Google, Rosetta Stone Settle

28 November 2012

Rosetta Stone and Google have agreed to dismiss the three-year old trademark infringement lawsuit between them and to “meaningfully collaborate to combat online ads” for counterfeit goods and prevent the misuse and abuse of trademarks on the internet.

The companies, which issued a joint statement on October 31, 2012, will also work together to help law enforcement officials around the world go after counterfeiters at the source, they said. “By working together, Google and Rosetta Stone hope to improve detection methods, and better protect from abuse brands like Rosetta Stone, advertising platforms like Google AdWords, and ultimately consumers on the internet,” they said. “At the end of the day, both companies would rather cooperate than litigate, and we believe this agreement is an important step toward eliminating piracy and trademark abuse on the internet.”

The lawsuit, which was filed by Rosetta Stone in 2009, centered on Google’s use of sponsored links, says Washington-based Venable associate Matthew R Farley, writing in a firm client alert.

“Sponsored links are paid advertisements displayed alongside keyword results in Google’s search engine,” Farley says. “Google allows sponsors to purchase certain keywords, including trademarks, which trigger the appearance of the sponsor’s advertisement and link when the

keyword is entered as a search term.”

Farley says Rosetta Stone challenged Google’s policy of permitting persons other than the trademark owner to purchase sponsored link space in searches for a trademarked keyword. “According to Rosetta Stone, competitors and counterfeiters were purchasing ad space on search results for its trademarks and diverting business. The sponsored links, Rosetta Stone said, also amounted to infringement and dilution of its trademarks,” Farley wrote.

The US District Court granted summary judgment for Google in 2010, finding that consumers were unlikely to be confused by Google’s sponsored links platform and that the Rosetta Stone trademarks were not diluted by Google’s actions. Farley says the US Court of Appeals for the Fourth Circuit reversed those rulings earlier in 2012 and sent the case back to district court for trial.

“The terms of the settlement are confidential, but there is no indication that the settlement includes any modifications to Google’s use of sponsored links,” he says. “With the resolution of this case, only two lawsuits remain pending against Google for its sponsored links; that number once totaled over a dozen.”

Farley notes that Google is still defending against CYBERsitter, a company that develops and markets internet content-filtering software, in the Central District of California, where the district court very recently permitted state false advertising and trademark claims to proceed over Google’s motion to dismiss. Google is also defending against Home Décor Center, a Home Depot competitor, in the Central District of California. The latter suit was removed from state to federal court in July 2012.