Overture Sues Google for Patent Infringement

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Cost-per-click search service provider Overture Services Inc. said Friday it filed a patent infringement lawsuit against search rival Google Inc.

The lawsuit, filed in U.S. Federal District Court in Los Angeles, alleges Google's new cost-per-click search service AdWords Select, infringes Overture's U.S. Patent. The patent, which Overture received in July 2001, covers its "System and Method for Implementing a Position on a Search Result List Generated by a Computer Network Search Engine."

No one from Overture was immediately available to comment.

Cindy McCaffrey, a spokeswoman for Mountain View, CA-based Google, said the lawsuit is without merit.

"We have analyzed the patent and determined that we do not infringe any valid claim that it contains," she said, declining to comment further.

Cost-per-click pricing has been a mainstay of Pasadena, CA-based Overture's business model from its early days when it was known as GoTo.com. Cost-per-click ranks advertisements based on how much the advertiser is willing to pay per click -- pricing can range from a penny per click to many dollars.

But Google's version of the cost-per-click model differs from Overture's in that it ranks ads based not only on how much an advertiser pays, but also on popularity. Using AdWords Select, advertisers pay when a visitor clicks on their ad. Google's previous program, AdWords, was based on a traditional system that required payment by the number of impressions delivered. As with AdWords, AdWords Select orders ads in a separate column on the right side of a Google search results page.

Ironically, rival pay-for-performance search engine operator FindWhat.com in January launched a challenge to the patent Overture claims Google is infringing.

On Jan. 25, Overture filed a lawsuit claiming similar patent infringement against FindWhat.com, which promptly turned around and claimed Overture's patent was obtained illegally.

FindWhat.com, New York, has asked a court to find Overture's patent [No. 6,269,361] invalid and unenforceable because it claims the patent describes technology that was in use when Overture was known as GoTo.com. The company changed its name to Overture in September 2001. The system was widely covered in the media more than a year before the then GoTo.com's filing for the patent. Patent law requires that an application be filed less than a year after any public use or disclosure of the invention.

FindWhat.com also claims Overture misrepresented to the Patent and Trademark Office "the nature and extent of its prior and public uses" of its technology.

In July 2001, when Overture was awarded the 361 patent, it also received a patent for its DirectTraffic Center account management system.

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