Intellectual Property – Internet Ads – Google AdWords – Keyword Searches

An Alexandria U.S. District Court grants summary judgment to Google on trademark infringement claims filed by plaintiff Rosetta Stone Ltd., who alleges Google’s AdWords online ad program lets competitors cash in on Rosetta Stone’s name by purchasing specific trademarks as keyword search terms.

In 2002, Rosetta Stone began participating as an advertiser in one of Google’s advertising programs called AdWords Select Advertising Program, which uses “Sponsored Links.”

For years, Google prohibited advertisers from purchasing specific trademarks as keyword triggers for Sponsored Link ads. But Google revised this policy and began allowing the practice. Based on Google’s new policy, Rosetta Stone brings this action alleging Google’s unauthorized use of the Rosetta Stone Marks. Rosetta Stone alleges that by giving other paid advertisers under Google’s ad programs, including AdWords, the right to use the Rosetta Stone Marks, or words, phrases or terms similar to those Marks as keyword triggers that cause Sponsored Links to be displayed, Google’s search engine is helping other advertisers misdirect Web users to websites of companies that compete with Rosetta Stone, sell language education programs from Rosetta competitors, sell counterfeit Rosetta Stone products, or are entirely unrelated to language education.

Rosetta Stone alleges four claims for violation of federal trademark/service mark protections; and claims under Virginia law for trademark infringement, unfair competition and unjust enrichment.

The court grants summary judgment in favor of Google on counts I, V and VI because no reasonable trier of fact could find that Google’s practice of auctioning Rosetta Stone’s trademarks as keyword triggers to third party advertisers for use in their Sponsored Link titles and text creates a likelihood of confusion as to the source or origin of Rosetta Stone’s goods. Further, because Google uses Rosetta Stone’s trademark to identify relevant information to users searching on those trademarks, the use is a functional and non-infringing one. The court grants summary judgment in favor of Google on count II because no reasonable trier of fact could find that Google intentionally induces or knowingly continues to permit advertisers selling counterfeit Rosetta Stone products to use the trademarks in their Sponsored Link titles and advertisement text. The court also grants summary judgment in favor of Google on count III because no reasonable trier of fact could find that Google exercises joint ownership and control over third party advertisers’ Sponsored Links titles and text. Neither Google’s employees nor its Query Suggestion Tool directs or influences third party advertisers to bid on Rosetta Stone’s trademarks when they subscribe to Google’s advertising program. Finally, the court grants summary judgment in favor of Google on count IV because there is no genuine dispute of material fact that Rosetta Stone’s brand awareness has only increased since Google changed its trademark policy to permit the use of trademarked terms as keyword triggers and as words within Sponsored Link titles and advertisement text.

Rosetta Stone Ltd. v. Google Inc. (Lee, J.) No. 1:09cv736, Aug. 3, 2010; USDC at Alexandria, Va. VLW 010-3-402, 46 pp.