KRL

PARIS - AXA, the world's No. 3 insurer, is taking Google Inc. to court next month in the latest trademark challenge to threaten the heart of Google's business model ? advertising.

Google is already embroiled in litigation on both sides of the Atlantic over claims that its pay-for-placement service, Adwords, lets clients hijack their competitors' trademarks.

But AXA, which posted $86 billion in revenue last year, is the largest company yet to put the matter before a judge.

The growing mass of litigation over trademarks in advertising could weigh on Google's expected multibillion dollar stock market launch, experts say.

"It's definitely a threat to Google, but it's also a threat to anybody who sells keyword-linked advertising ? including Overture and eBay," said Danny Sullivan, editor of the online newsletter Search Engine Watch.

A preliminary hearing on AXA's allegations of "brand counterfeiting" is scheduled for May 10 in Paris, a court official said.

Both companies have confirmed that litigation is pending but declined to comment on the case or say how much AXA was seeking in damages. Under French court procedures, details will not be made public until later hearings.

A source close to the insurer, speaking on condition of anonymity, said the lawsuit was filed after Google sold AXA's registered trademarks as advertising search terms.

Internet users who typed "AXA" or "Direct Assurance" into the search engine got ads for rival insurers alongside ordinary search results, the source said. A Google search in Paris Thursday of "AXA" reaped mostly AXA sites and one U.K. financial planning site.

In the United States, American Blind and Wallpaper Factory Inc., a home decorating outfit, and Pets Warehouse, a New York-based pet supplies retailer, are pursuing separate lawsuits alleging that Google used their trademarks to trigger ads from rivals.

Last October, in the first ruling of its kind, a French court fined Google $90,000 and ordered it to stop linking brands like "Bourse des Vols" ? French for "Flights Marketplace" ? to competitors of the online travel firm that owned them. Google has appealed.

And in February, another French court ordered Google to pay costs in the first stage of an ongoing lawsuit filed by luxury goods maker Louis Vuitton SA.

The lawsuits have arisen despite Google's stated policy that it will generally remove ads triggered by registered trademarks when notified by their legitimate owners.

Google is about to relax that policy. Earlier this month, it announced plans to allow the sale of any U.S. or Canadian trademark as a search term. Trademarks in the text of ads would remain restricted.

The shift will give Google a more aggressive stance on trademarks than its archrival Yahoo Inc. (Nasdaq:YHOO - news), whose paid search service, Overture, pledges to vet the use of brands as search terms.

Google does not publish financial data, but analysts estimate it makes about $150 million in annual net profit on revenues of $500 million ? of which at least 75 percent comes from advertising.

Rose Hagan, Google's senior trademark counsel, said Google believes it can avoid liability by making sure no trademarks appear in the text of rivals' adverts.

This, she maintains, will be enough to prevent consumers from mistaking the advertised goods or services for those of the brand they typed into the search engine.

"The law in the U.S. holds that there is no infringement unless there is a likelihood of confusion," she said.

But New York attorney Barry Felder, who won a landmark federal appeal court ruling for Playboy Enterprises Inc. against Netscape Communications Corp. and Excite Inc., disagrees.

"What Google seems to be omitting is that they're creating a scenario which is likely to result in confusion," Felder said.

Netscape's portal, powered by Excite's engine, displayed ads for Playboy's rivals when an Internet user searched on trademarks "Playboy" and "Playmate." Felder said consumer surveys showed users were confused whether Playboy was the ads' sponsor.

The appeal court agreed, ruling in January that the practice could constitute trademark infringement and ordering a full trial. Netscape, which is owned by America Online Inc., settled out of court the following week for undisclosed damages.

In the AXA case, French lawyers say, efforts to avoid consumer confusion offer no defense under French law.

"As soon as you have a situation where an Internet user enters 'AXA' and is given results including other companies offering equivalent products, that can be deemed a trademark infringement," said Valerie Aumage of the Paris law firm Dubarry Le Douarin Veil.

The tough stance taken by French courts over trademarks online could be a foretaste of things to come if Google loses more of the lawsuits now piling up.

Analysts warn that the fallout would be felt not just by Google but by the entire $1.6 billion paid-search industry ? which now accounts for almost a third of all U.S. online advertising ? as smaller companies lose a relatively cheap way to compete with household names.

"We're at a pivotal stage, with the Internet just taking off as an advertising medium," said Hellen Omwando of Forrester Research. "This would only serve to push it back."

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sexsup

That's shocking, so you trademark "sex" and when people enter "sex" on google they have to see exclusively your site in result. Ah french law....

tbabe

doesnt matter how big the company is, google has a few bucks stashed away and can afford a lawyer or two.

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Still one of the best programs on the net.

According to their banner, you can get rich.

BRISK

You can't trademark the word "sex"

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I post on GFY so that when people ask me what I do,
I can tell them that I work with the mentally retarded.

ControlThy

Read the article again.

TheMob

YOu can trademark the word sex in connection with, let's say, furniture.

slackologist

it's an interesting argument. i think google will work a way around it with minimal loss.

Tuga

Ah... stupid american

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dav555add

I thought Overture already did not let you bid on trademarked names
Google should follow suit
As far as the French are concerned, they are letting lawsuits which are frivolous and hopeless stand as long as they are against Americans, they are also encouraging legitimate suits even when there is no need for lawsuits
It's a way for them to get back at the US

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johndoebob

You can't trademark the word sex and you can't trademark sex furnitures too because they are common words.For a trademark you have to use something like sex dollars,sex money,blah which isn't used by others.You still can use parts of the trademark if they are a common word.The lawsuite is just against the use of brands in connection with competitiors,playboy already won.That's like I would make an adword for GFY but link to XBiz

Adwords never really got me money so I don't care

KraZ

A good read ... as always from KRL

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Selling MedicalPorn,com and a dozen other gyno & doctor domains here:
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sexsup

I knew that you cant trademark the word "sex" in fact it was an extreme example, but I meant it's impossible to do what they propose

ControlThy

Oh please, that is just pathetic.

sexsup

"Playmate" is an example of not so uncommon trademarks

sexsup

Another thing to say, trademarks are not an exclusive of USA, so how can you be sure about the laws about it on every country in the world if they can sue google from everywhere?

VideoJ

You should let the US trademark office know this!

[Trademark for Sex

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