AXA is to sue internet search engine Google in a dispute over trademarks, revealed a report.

It said AXA has claimed Google allows rival insurance companies to buy online adverts which appear when searches are made for names and phrases which AXA has trademarked.

The insurer is seeking unspecified damages. A preliminary hearing is due on 10 May 2004.

The internet search engine is also facing similar legal action from US home improvement firm Wallpaper Factory and from luxury goods company Louis Vuitton.

According to a report, keyword-linked advertising, where firms pay to ensure that their online adverts appear whenever certain search terms are used now accounts for approximately a third of all online advertising in the US, and generates an estimated $1.6bn per year in revenues.

Google is expected to argue that there is no trademark infringement as it ensures that no trademarked words or phrases appear in the advertisements of rival companies, said the report.

It claims that this prevents consumers from mistaking the advertised goods or services for those of the brand they originally searched for, the report concluded.