The Media Institute, D.C.
Business Software Alliance, D.C.
Geico, Chevy Chase.
The Association for Competitive Technology, D.C.
Volunteers of America, Alexandria.
Why? They’re all worried about having their trademarks used online by competitors or counterfeiters without their permission. That is the basis of Rosetta Stone’s trademark infringement suit against Google, in which the language learning firm accuses the search giant of selling trademarked phrases like “Rosetta Stone” and “language library” to third-party companies that make copycat software. The Google advertising program, AdWords, allows third parties to buy keywords that generate sponsored links when someone types the phrases in an online search. In some cases, those links take consumers to Web sites selling copycat software, misleading them to think those products are genuine Rosetta Stone software, the company claimed.
The case had been dismissed in 2010 by the U.S. District Court for the Eastern District of Virginia, but last week’s ruling reversed the bulk of that decision, meaning it can now proceed to trial in federal court. Rosetta Stone’s outside counsel, Cliff Sloan of Skadden Arps, called the ruling an “important precedent.”
Although several companies have lodged similar complaints against Google, this is the first time a court of appeals has established that a company can bring a trademark infringement case against Google on the basis that the sponsored links are confusing to consumers. Some trademark experts said it could open the door for more companies to sue Google on the same grounds (a prediction Google declined to comment on), and that the outcome of the Rosetta Stone case could affect virtually every company that sells goods or services to the public and is trying to protect its brand against counterfeiters.
“The case has ramifications for every business out there,” said Brad Newberg, a Falls Church attorney at Reed Smith who represents several companies supporting Rosetta Stone, including 1-800 Contacts and PetMed Express. “So many consumers find Web sites by going to a search engine and entering the brand name ... If the most prominent results that come up when the trademark is [searched] are advertisements for infringers or counterfeiters, that is detrimental to the business as a whole.”
Google had argued that consumers were not confused because they can tell the difference between sponsored links and regular search results. A Google spokesperson added that Google users benefit from being able to choose from a variety of competing advertisers.
“We think that the legitimate use of trademarks as keyword triggers helps consumers to make more informed choices,” the company said. “For what remains of the case, we’re confident we will prevail on both the merits and the law.”
In Google’s corner are several heavyweights. Yahoo, eBay, consumer advocacy group Public Citizen and digital rights advocacy groups Electronic Frontier Foundation and Public Knowledge have filed briefs in support of the Internet company, saying most people don’t confuse paid advertisements with search results, and that keyword advertising encourages competition and the free flow of information to users.
Earlier this month, another court of appeals revived a copyright infringement lawsuit against Google’s video-sharing site YouTube. In the suit, Viacom accused YouTube of violating Viacom’s copyrights by allowing users to post clips from TV shows without Viacom’s permission. A lower court had tossed the case, saying YouTube was shielded from liability because it removed the unauthorized posts when notified. Now, the matter is heading back to the trial court.