French Insurance Giant Sues Google Over Ad Hijacking

29 April 2004

Paris-headquartered AXA, the planet's third largest insurance company, has slapped a writ on California-based internet search engine company Google alleging it has breached its trademark.

The deep-pocketed insurer -- 2003 revenues: $86 billion (€72.63bn; £48.48bn) -- is the latest litigant naming the freewheeling Google for trademark transgression. Among others filing similar complaints are two US companies, American Blind and Wallpaper Factory and Pets Warehouse.

All make similar allegations: that Google used their trademarks to trigger ads from rivals. According to a Paris court official, a preliminary hearing on AXA's charge of "brand counterfeiting" is scheduled for May 10.

Analysts and media observers believe the legal onslaught could endanger Google's upcoming multi-million dollar IPO. Opines Danny Sullivan, editor of online newsletter Search Engine Watch: "It's definitely a threat to Google, but it's also a threat to anybody who sells keyword-linked advertising -- including Overture and eBay."

An anonymous AXA insider reveals the company's case is based on information that Google sold AXA's registered trademarks as advertising search terms. But although neither company is prepared to comment on the case, it is believed the damages sought by AXA could be punitive.

The fractious French lead the parade of anti-Google litigants. In a landmark ruling last fall, a French court fined Google $90,000 and ordered it to stop linking brands like Bourse des Vols (Flights Marketplace) to ads for the online travel firm's competitors.

Two months ago another French court ordered Google to pay costs in the first stage of an ongoing lawsuit filed by luxury goods maker Louis Vuitton. Google has appealed the former case; the latter is still in process.

Google's legal stance is that US law "holds that there is no infringement unless there is a likelihood of confusion". The company therefore believes it can avoid liability by ensuring no trademarks appear in the text of rivals' adverts.

And although AXA's pockets are subterranean, Google is no pauper. Although the (currently) privately held company doesn't publish financial data, analysts calculate it posts an annual net profit of around $150 million on revenues of $500 million. An estimated 75% of profit comes from advertising.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff