There was a "little noticed" time bomb, apparently, in Google's S-1 prospectus, filed in April for its much-discussed initial public offering: a patent infringement lawsuit brought by Overture Services, the online advertising firm bought by Yahoo!, accusing Google's AdWords of infringement.
"I think there is merit based on the breadth of the claims," IP strategy group attorney Dave Ashby told the San Jose Mercury News about the litigation, in which Overture accuses Google of infringing Overture's "patented online bidding system" for Internet ads with the AdWords program.
"I took a look at [the suit] and said, 'Yep, Google does that. Yep, Google does that,'" Ashby told the newspaper.
Google could find itself paying triple damages if it loses the lawsuit, according to several Silicon Valley analysts, as well as having to choose between licensing Overture's technology or altering AdWords.
"And that would be bad news for Google," said SiliconValley.com. "After all, the company isn't exactly a diversified business: About 95 percent of its revenue last year came from advertising, most of it sold through its AdWords program."
Google filed with the Securities and Exchange Commission for its planned initial public offering back toward the end of April, and the plan was an eye-catcher from the outset – most of the stock is slated to be offered in an online auction.
