Advertising Law Blog

Rosetta Stone Lives To Fight Google Another Day

Google has an AdWords program, which allows third parties to buy keywords, including trademarks, that generate sponsored links when someone types the word or phrase in an online search.

It has happened to all of us. We do a Google search for a company name or trademark, and when we get the results, in addition to the company's website, we see numerous other links of other companies. Wondering whether these other companies are legitimate and could be selling the goods we are looking for at a cheaper price, we click on a link and find out that the website we are brought to is not actually the company for which we were searching and does not sell the company's products at all. Other times, the link will take us to a site that states or implies that it is authorized by the trademark owner, but in fact, there is no such affiliation. It turns out that unbeknownst to many consumers, Google has an AdWords program, which allows third parties to buy keywords, including trademarks, that generate sponsored links when someone types the word or phrase in an online search.

In a recent decision, the Fourth Circuit has revived Rosetta Stone, Inc.'s trademark infringement lawsuit against Google with regard to its AdWords program.

In 2009, Rosetta Stone sued Google for trademark infringement based on its sale of keywords to third-parties that used its trademark phrases, such as "Rosetta Stone", "Rosettastone.com" and "Language Learning Success", and others. Rosetta Stone claimed that the phrases were sold as keywords ─ without permission ─ to competitors and counterfeiters, which misled consumers into thinking the counterfeiters were selling genuine Rosetta Stone products.

Google argued that it was immune from trademark infringement claims because it used the phrases in a way that was functional to its business, which the Court of Appeals rejected. Google also argued that consumers were not confused because they could tell the difference between sponsored links and regular search results.

In 2010, the Eastern District of Virginia dismissed the case against Google ruling that its sale of AdWords using trademarked words or phrases in web searches would not confuse customers. However, the Court of Appeals reversed much of the lower court's decision and stated that "[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 the use of its marks".

Not surprisingly, the decision has stirred widespread interest among the business community. It will be interesting to see the final outcome of this case, but this precedent is certainly helpful to companies seeking to enforce their trademark rights with regard to Google AdWords. Companies should also consult with their counsel prior to purchasing any Google AdWords that contain the trademark of any other individual or entity. In many cases, a brand owner can enforce its trademark rights against a party that is misusing a trademark in keyword searches, metatags or as a domain name.