disney announced it was changing its Web strategy to play up its strength as an entertainment destination.
Meanwhile, GoTo, based in Pasedena, Calif., has seen its search service blossom, according to analyst reports. Nonetheless, the company's stock dropped $3.25 this morning to $70.63 a share.