Pasadena-based Overture, formerly known as GoTo, found success before Google with its advertising model. Its advertisers bid for placement on relevant search results and pay Overture only when someone clicks on their listing.
The company was awarded a US patent in July 2001 which covers a "system and method for influencing a position on a search result list generated by a computer network search engine." It sued Google for infringement in April 2002 over its AdWords service.
AdWords, launched in February 2002, also allows advertisers to sponsor particular search terms so that, for a fee, whenever that term is searched the advertiser's link will appear next to the search results. Google has always denied infringement.
According to SiliconValley.com, the first stage of the court process is well under way, with District Court Judge Jeffrey White likely to issue a crucial technical ruling any day now to determine the extent and definition of the patent claims with a view to determining whether there may have been an infringement. It is therefore fundamental to the case.
If Google loses, according to SiliconValley.com, it may face paying hundreds of millions of dollars in compensation to arch rival Yahoo! If it wins, Yahoo!, a shareholder in Google, still has Google's flotation to look forward to later in the year.