Google v. Rosetta Stone over Google Adwords

Rosetta Stone and Google Inc. settled a trademark lawsuit over Google Adwords after 3+ years of litigation. Although this was not the first time Google had been hit with trademark infringement lawsuits over keywords in search results, this case did mark a pillar stone in shaping future Google policies over its Google Adwords program for first-party owners.

Introduction

Rosetta Stone began as small family owned business. This language learning software brand earned its name as an industry-leader in technology –based language learning products and online services, and, by January 2010, it had become a publicly traded corporation with gross revenues valuing up to $252 million. With its rapidly expanding language learning services, Rosetta Stone officially owns and uses various registered trademarks including Rosetta Stone, Rosetta Stone Language Learning Success, RosettaStone.com and Rosetta World.

Description

Google had been hit with various other trademark infringement lawsuits due to its Google Adwords program. Since Google operates one of the world’s most sophisticated search engines, it also enables brands and trademark owners to use its Cost-per-Click (CPC) option in Google Adwords to bid for keywords that match their business trademarks and rank them higher on its Page 1 on the search engine. This CPC policy enables trademark owners to capture a wider market since most consumers who search for a ‘keyword’ only look at the top most searches in the Google Search Engine.

Google Adwords program allows various advertisers to purchase keywords without a condition of them actually ‘owning’ the ‘trademark’ words. Therefore many other trademark brands landed up suing third-party advertisers and Google over ‘stealing’ their ‘official trademark keywords’ such as Tiffany v. Ebay, CYBERsister v. Netnanny.com, etc.

However, since Rosetta Stone had a handful of ‘trademark keywords’ being purchased as CPC by third-party advertisers, it sued Google over various reasons, including direct trademark infringement under the Lanham Act, see 15 U.S.C. § 1114(1)(a) specifically for direct trademark infringement, contributory trademark infringement, vicarious trademark infringement, and trademark dilution. In addition, Rosetta Stone also filed a lawsuit against Google for unjust enrichment under Virginia state law.

The case which was first held in district court ended the settlement on confidential terms by stating that “both parties would meaningfully collaborate to combat online ads for counterfeit goods and prevent the misuse and abuse of trademarks on the Internet.” However, this did not clarify whether Google will revise or enhance its protection policies for first-party intellectual properties. Also, the district court decision did not state how and when Rosetta Stone would be compensated in damages by Google.

Apparently, the district court’s opinion seemed like a complete win for Google, this situation was reversed when the trademark case moved to the Fourth Circuit under Federal Courts Appeal.

Conclusion

The case holding under the Fourth Circuit reversed the district court’s decision summary judgment for the direct trademark infringement, contributory trademark infringement and trademark dilution. The Fourth Circuit Court affirmed the grant of summary judgment for the vicarious trademark infringement claim and upheld the motion to dismiss for unjust enrichment on a different reasoning than the district court under the following terms:

“For the foregoing reasons, we affirm the district court’s order with respect to the vicarious infringement and unjust enrichment claims. We vacate, however, the district court’s order with respect to Rosetta Stone’s direct infringement, contributory infringement and dilution claims, and we remand the case for further proceedings on those three claims.”

AFFIRMED IN PART, VACATED IN PART, AND REMANDED

Although many of the Google Adwords related problems related to trademark infringement remains unresolved, the Rosetta Stone lawsuit did start the debate to shape trademark law over the Internet.

The full opinion can be found here: https://www.ca4.uscourts.gov/opinions/published/102007.p.pdf

Disclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C.