Merchant & Gould Trademark Enforcement Team Alert: Fourth Circuit Revives Rosetta Stone’s Trademark Infringement and Dilution Claims Against Google

April 16, 2012

Brand owners and Internet advertisers take note: This notice provides an overview of the Rosetta Stone v. Google decision that revives Rosetta Stone’s claim of trademark infringement and dilution against Google based on the use of trademarked keywords that generate online advertisements.

Overview of Rosetta Stone Decision:

Rosetta Stone sued Google in the Eastern District of Virginia for direct, contributory, and vicarious trademark infringement, trademark dilution, and unjust enrichment.

The case centered on Google’s liability for allowing third parties to use Rosetta Stone’s trademarks to generate ads and to place them in the resulting advertisements. Google’s AdWords program allows advertisers to purchase keywords that trigger the appearance of the advertiser’s advertisement and a link to the advertiser’s website.

Prior to 2004, Google’s terms and conditions precluded both the use of trademarks in the text of advertisements and the use of trademarks as keywords. Google changed that policy in 2004 to allow advertisers to use trademarks to generate advertisements, yet restricted the use in the advertisement itself. Google’s internal studies suggested unrestricted use of trademarks in the text may confuse consumers. In 2009, however, Google changed its policies again to allow trademark use in the advertisements themselves in certain situations.

The District Court granted Google’s motion for summary judgment on all trademark claims and Google’s motion to dismiss the unjust enrichment claim.

The Fourth Circuit Court of Appeals reversed the grant of summary judgment of no infringement under direct and contributory trademark infringement and trademark dilution. The Court held, “A reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks.”

The Fourth Circuit’s decision was based on factual disputes related to Google’s intent, evidence of actual purchaser confusion, Google’s in-house studies that show “the likelihood of confusion remains high,” and expert testimony.

Strategy and Placement Guidelines for Online Advertisers

Online advertisers should be aware of Google’s terms and conditions. The user agreement requires advertisers to agree to assume responsibility for the advertiser’s selected keywords, for the advertising content, and to ensure that the use of the keywords do not violate any applicable laws. Third party advertisers may find themselves on the hook for Google’s defense costs.

Online advertisers should audit their advertising campaigns and confirm the keywords that are being used to generate advertisements are appropriate. Some advertisers use Google’s suggestion tool for keywords not knowing that the suggestions include third party trademarks. An audit of the keywords may catch these issues.

Online advertisers may input their competitors’ trademarks as negative keywords to assure that searches done based on those trademarks will not generate advertisements. Alternatively, online advertisers who want to use third party trademarks should consider appropriate uses of those trademarks that are not likely to cause confusion or dilute the brand owners’ marks.

Trademark Protection Guidelines for Brand Owners

Brand owners may want to inform Google of third party advertisers who are using their trademarks. The Rosetta Stone decision discusses the issue of intent. General knowledge of infringement may not be sufficient to warrant infringement. Providing Google with specific knowledge of an infringement may prompt immediate removal. Alternatively, informing the third party advertiser of Google’s terms and conditions may prompt the advertiser to voluntarily remove the advertisement.

Google offers an online complaint mechanism to request removal of infringing third party advertising. Brand owners may want to use that complaint form to initiate removal of infringing advertising.

Brand owners should gather evidence of confusion based on third party advertising. Customer support departments should be advised to log any instances where consumers were confused based on third party advertising.

Brand owners should consider deploying monitoring software to review online advertisements to ensure their brands are not being used to generate advertisements for third parties.

Contact Us for More Information

Please contact us if you would like further information related to keyword advertising and protecting your brands. Our team can assist you with the following:

Provide further information regarding Google policies on keyword infringement

Create a brand protection strategy related to your brand portfolio

Audit existing keyword advertising campaigns

Enforce against third party use of your trademarks as keywords

Monitor online advertising that uses your company’s trademarks.

We understand that this decision may have an impact on your business. Please contact us to review strategies that will maximize your brand’s protection on a cost efficient basis

William Schultz: 612.336.4677
Greg Golla: 612.371.5395
Scott Johnston: 612.371.5274
Kristine Boylan: 612.371.5295