Rosetta Stone LTD v. Google Inc.

Filing 181

Declaration re 179 MOTION in Limine (Omnibus) of Jennifer L. Spaziano by Rosetta Stone LTD. (Attachments: # 1 Exhibit 1 - 9 (EXHIBITS 2, 6, 7, 8 FILED UNDER SEAL)(Allen, Warren) Modified on text 4/21/2010 (clar, ). (Received exhibits 2,6,7,8 on 4/20/10 filed UNDER SEAL and placed in vault)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION

____________________________________
ROSETTA STONE LTD.,
)
)
Plaintiff,
)
)
vs.
)
)
GOOGLE INC.,
)
)
Defendant.
)
____________________________________)

Case No. 1:09-cv-00736 (GBL/TCB)

EXHIBITS TO THE DECLARATION OF JENNIFER L. SPAZIANO IN SUPPORT OF
ROSETTA STONE LTD.’S OMNIBUS MOTION IN LIMINE

EXHIBITS 2, 6, 7, 8 FILED UNDER SEAL

SPAZIANO

EXHIBIT 1

,

GLOBAL END USER LICENSE AGREEMENT
This End User License Agreement ("License") is a contract between you, the individual completing the
order for, or installation of, or access to, or payment for, or commencing the use of the products, materials
and/or services described below ("Licensee") and Rosetta Stone ("Licensor") and governs Licensee's use
of the Rosetta Stone TM products, materials, and/or services. The license granted hereunder is conditioned
upon Licensee's acceptance of the terms set forth herein.
Definitions:
"Software" means the language learning software products, and any third party software, online or web­
based functionality, updates or upgrades licensed by Licensor to Licensee pursuant to this License.
"Household" means a domestic unit consisting of related individuals, who live together in the same
dwelling.
"Online" means the format of the Rosetta Stone Product that is accessed by Licensee using a web
browser over the Internet or an intranet.
"Rosetta Stone" means Rosetta Stone Ltd., its subsidiaries and/or affiliates.
"Rosetta Stone Product" means the Rosetta Stone language learning products, including, without
limitation, Software, audio tools or audio companion materials, password-protected access to a Licensor
website, and any related products, materials, services, and documentation (together with any updates to,
or new releases of, the foregoing that are made available to Licensee by Licensor) licensed by Licensor
to Licensee pursuant to this License.
"Standalone" means the format of the Rosetta Stone Product that is accessed on a computer either
owned by Licensee or that Licensee can legally access, where the Rosetta Stone Product is installed on
such computer.
1. IMPORTANT NOTICE ON LICENSE -- PLEASE REVIEW CAREFULLY ,
A. GENERAL: THIS LICENSE IS A LEGAL AGREEMENT BElWEEN LICENSEE AND LICENSOR.
LICENSEE UNDERSTANDS AND ACKNOWLEDGES THAT LICENSOR WOULD NOT HAVE ENTERED
INTO THIS LICENSE WITH LICENSEE, WITHOUT LICENSEE'S AGREEMENT TO BE FULLY BOUND
BY THE TERMS OF THIS LICENSE.
THIS LICENSE CONTAINS DISCLAIMERS OF WARRANTIES AND LIMITATIONS OF LIABILITY (SEE
SECTION 10 BELOW) AND AN EXCLUSIVE REMEDY (SEE SECTION 11 BELOW). THESE
PROVISIONS ARE AN ESSENTIAL PART OF OUR BARGAIN.
B. ONLINE LICENSEE ACCEPTANCE: BY CLICKING THE ACCEPTANCE BUTTON BELOW:
(i) LICENSEE ACKNOWLEDGES THAT LICENSEE IS ELECTRONICALLY SIGNING THIS LICENSE,
AND SUCH ELECTRONIC SIGNATURE HAS THE SAME LEGAL FORCE AND EFFECT AS A
HANDWRITTEN SIGNATURE.
(ii) LICENSEE AGREES TO BE LEGALLY BOUND BY ALL OF THE TERMS, CONDITIONS AND
NOTICES CONTAINED OR REFERENCED HEREIN.
(iii) IF LICENSEE DOES NOT AGREE TO THESE PROVISIONS OR ANY OF THE OTHER TERMS OF
THIS LICENSE, DO NOT CLICK THE ACCEPTANCE BUTTON AND DO NOT ENROLL FOR THE
ONLINE SUBSCRIPTION SERVICE. LICENSEE CONSENTS TO HAVE THIS LICENSE PROVIDED TO

REV031010

LICENSEE IN ELECTRONIC FORM. LICENSEE HAS THE RIGHT TO RECEIVE, AND MAY REQUEST,
A NON-ELECTRONIC COPY OF THIS LICENSE EITHER BEFORE OR AFTER LICENSEE
ELECTRONICALLY SIGNS THE LICENSE. LICENSEE ALSO HAS THE RIGHT AT ANY TIME TO
WITHDRAW LICENSEE'S CONSENT TO HAVE THIS LICENSE PROVIDED TO LICENSEE IN
ELECTRONIC FORM. SHOULD LICENSEE CHOOSE TO WITHDRAW LICENSEE'S CONSENT TO
HAVE THIS LICENSE PROVIDED TO LICENSEE IN ELECTRONIC FORM, LICENSOR WILL
TERMINATE LICENSEE'S RIGHT TO USE THE ROSEDA STONE PRODUCT. THIS MEANS THAT
LICENSEE WILL NOT HAVE THE RIGHT TO USE THE ROSEDA STONE PRODUCT UNLESS AND
UNTIL LICENSOR RECEIVES A SIGNED COPY OF A NON-ELECTRONIC VERSION OF THIS
LICENSE, WHICH LICENSOR WILL SEND TO LICENSEE UPON REQUEST. TO WITHDRAW
LICENSEE'S CONSENT ANDIOR REQUEST A NON-ELECTRONIC COpy OF THIS LICENSE,
PLEASE SEND AN EMAIL TO THE APPLICABLE EMAIL ADDRESS INDICATED IN THE CONTACT
INFORMATION FOR LICENSEE'S LOCATION LISTED IN ANNEX 1 OR SEND A LEDER AND SELF­
ADDRESSED STAMPED ENVELOPE TO LICENSOR AT THE APPLICABLE MAILING ADDRESS
INDICATED IN THE CONTACT INFORMATION FOR LICENSEE'S LOCATION LISTED IN ANNEX 1.
LICENSEE'S WITHDRAWAL OF CONSENT SHALL BE EFFECTIVE WITHIN A REASONABLE TIME
AFTER LICENSOR RECEIVES LICENSEE'S WITHDRAWAL NOTICE DESCRIBED ABOVE.
LICENSEE'S WITHDRAWAL OF CONSENT WILL NOT AFFECT THE LEGAL VALIDITY OR
ENFORCEABILITY OF THE LICENSE PROVIDED TO, AND ELECTRONICALLY SIGNED BY,
LICENSEE PRIOR TO THE EFFECTIVE DATE OF LICENSEE'S WITHDRAWAL. IN ORDER TO
ACCESS AND RETAIN THIS ELECTRONIC LICENSE, LICENSEE MUST HAVE ACCESS TO THE
WORLD WIDE WEB AND PAY ANY SERVICE FEES ASSOCIATED WITH SUCH ACCESS. PLEASE
PRINT A COPY OF THIS DOCUMENT FOR RETENTION AND FUTURE REFERENCE. TO RETAIN AN
ELECTRONIC COPY OF THIS LICENSE, LICENSEE MAY SAVE IT INTO ANY WORD PROCESSING
PROGRAM.
(iv) LICENSEE ACKNOWLEDGES THAT, ONCE LICENSEE HAS SUCCESSFULLY COMPLETED
LICENSEE'S ENROLLMENT FOR THE ONLINE SUBSCRIPTION SERVICE, THE ROSEDA STONE
PRODUCT WILL BE PROMPTLY MADE AVAILABLE FOR LICENSEE'S USE, AND LICENSEE DOES
NOT HAVE THE RIGHT TO CANCEL OR RECEIVE ANY REFUND UNLESS OTHERWISE
SPECIFICALLY AGREED BY LICENSOR IN WRITING OR EXPRESSLY REQUIRED BY OPERATION
OF APPLICABLE LAW.

C. STANDALONE LICENSEE ACCEPTANCE:
(i) BY INSTALLING OR OTHERWISE USING THE ROSEDA STONE PRODUCT, LICENSEE AGREES
TO BE BOUND BY ALL OF THE TERMS, CONDITIONS AND NOTICES CONTAINED OR
REFERENCED HEREIN AND THAT THIS LICENSE HAS THE SAME LEGAL FORCE AND EFFECT AS
IF SIGNED BY LICENSEE WITH A HANDWRIDEN SIGNATURE.
(ii)
IF LICENSEE IS REVIEWING THIS LICENSE IN ELECTRONIC FORMAT, LICENSEE
ACKNOWLEDGES THAT LICENSEE IS ELECTRONICALLY SIGNING THIS LICENSE BY CLICKING
THE ACCEPTANCE BUDON BELOW, SUCH ELECTRONIC SIGNATURE HAS THE SAME LEGAL
FORCE AND EFFECT AS A HANDWRIDEN SIGNATURE, AND LICENSEE AGREES TO BE LEGALLY
BOUND BY ALL OF THE TERMS, CONDITIONS, AND NOTICES CONTAINED OR REFERENCED
HEREIN.
(iii) IF LICENSEE DOES NOT AGREE TO BE BOUND BY THESE PROVISIONS OR ANY OTHER
TERMS OF THIS LICENSE, DO NOT OPEN THE PACKAGING OF THE ROSEDA STONE PRODUCT
OR INSTALL THE ROSEDA STONE PRODUCT, AND PROMPTLY RETURN THE PACKAGE IN
UNOPENED FORM. LICENSEE MAY OBTAIN A FULL OR PRORATED REFUND OF LICENSEE'S
PAYMENT FOR THE ROSEDA STONE PRODUCT BY RETURNING THE MEDIA AND MATERIALS
FOR THE ROSEDA STONE PRODUCT AND SUBMIDING A WRIDEN REQUEST FOR REFUND
PROVIDED THAT (1) LICENSEE HAS NOT ALREADY INSTALLED OR UTILIZED THE ROSEDA
STONE PRODUCT IN ANY WAY AND (2) LICENSOR RECEIVES SUCH REQUEST FOR A REFUND
AND ALL OF SUCH RETURNED ROSEDA STONE PRODUCT MEDIA AND MATERIALS WITHIN

2

THIRTY DAYS OF THE ORIGINAL DATE OF PAYMENT. UNLESS OTHERWISE REQUIRED UNDER
APPLICABLE LAW LICENSEE SHALL BE SOLELY RESPONSIBLE FOR THE SHIPPING COSTS
INCURRED IN RETURNING THE ROSETTA STONE PRODUCT MEDIA AND MATERIALS.
D. NO REFUNDS: EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS LICENSE OR REQUIRED BY
OPERATION OF APPLICABLE LAW, LICENSOR SHALL HAVE NO OBLIGATION TO REFUND ANY
AMOUNTS PAID BY LICENSEE WITH RESPECT TO THIS LICENSE.

2. LICENSE: The Rosetta Stone Product is licensed, not sold. The intended use of the Rosetta Stone
Product is language learning. Licensee may not use the Rosetta Stone Product for any purpose other
than language learning. If Licensee accepts this License, and for so long as Licensee complies with the
terms of this License, Licensor grants Licensee a nonexclusive and nontransferable license to use the
Rosetta Stone Product (in the case of Software, in machine-readable form), SUbject to the limitations and
restrictions set forth in this License.
A. ONLINE LICENSEES: If Licensee has accepted Online access to the Rosetta Stone Product, the
License granted by Licensor gives Licensee and the members of Licensee's Household use of the
Rosetta Stone Product from any workstation matching the System Requirements set forth in further detail
in the applicable URL for Licensee's location as listed in Annex 1. For purpose of the preceding
sentence, "use" of the Rosetta Stone Product shall mean access to the functionality of the Rosetta Stone
Product for language learning purposes only.
B. STANDALONE LICENSEES:
(i) If Licensee has accepted a Standalone format of the Rosetta Stone Product, the License granted by
Licensor gives Licensee the right to install and execute the Software on the hard drive or other storage
device of Licensee's personal computer and use any audio tools or audio companion materials to such
Software, in each case, for Licensee's personal use and the personal use of the members of Licensee's
Household as provided by this License with the restriction that the Software and any audio tools or audio
companion materials and any other materials are used by only one individual at a time. For purpose of
the preceding sentence, "use" of the Rosetta Stone Product shall mean access to the functionality and/or
content of the Rosetta Stone Product for language learning purposes only.
(ii) If the original language data disc is required to use the Rosetta Stone Product, Licensee may not
make an additional backup copy. In case any of the discs Licensee received is damaged, Licensee may
return it to Licensor for replacement upon Licensee's payment of applicable shipping costs. If Licensee
received an Activation ID (described in further detail in Section 3. B. below) with the Rosetta Stone
Product, Licensee may not share it with any individual outside of Licensee's Household.
(iii) This License does not allow the Software to be executed or made available, directly or indirectly, over
any network or on more than one computer at a time without the prior written consent of the Licensor.
3. INSTALLATION:
A. ONLINE LICENSEES: Licensee acknowledges that Online access to a Rosetta Stone Product on a
workstation which Licensee owns or may lawfully access requires:
(i) Installation of Additional Third Party Software (e.g., browser plug-ins). It is the responsibility of the
Licensee to follow the instructions provided by Licensor on Licensor's website (Le., the website in which
Licensee purchased the Rosetta Stone Product or the website of the Licensor location closest to
Licensee as set out in Annex 1) and/or within the Rosetta Stone Product to install such third party
software. Licensor will exert commercially reasonable efforts to make available technical support to
Licensee if support is required by Licensee.

3

(ii) Internet. Continuous internet access is required to access the Rosetta Stone Product, and is not

provided by Licensor. Such access is the sole responsibility of Licensee.

B. STANDALONE LICENSEES: Licensee acknowledges that installation of the Rosetta Stone Product

on a workstation Licensee owns or may lawfully access may require product activation. If Licensee

received an Activation ID with Licensee's Rosetta Stone Product, Licensee will be required to comply with

the Licensor-defined activation procedure to obtain full access to the Rosetta Stone Product. Product

activation is a technological measure designed to prevent unlicensed or illegal use of the Rosetta Stone

Product. These measures limit Licensee's access to the content until Licensee activates the Rosetta

Stone Product by following instructions provided in the documentation accompanying the Rosetta Stone

Product and on the Licensor website applicable to Licensee's location as listed on Annex 1. The

Licensee will be able to activate the Rosetta Stone Product by contacting Licensor at the telephone

number listed in the accompanying documentation and via the Licensor website applicable to Licensee's

locations as listed on Annex 1. During activation, Licensee will provide Licensee's unique Activation ID

accompanying the Rosetta Stone Product and computer configuration in the form of a numeric code to

verify the authenticity of the Rosetta Stone Product. Licensee agrees that if Licensee does not activate

the Rosetta Stone Product as set forth in the accompanying documentation Licensee will not be able to

access the complete Rosetta Stone Product content. Furthermore, Licensee agrees that Licensor may

use these measures to protect the Rosetta Stone Product against software piracy.

4. SECURITY AND PRIVACY:

A. Security: Licensee will not save Licensee's name/password on a workstation which may be used by

multiple users, as doing so will cause Licensee to be in violation of this License.

B. Privacy: Licensor reserves the right to collect and analyze data relating to Licensee's use of the

Rosetta Stone Product via an online subscription. Licensor uses this data to improve the Rosetta Stone

Product, for marketing research, to make promotional offers from Licensor and to assess Licensee's

compliance with the terms and conditions of this License. For information on Licensor's privacy policy

please refer to ANNEX 1.

5. ROSETTA STONE PRODUCT UPDA"rES AND UPGRADES:

A. ONLINE LICENSEES:

Licensor reserves the right, but is not obligated, to automatically update the Rosetta Stone Product. By

installing or using the Rosetta Stone Product, Licensee agrees to automatically receive updates.

B. STANDALONE LICENSEES:

Some versions of the Rosetta Stone Product include a component to download updates and upgrades

(collectively referred as "Updates"). Licensor may, from time to time, prOVide Licensee with Updates, and

Licensor reserves the right to provide such Updates for a fee. Licensee must have a license from

Licensor to use the previous version of the Rosetta Stone Product. Upon installation of the Update,

Licensee may continue to use the previous version provided that the Update and the previous version are

installed on the same computers, subject to the limitations set forth in Section 2 hereof. Licensee may

refuse to accept an Update. However, upon release of an Update, Licensor may have no further

obligation to support the previous version of the Ros~tta Stone Product. If the Licensee has purchased a

version that does not include a component to download Updates or if Licensee does not have internet

access, it is Licensee's responsibility to contact Licensor to request assistance with such Updates.

6. TRANSFER: Licensee may not, and may not permit others to, directly or indirectly sell, rent, lease,

loan, timeshare, or sublicense the Rosetta Stone Product. The transmission of Licensee's user name,

password or Activation ID to allow any person (other than Licensee or a member of Licensee's

Household) to use Rosetta Stone Product is expressly forbidden and failure to comply with this prohibition

may result is the suspension or termination of the right to continue to use the Rosetta Stone Product or

receive support.

4

7. LIMITATIONS ON USE: Licensee agrees not to, and not to permit others to, directly or indirectly (a)
reverse assemble, reverse compile, or otherwise reverse engineer or attempt to derive the source code of
all or any part of the Software, (b) copy, modify, translate, alter, change, or collect information that can be
used to create derivative works of all or any part of the Rosetta Stone Product, (c) download, copy or
collect information that could be used to copy all or any part of the Rosetta Stone Product, or access or
use all or any part of the Rosetta Stone Product for any purpose other than for language learning
purposes except as and only to the extent expressly permitted by applicable law, notwithstanding this
limitation or expressly authorized in writing by Licensor. Any such information supplied by Licensor, and
any information obtained by Licensee by any such expressly permitted decompilation may only be used
by Licensee for the purpose expressly authorized by Licensor and may not be disclosed to any third party
or used to create any software that is substantially similar to the Software. If Licensee's subscription,
invoice, pack slip or any other documentation from Licensor specifies a maximum number of authorized
end users or concurrent users that may access the Rosetta Stone Product, Licensee agrees not to
exceed such maximum number without the prior written approval of Licensor.
8. OWNERSHIP OF INTELLECTUAL PROPERTY: Licensor reserves all rights in the Rosetta Stone
Product not expressly granted to Licensee in this License. Licensee acknowledges and agrees that
Licensor or its third-party licensors own all rights, title and interest in and to the Rosetta Stone Product
(including all software, code, interfaces, text, photographs, graphics, animation, applets, music, video and
audio incorporated therein and any related user guides and documentation), the trademark Rosetta
Stone, the URLs, and other marks related to Licensor's products and URLs such as rosettastone.com
and the trade dress, and look and feel of the Rosetta Stone Product, all of which are covered by various
protections including, without limitation, copyright, trademark, and trade secrecy law. If Licensee
suggests new features or functionality that Licensor, in its sole discretion, adopts for the Rosetta Stone
Product, such new features or functionality will be the sole and exclusive property of Licensor and any
and all claims of Licensee as to the same are hereby waived and released. Licensor reserves the right, in
its sole discretion and without incurring any liability to Licensee, to update, improve, replace, modify or
alter the specifications for and functionality of all or any part of the Rosetta Stone Product from time to
time.
9. SLIPPORT: Licensor offers support for the Software for those of its customers who have completed
the online registration process. Licensor reserves the right to change its support policy (and to
discontinue support for any Software product) at any time and without notification to Licensee. Licensee's
use of Licensor's customer support is governed by the hours of operation, billing rates and other terms
and conditions set forth at Licensor's website. Licensor reserves the right to make changes to the
support policy at any time, and will post those changes on the support pages on Licensor's website.
10. LIMITED WARRANTY, DISCLAIMERS, AND LIABILITY LIMITATIONS:
A. LIMITED WARRANTY AND DISCLAIMER: Licensor warrants that the Rosetta Stone Product will
perform substantially in accordance with the descriptions and specifications in the documentation
accompanying such Rosetta Stone Product for a period of ninety (90) days after license of the Rosetta
Stone Product under normal use. Notwithstanding anything to the contrary, Licensor makes no
representation or warranty with respect to any third party software, and undertakes no obligations with
respect to any third party software.
B. DISCLAIMER OF WARRANTIES: OTHER THAN AS STATED IN THIS SECTION 10. A. ABOVE,
AND TO THE MAXIMUM EXTENT PERMIDED BY THE LAW, NEITHER LICENSOR NOR ITS THIRD
PARTY LICENSORS MAKE ANY OTHER WARRANTIES OR PROMISES, WHETHER EXPRESS OR
IMPLIED, OR BY STATUTE, COMMON LAW, CUSTOM, USAGE OR OTHERWISE, ABOUT THE
ROSEDA STONE PRODUCT, THE EMBEDDED SOFTWARE OR ANY SERVICES PROVIDED
HEREUNDER, AND PROVIDE THE ROSEDA STONE PRODUCT AND SUPPORT SERVICES (IF
ANY) "AS-IS" WITH ALL FAULTS AND THE ENTIRE RISK AS TO THE SATISFACTORY QUALITY,
PERFORMANCE, ACCURACY, AND EFFORT OF SUCH ROSEDA STONE PRODUCT (IF ANY)
SHALL BE WITH LICENSEE. THERE IS NO REPRESENTATION OR WARRANTY HEREIN AGAINST
INTERFERENCE WITH LICENSEE'S ENJOYMENT OR AGAINST INFRINGEMENT. LICENSOR AND

5

ITS THIRD PARTY LICENSORS DISCLAIM ANY AND ALL OTHER EXPRESS OR IMPLIED
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE ROSEDA STONE PRODUCT,
THIRD PARTY SOFTWARE AND ANY SERVICES PROVIDED HEREUNDER, INCLUDING ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, SATISFACTORY QUALITY, NON-INFRINGEMENT, OR THAT LICENSEE'S USE OF THE
ROSEDA STONE PRODUCT WILL BE UNINTERUPTED, VIRUS-FREE, OR ERROR-FREE.
LICENSEE ACKNOWLEDGES THAT NO EXPRESS OR IMPLIED REPRESENTATIONS OR
WARRANTIES ARE MADE BY ANY THIRD PARTY LICENSORS HEREIN.
C. LIMITATIONS OF LIABILITY: IN NO EVENT WILL LICENSOR OR ITS THIRD PARTY LICENSORS
OR ANY OTHER PERSON OR ENTITY BE LIABLE TO LICENSEE FOR (a) ANY CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES, INCLUDING ANY LOSSES
RELATING TO LICENSEE, OR LICENSEE'S BUSINESS, SUCH AS LOST DATA, LOST PROFITS,
BUSINESS INTERRUPTION, OR LOST SAVINGS, EVEN IF LICENSOR OR ITS THIRD PARTY
LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR (B) ANY CLAIM
BY ANY THIRD PARTY. SOME STATES OR JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR
LIMITATION OF INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES, SO THE FOREGOING
LIMITATIONS MAY NOT APPLY. IF LICENSEE COULD HAVE AVOIDED DAMAGES BY TAKING
REASONABLE CARE, NEITHER LICENSOR NOR ITS THIRD PARTY LICENSORS WILL BE LIABLE
FOR SUCH LOSSES. IN NO EVENT SHALL LICENSOR OR ITS THIRD PARTY LICENSORS' TOTAL
LIABILITY FOR ALL DAMAGES (WHETHER IN CONTRACT, TORT, INCLUDING NEGLIGENCE OR
OTHERWISE) EXCEED THE PURCHASE PRICE OF THE ROSEDA STONE PRODUCT.
D. STATUTORY CONSUMER RIGHTS: NOTHING IN THIS LICENSE SHALL AFFECT THE
STATUTORY RIGHTS, IF ANY, DETERMINED TO BE APPLICABLE TO ANY PARTY DEALING AS A
CONSUMER.
E. FRAUD, DEATH, OR PERSONAL INJURY: NOTHING IN THIS LICENSE LIMITS LICENSOR'S
LIABILITY FOR FRAUD, DEATH, OR PERSONAL INJURY CAUSED BY THE NEGLIGENCE OF
LICENSOR, ITS OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS OR AGENTS.
F. COOLING-OFF/REVOCATION PERIODS: LICENSEE SHALL NOT HAVE THE RIGHT TO CANCEL
THIS LICENSE DURING ANY APPLICABLE COOLING-OFF/REVOCATION PERIOD UNLESS THE
LAWS OF THE JURISDICTION APPLICABLE TO LICENSEE EXPRESSLY REQUIRE SUCH A
COOLING OFF/REVOCATION PERIOD TO BE PROVIDED TO LICENSEE.
11. EXCLUSIVE REMEDIES: ANY LIABILITY OF LICENSOR FOR A DEFECTIVE COpy OF THE
ROSEDA STONE PRODUCT WILL BE LIMITED EXCLUSIVELY TO REPLACEMENT OF LICENSEE'S
COPY OF THE ROSEDA STONE PRODUCT WITH ANOTHER COPY, FREE OF CHARGE. THE
FOREGOING REMEDY IS NOT INTENDED TO DEPRIVE LICENSEE OF ANY APPLICABLE
MANDATORY PROTECTIONS THAT MAY APPLY TO THIS LICENSE BY OPERATION OF LAW.
12. TERMINATION AND SURVIVAL:
A. This License is effective until terminated. By accepting this License, Licensee authorizes Licensor to
immediately terminate Licensee's rights, without notice, under this License, including access to the
Rosetta Stone Product, if Licensee fails to comply with any terms of this License. Restrictions imposed
by Licensor for a breach of this License include, but are not restricted to:
(i) Terminating the IP address of a non-compliant workstation;
(ii) Terminating account access to the Rosetta Stone Product.

B. Upon receipt of notice of termination of this License, Licensee must immediately cease all use and
delete all copies of the Rosetta Stone Product. Licensor may require Licensee to certify in writing that
Licensee has complied with this requirement. The provisions of Sections 8, 10, 11, 12, 13, 14 and 15

6

shall survive the termination of this License for any reason, but this sentence shall not imply or create any
continued right to use Rosetta Stone Products after termination of this License.
13. GOVERNING LAW AND FORUM:
A. This License will be governed in all respects, by and construed in accordance with the laws of the
Commonwealth of Virginia, USA, without reference to its principles relating to conflicts of law. Licensor
and Licensee agree that any action arising out of or related to this License must be brought exclusively in
a US state or Federal court in the Commonwealth of Virginia. Licensor and Licensee consent to the
personal jurisdiction of the Commonwealth of Virginia and acknowledge that venue is proper in any US
state or Federal court in the Commonwealth of Virginia. Licensee and Licensor each waive any objection
it has or may have in the future with respect to the foregoing.
B. If the laws of Virginia are expressly determined not to be applicable to this License by a court of
competent jurisdiction, then the applicable law will be the law of the jurisdiction of where the Licensee
purchased the product and the jurisdiction of such court shall be non-exclusive.
C. This License shall not be governed by the United Nations Convention on Contracts for the
International Sale of Goods, the application of which is expressly excluded.
D. Notwithstanding the above, Licensor shall have the right to commence and prosecute any legal or
equitable action or proceeding before any court of competent jurisdiction to obtain injunctive or other relief
against Licensee in the event that, in the opinion of Licensor, such action is necessary or desirable.
14. ENTIRE AGREEMENT, TRANSLATION, ASSIGNMENT:
A. Except as expressly provided herein, this License constitutes the entire agreement between the
parties with respect to the use of the Rosetta Stone Product and supersedes all prior or
contemporaneous understandings regarding such subject matter. No amendment to or modification of
this LIcense, or action, or delay, will be binding unless in writing and signed by Licensor.
B. In the event of a dispute between the English and any translated version, the English version of this
License shall prevail.
C. Licensor may assign this LIcense, in whole or in part, at any time with or without notice to Licensee.
Licensee may not assign, delegate or otherwise transfer this License, or assign, transfer or sublicense
any rights in the Rosetta Stone Product.
15. SEVERABILITY: All provisions of this License apply to the maximum extent permitted by applicable
law. If any part of this License is determined to be invalid or unenforceable pursuant to applicable law,
then the invalid or unenforceable provision will be deemed superseded by a valid, enforceable provision
that most closely matches the intent of the original provision and the remainder of this License will
continue in effect.
16. EXPORT: Licensee acknowledges that the Rosetta Stone Products are subject to U.S. export
jurisdiction. Licensee agrees to comply with all applicable international and national laws that apply to the
Rosetta Stone Product, including the U.S. Export Administration Regulations and Office of Foreign Assets
Control Regulations, as well as end-user, end-use, and destination restrictions issued by U.S. and other
governments.
17. FORCE MAJEURE: No failure or omission by either party to carry out or observe any of the terms
and conditions of this License (other than payment obligations) shall give rise to any claim against such
party or be deemed a breach of this License if such failure or omission arises from an act of God or any

7

other force majeure, an act of any government, or any other cause beyond the reasonable control of the
affected party.
18. WAIVER: Failure by either Licensee or Licensor to insist upon strict compliance with any of the
terms, covenants, or conditions of this License shall not be deemed a waiver of that term, covenant, or
condition or of any other term, covenant, or condition of this License. Any waiver of relinquishment of any
right or power hereunder at anyone or more times shall not be deemed a waiver or relinquishment of that
right or power at any other time.
19. FURTHER INFORMATION: If Licensee has any questions regarding this License or if Licensee
wishes to request any information from Licensor please use the contact information listed in ANNEX 1, for
the Licensor's office serving Licensee's jurisdiction.

ANNEX 1 TO GLOBAL END USER LICENSE AGREEMENT

Licensee Information for Contacting Licensor, Product Support Information, Privacy Policy, and,
System Requirements.
UNITED STATES
Contact Information
135 W. Market St. Harrisonburg, VA 22801
[e-mail]
http://www.rosettastone.com
Product Support Information
http://www.rosettastone.com/global/support
Privacy Policy:
http://www.rosettastone.com/global/privacy
System Requirements
http://www.rosettastone.com/qlobal/support/system-requirements
UNITED STATES (SPANISH)
Contact Information

135 W. Market 51. Harrisonburg, VA 22801
[e-mail]
http://espanol.rosettastone.com
Product Support Information
http://espanol.rosettastone .com/q lobal/support
Privacy Policy:
http://espanol.rosettastone.com/qlobal/privacy
System Requirements
http://espanol.rosettastone.com/qlobal/support/system-requirements
UNITED KINGDOM
Contact Information
378 Clapham Road, London SW9 9AR United Kingdom
http://www.rosettastone.co.uk
[e-mail]
Product Support Information
http://www.rosettastone.co.uk/global/support/
Privacy Policy
http://www.rosettastone.co.uk/global/privacy
System Requirements
http://www.rosettastone.co.uk/qlobal/support/system-requirements

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GERMANY
Contact Information
Theresie, Franziska-Bilek-Weg, 80339 Munich
http://www.rosettastone.de
[e-mail]
Product Support Information
http://www.rosettastone.de/globallhilfe
Privacy Policy
http://www.rosettastone.de/globalldatenschutzrichtlinie
System Requirements
http://www.rosettastone.de/globallhilfe/system-anforderungen

FRANCE
Contact Information
378 Clapham Road, London SW9 9AR United Kingdom
http://www.rosettastone.fr
cs. [e-mail]
Product Support Information
http://www.rosettastone.fr/globaIIsupport!
Privacy Policy
http://www,rosettastoneJr/us assets/documentation/France Privacy Policy. pdf
System Requirements
http://www.rosettastone.fr/g loballsupport/system-reg uirements

ITALY
Contact Information
378 Clapham Road, London SW9 9AR United Kingdom
http://www.rosettastone.it
[e-mail]
Product Support Information
http://www. rosetta stone ,iUg lobal/su pport!
Privacy Policy
http://www.rosettastone.iUus assets/documentationlltaly Privacy Policy. pdf
System Requirements
http://www,rosettastone.iUgloballsupport/system-requirements

SPAIN
Contact Information
378 Clapham Road, London SW9 9AR United Kingdom
http://www.therosettastone.es
[e-mail]
Product Support Information
http://www.therosettastone.es/globallsupport!
Privacy Policy
http://www.therosettastone.es/us assets/documentation/Spain Privacy Policy. pdf
System Requirements
http://www.therosettastone.es/globallsupport/system-requirements

JAPAN
Contact Information
Jingumae M-SQUARE, 1-4-16, Jingumae, Shibuya-ku, 150-0001 Tokyo, Japan
http://www.rosettastone.co.jp
[e-mail]
Product Support Information
http://www.rosettastone.co.jp/support/
Privacy Policy

9

http://www.rosettastone.co.jp/abouUprivacy-policy/
System Requirements
http://www.rosettastone.co.jp/supporUsystem-requirements

KOREA
Contact Information
14F Jace Tower, Yeoksam 1-Dong, Gangnam-Gu, Seoul, Republic of Korea, 135-935
http://www.rosettastone.co.kr
[e-mail]
Product Support Information
http://rosettastone.co.kr/customer/list. php?code=q na
Privacy Policy
http://www.rosettastone.co.kr/PrivacyPolicy/
System Requirements
http://rosettastone.co.kr/rosetta/roset09.htm

For Licensees not in one of the above listed countries, Licensee may contact the location closest to
Licensee, or the location where Licensee purchased the product.

10

SPAZIANO

EXHIBIT 2

EXHIBIT FILED

UNDER SEAL

SPAZIANO

EXHIBIT 3

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
ROSETTA STONE LTD.
Plaintiff,
CIVIL ACTION NO.1 :09cv736
(GBL/TCB)

v.
GOOGLEINC.
Defendant.

DEFENDANT GOOGLE INC.'S RESPONSES TO PLAINTIFF
ROSETTA STONE LTD.'S FIRST SET OF INTERROGATORIES
Pursuant to Rules 26 and 33 of the Federal Rules of Civil Procedure and Local Rule
26(c), Defendant Google Inc. ("Google") hereby responds to Plaintiff Rosetta Stone Ltd.'s
("Rosetta Stone") First Set of Interrogatories ("the Interrogatories") to Defendant Google Inc.

Objections Applicable to Rosetta Stone's Instructions, Definitions, And All Requests
Google objects to each of the Interrogatories on each and every one of the following
grounds, which are incorporated into and made a part of Google's response to each and every
individual request:
1.

Google objects to the Interrogatories on the grounds that they seek to impose

obligations upon Google not required by the Federal Rules of Civil Procedure.
2.

Google objects to the Interrogatories on the ground that they call for information

that is not relevant to the subject matter of the pending action, nor reasonably calculated to lead
to the discovery of admissible evidence, including to the extent they call for information before
July 10, 2004. Google's responses to these interrogatories will be limited to information after
July 10, 2004.

4.

Google objects to the Interrogatories to the extent that they call for the disclosure

ofinfonnation subject to the attorney-client privilege, the attorney-work product doctrine, or any
other applicable privilege.
5.

Google objects to the Interrogatories on the grounds that they seek infonnation

protected by the right to privacy under state and/or federal laws.
6.

Rosetta Stone objects to the Interrogatories to the extent that they seek

infonnation that is not known by it after making reasonable inquiries regarding the infonnation.
OBJECTIONS AND RESPONSES TO INTERROGATORIES
INTERROGATORY NO.1:

With respect to Google's "Third Affmnative Defense: First Sale Doctrine," set forth in
its Answer in this lawsuit, state all facts that support Google's avennent that "the claims made in
this Complaint are barred, in whole or in part, by the first sale doctrine," and identify all persons
with knowledge of this affinnative defense, as well as the substance of each such person's
knowledge.
RESPONSE TO INTERROGATORY NO.1:

Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's affInnative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.
Subject to and without waiving the foregoing objections, Google responds that many of
the Sponsored Link ads appearing for a Google search on a Rosetta Stone trademark are for
resellers of genuine Rosetta Stone products. These genuine Rosetta Stone products sold by the
advertisers are materially identical to the products that Rosetta Stone itself sells or has previously
sold. The first sale doctrine prevents a producer from controlling distribution of its trademarked
product beyond the first sale of the product. Thus, the doctrine permits the use of a trademark
holder's mark to resell genuine goods that are not materially different from the goods the
2

trademark holder itself sells. With regard to these advertisers that sell genuine goods not
materially different from Rosetta Stone's own goods, their use of Rosetta Stone's marks does not
constitute infringement. This includes both authorized Rosetta Stone resellers like Amazon.com
and unauthorized resellers of genuine Rosetta Stone products on sites such as eBay.
Pursuant to Fed. R. Civ. Pro. 33(d), Google responds that additional information
responsive to this request is available in a spreadsheet Google will produce reflecting the identity
of all displayed ads for which an advertiser bid on an alleged Rosetta Stone trademark as a
keyword. In addition, Google expects that discovery will reveal agreements between Rosetta
Stone and resellers, sales and other agreements to other third party advertisers, and the identity of
individuals at Rosetta Stone and advertising entities having knowledge about these facts.

INTERROGATORY NO.2:
With respect to Google's "Fourth Affirmative Defense: Functionality," set forth in its
Answer in this lawsuit, state all facts that support Google's averment that "the claims made in
the Complaint are barred, in whole or in part, on the basis that any marks at issue are functional,"
including but not limited to all facts that support the conclusion that any of the Rosetta Stone
Marks are functional. In particular, identify each Rosetta Stone Mark you contend is functional
and identify all persons with knowledge of this affirmative defense, as well as the substance of
each such person's knowledge.

RESPONSE TO INTERROGATORY NO.2:
Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's affirmative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.
Subject to and without waiving the foregoing objections, Google responds that all of
Rosetta Stone's alleged trademarks are functional to the extent Rosetta Stone asserts that the use
of any of its alleged marks as a keyword constitutes an infringing use. All of Rosetta Stone's

3

alleged marks are functional in the keyword context because they serve an indexing function that
is separate and apart from use as a trademark.
Daniel Dulitz and Jonathan Alferness are the persons most knowledgeable of how words
serve an indexing function in Google's advertising programs. In addition, Google expects that
further discovery, including review of Rosetta Stone's still-incomplete document production and
depositions of its employees, will reveal additional facts and persons with knowledge of this
defense.

INTERROGATORY NO.3:
With respect to Google's "Seventh AffInnative Defense: Laches," set forth in its Answer
in this lawsuit, state all facts that support Google's averment that "Plaintiffs claims are barred
by the doctrine oflaches," including but not limited to what Rosetta Stone allegedly failed to do
that supports this avennent and what prejudice or harm Google has suffered as a result thereof,
and identify all persons with knowledge of this affInnative defense, as well as the substance of
each such person's knowledge.

RESPONSE TO INTERROGATORY NO.3:
Google objects to this Interrogatory on the grounds that it (i) is premature in that it seeks
full infonnation about Google's affmnative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.
Subject to and without waiving the foregoing objections, Google.responds that, in April
of 2004, Google announced a change in its advertising program policies regarding the use of
trademarks as keywords. Pursuant to that policy, Google would no longer disable upon request
and investigation advertising by advertisers who bid on alleged trademarks as keywords. Alana
Karen has knowledge of that policy change, its announcement generally, and its announcement
to Google's advertisers.

4

Notwithstanding Google's express public policy concerning use of trademarks as
keywords and Rosetta Stone's status as an AdWords customer since 2002, Rosetta Stone did not
file suit against Google until July 10,2009. During the intervening time, Google has invested
significant resources in developing its advertising programs and in enforcing its trademark
policies, including enforcing its trademark policies when advertisers have improperly used the
alleged Rosetta Stone trademarks. Alana Karen and Rose Hagan are the persons most
knowledgeable of the investment of such resources and implementation ofGoogle's trademark
policies.
Currently, Google believes that persons identified in Rosetta Stone's Answers to
Interrogatories No.1 and 2 have additional information that will support Google's defense. In
addition, Google expects that further discovery, including review of Rosetta Stone's stillincomplete document production and depositions of its employees, will reveal additional facts
and persons with knowledge of this defense.

INTERROGATORY NO.4:
With respect to Google's "Eighth Affirmative Defense: Generic Terms," set forth in its
Answer in this lawsuit, state all facts that support Google's averment that "The claims made in
the Complaint are barred, in whole or in part, on the basis that some or all marks at issue are
generic." In particular, identify which of the Rosetta Stone Marks you assert are generic and
identify all persons with knowledge of this affirmative defense as well as the substance of each
such person's knowledge.

RESPONSE TO INTERROGATORY NO.4:
Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's affirmative defenses at this early stage of discovery; (ii)
improperly seeks the disclosure of expert testimony before such disclosure is required; and (iii)
to the extent that this Interrogatory purports to require Google to articulate each and every

5

minute detail which may support the referenced defense, it is overly broad and unduly
burdensome.
Subject to and without waiving the foregoing objections, Google responds that several of
Rosetta Stone's alleged trademarks are generic and therefore invalid. These include: "Global
Traveler," "Language Library," "Dynamic Immersion," "Sharedtalk," "Totale," and "Audio
Companion." This is evident from the use that other entities make of these words, for example,
through Internet search engine results and the dictionary meanings of these words, considered
along with how Rosetta Stone uses these marks. For example, Rosetta Stone's website invites
consumers to learn about Rosetta Stone's "unique dynamic immersion method."
http://www.rosettastone.comlpersonallhow-it-works.
In addition to expert testimony on this subject, Google expects that further discovery,
including review of Rosetta Stone's still-incomplete document production and depositions of its
employees, will reveal additional facts and persons with knowledge of this defense.

INTERROGATORY NO.5:
With respect to Google's "Tenth Affirmative Defense: Waiver, Acquiescence and
Estoppel," set forth in its Answer in this lawsuit, state all facts that support Google's averment
that "Each of the purported claims set forth in the Complaint is barred, by the doctrines of
waiver, acquiescence, and estoppel," including but not limited to: (a) what conduct, actions and
communications by Rosetta Stone support this averment; (b) how Google relied on such conduct,
actions and communications; and (c) what prejudice or harm Google has suffered as a result
thereof. In addition, identify all persons with knowledge of these affirmative defense, as well as
the substance of each such person's knowledge.

RESPONSE TO INTERROGATORY NO.5:
Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's affIrmative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.

6

Subject to and without waiving the foregoing objections, Google hereby incorporates by
reference its response to Interrogatory No.3. Further, Google responds that since 2002, Rosetta
Stone has advertised through Google's advertising programs, has had actual and constructive
knowledge of Google's trademark policies and practices with respect to the Rosetta Stone marks,
and has had extensive communications with Google. Pursuant to Rule 33(d), Google refers
Rosetta Stone to documents that Google has produced which reflect and/or refer to those
communications and persons with knowledge of them. Notwithstanding this extensive history
between the parties (which did not include any indication by Google that it would consider
changing the application of its trademark policies to the Rosetta Stone trademarks), and Rosetta
Stone's continued advertising through Google's advertising programs pursuant to Google's
policies, until July 2009, Rosetta Stone did not commence any legal action against Google.
Rosetta Stone's inaction thus led Google to believe that Rosetta Stone did not believe that
Google's actions were harming Rosetta Stone or infringing its rights. Google employees Alana
Karen, Terri Chen, Bill Lloyd, Mickey Ryder, and Cory Louie have information about this topic.
In addition, during the time period Rosetta Stone complains of, it had agreements with
resellers to resell Rosetta Stone products and with affiliates to drive traffic to Rosetta Stone's
website. Indeed, according to documents produced by Rosetta Stone, Rosetta Stone expressly
approved certain of its affiliates to bid on its alleged trademarks as keywords. Currently, it
appears that April Garvey, Daavi Zain, and Bernard Hamman of Rosetta Stone have information
about this subject, and that the persons identified in Rosetta Stone's Answers to Interrogatories
No.1 and 2 have additional information that will support Google's defense. In addition, Google
expects that further discovery, including review of Rosetta Stone's still-incomplete document

7

production and depositions of its employees, will reveal additional facts and persons with
knowledge of this defense.

INTERROGATORY NO.6:
With respect to Google's "Fourteenth Affirmative Defense: Unclean Hands," set forth in
its Answer in this lawsuit, state all facts that support Google's averment that "Plaintiffs claims
are barred by the doctrine of unclean hands," including but not limited to what misconduct
Rosetta Stone engaged in that supports this averment and what personal injury or harm Google
has suffered as a result thereof, and identify all persons with knowledge of this affirmative
defense, as well as the substance of each such person's knowledge.

RESPONSE TO INTERROGATORY NO.6:
Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's amrmative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.
Subject to and without waiving the foregoing objections, Google responds that Rosetta
Stone has been using its alleged trademarks in an anticompetitive way to prohibit advertisers
from using those marks to fairly refer to products and services and to hinder consumer access to
competitive and other information. This includes Rosetta Stone's attempts to use trademark law
to prohibit its resellers from advertising genuine Rosetta Stone products. In addition, Google
expects that further discovery, including review of Rosetta Stone's still-incomplete document
production and depositions of its employees, will reveal additional facts and persons with
knowledge of this defense.

INTERROGATORY NO.7:
With respect to Google's "Seventeenth Affirmative Defense: Failure to Mitigate," set
forth in its Answer in this lawsuit, state all facts that support Google's averment that "The claims
made in the Complaint are barred, in whole or in part, because of a failure to mitigate damages,
if such damages exist, "including but not limited to what steps Rosetta Stone allegedly failed to
take to mitigate its damages and the effect that such failures allegedly caused on Rosetta Stone's

8

claim for damages, and identify all persons with knowledge ofthis affirmative defense, as well
.
as the substance of each such person's knowledge.

RESPONSE TO INTERROGATORY NO.7:
Google objects to this Interrogatory on the grounds that it is premature, in that it (i) seeks
full information about Google's affmnative defenses at this early stage of discovery;
(ii) improperly seeks the disclosure of expert testimony before such disclosure is required; and
(iii) to the extent that this Interrogatory purports to require Google to articulate each and every
minute detail which may support the referenced defense, it is overly broad and unduly
burdensome.
Subject to and without waiving the foregoing objections, Google responds that assuming
for purposes of this Interrogatory Response that liability is found, Rosetta Stone failed to use all
ordinary care and make all reasonable exertions to render the alleged injury to it as light as
possible. Rosetta Stone could have reduced the amount of its claimed damages by: enforcing
contractual agreements with resellers and affiliates not to advertise using Rosetta Stone's alleged
trademarks; taking legal actions against any advertisers whose advertising is at issue in this
action; taking legal actions against advertisers and/or Google as soon as Rosetta Stone first
became aware of the practices about which it complains; not participating in Google's
advertising program; not bidding as high as it did to place advertisements through Google; not
using affiliates; not using resellers; and not bidding to have more than one Rosetta Stone ad
appear in response to any given search query.
Google further responds that Rosetta Stone's retained damages expert James E.
Malackowski appears to have knowledge related to Rosetta Stone's ability to enforce its own
policies with its resellers and affiliates as he assumes Rosetta Stone will be 100% effective in
mitigating all damages arising from any use of the alleged trademarks by Rosetta Stone's

9

resellers and affiliates. See Expert Report of James E. Ma1ackowski, December 14,2009, p. 17
("Therefore, post-September 2008, I have assumed that 0% of affiliates utilized Rosetta Stone
branded paid search terms. ").
In addition, Goog1e expects that further discovery, including review of Rosetta Stone's
still-incomplete document production and depositions of its employees, will reveal additional
facts and persons with knowledge of this defense.

INTERROGATORY NO.8:
With respect to Goog1e' s "Twentieth Affirmative Defense: Fraud," set forth in its Answer
in this lawsuit, state all facts that support Goog1e's averment that "The claims made in the
Complaint are barred, in whole or in part, by fraud on the United States Patent and Trademark
Office." In particular, identify, which ofthe Rosetta Stone Marks were prosecuted and/or
obtained through fraud on the United States Patent & Trademark Office; the exact fraudulent
conduct committed, including why such conduct constituted fraud, and identify all person with
knowledge of this affirmative defense, as well as the substance of their knowledge.

RESPONSE TO INTERROGATORY NO.8:
Goog1e objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Goog1e's affinnative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Goog1e to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.
Subject to and without waiving the foregoing objections, Goog1e responds that given the
generic and descriptive nature of several of Rosetta Stone's alleged trademarks, those marks may
have been obtained by fraud. Google expects that Rosetta Stone employee Jeanne May is likely
to have information related to the registration of Rosetta Stone's alleged trademarks and that
further discovery, including review of Rosetta Stone's still-incomplete document production and
depositions of its employees, will reveal facts and persons with knowledge of this defense.

10

INTERROGATORY NO.9:

With respect to Google's "Twenty-First Affirmative Defense: Abandonment," set forth in
its Answer in this lawsuit, state all facts that support Google's averment that "The claims made
in the Complaint are barred, in whole or in part, by abandonment of any marks at issue." In
particular, identify which of the Rosetta Stone Marks you assert have been abandoned and all
persons with knowledge of this affirmative defense, as well as the substance of each such
person's knowledge.

RESPONSE TO INTERROGATORY NO.9:
Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's affirmative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.
Subject to and without waiving the foregoing objections, Google expects that further
discovery, including review of Rosetta Stone's still-incomplete document production and
depositions of its employees, will reveal facts and persons with knowledge of this defense.

INTERROGATORY NO. 10:
With respect to Google's "Twenty-Second Affirmative Defense: Third-Party Use," set
forth in its Answer in this lawsuit, state all facts that support Google's averment that "The claims
made in the Complaint are barred, in whole or in part, by reason of other parties' use of any
marks at issue." In particular, identify all third parties whose use of Rosetta Stone marks you
contend form the basis for this affirmative defense; describe the exact use such third parties
made of the Rosetta Stone Marks; and identify all persons with the knowledge of this affirmative
defense, as well as the substance of each such person's knowledge.

RESPONSE TO INTERROGATORY NO. 10:
Google objects to this Interrogatory on the grounds that it (i) is premature, in that it seeks
full information about Google's affinnative defenses at this early stage of discovery; and (ii) to
the extent that this Interrogatory purports to require Google to articulate each and every minute
detail which may support the referenced defense, it is overly broad and unduly burdensome.

11

Subject to and without waiving the foregoing objections, Google responds that the choice
to advertise through Google's advertising programs, including which keywords to bid on, what
to title an ad, the creative text of the ad, and the landing page associated with the ad, is made
exclusively by third party advertisers. Google advises all of its advertisers that they are
responsible for ensuring that their ads do not infringe the rights of any other party. Facts relating
to third parties who advertised through Google's advertising programs using an alleged Rosetta
Stone trademark as a keyword are reflected in a spreadsheet that will be produced by Google.
Pursuant to Rule 33(d), Google refers Rosetta Stone to that spreadsheet, and identifies David
Baker as having knowledge about the data it reflects.
INTERROGATORY NO. 11:
Identify each communication made by Google in connection with this lawsuit by which it
instructed any of its officers, directors, employees, contractors, agents or other persons to retain
documents concerning this lawsuit and/or the events, conduct, incidents or factual averments set
forth in the Complaint or Answer in this lawsuit, or otherwise implemented a "litigation hold"
for this lawsuit. In particular, identify each person to whom such communication was directed,
including that person's title or position, and the date(s) on which each such person received such
communication.
RESPONSE TO INTERROGATORY NO. 11:
Google objects to this Interrogatory on the grounds that it (i) seeks information protected
by the attorney-client privilege, attorney work-product doctrine, or other applicable privilege;
and (ii) is neither relevant to the claim or defense of any party nor reasonably calculated to lead
to the discovery of admissible evidence.
For the reasons stated above, Google does not respond further to this interrogatory.
INTERROGATORY NO. 12:
Identify each person from whom Google has collected and reviewed documents for
possible production in connection with this lawsuit, including the person's title or position.

12

RESPONSE TO INTERROGATORY NO. 12:

Google objects to this Interrogatory on the grounds that it (i) seeks infonnation protected
by the attorney-client privilege, attorney work-product doctrine, or other applicable privilege;
and (ii) is neither relevant to the claim or defense of any part nor reasonably calculated to lead to
the discovery of admissible evidence.
For the reasons stated above, Google does not respond further to this interrogatory.

INTERROGATORY NO. 13:
Identify each person who was responsible for or took part in identifying and/or collecting
documents from the persons identified in response to Interrogatory No. 12 above or any other
source for possible production in response to any document production request from Rosetta
Stone in this lawsuit, including that person's title or position, and describe in detail their
responsibility for and/or actions they took relating to such document identification/collection
effort.

RESPONSE TO INTERROGATORY NO. 13:
Google objects to this Interrogatory on the grounds that it (i) seeks infonnation protected
by the attorney-client privilege, attorney work-product doctrine, or other applicable privilege;
and (ii) is neither relevant to the claim or defense of any part nor reasonably calculated to lead to
the discovery of admissible evidence.
For the reasons stated above, Google does not respond further to this interrogatory.

INTERROGATORY NO. 14:
Identify each database under the custody or control of Google that was reviewed and/or
searched in order to identify and/or collect documents that might be responsive to any document
production request from Rosetta Stone in this lawsuit and the search criteria and/or search tenns

used to conduct that review and/or search.

RESPONSE TO INTERROGATORY NO. 14:

Google objects to this Interrogatory on the grounds that it (i) seeks infonnation protected
by the attorney-client privilege, attorney work-product doctrine, or other applicable privilege; (ii)
is neither relevant to the claim or defense of any part nor reasonably calculated to lead to the
13

discovery of admissible evidence; and (iii) is vague and ambiguous in its instructions to "
[i]dentify each database."
For the reasons stated above, Google does not respond further to this interrogatory.

INTERROGATORY NO. 15:
For the period February I, 2002 through the present, identify each person who was ever
responsible for, in charge of or had a non-clerical role concerning Rosetta Stone's advertising on
or through the Google AdWord's Program, including but not limited to each such person's job
title; a brief description of each such person's responsibilities; and, if not currently an employee
of Google, the current or last known address for that person.

RESPONSE TO INTERROGATORY NO. 15:
Google objects to this Interrogatory on the grounds that it is overly broad and unduly
burdensome; (ii) is neither relevant to the claim or defense of any part nor reasonably calculated
to lead to the discovery of admissible evidence to the extent it asks for information prior to July
10, 2004; and (iii) is vague and ambiguous, overly broad and unduly burdensome with regard to
the phrases "in charge of' and "had a non-clerical role concerning Rosetta Stone's advertising on
or through the Google AdWord's Program."
Subject to and without waiving the foregoing objections, Google responds that following
individuals are or were Customer Service Representatives dedicated to Rosetta Stone's
advertising account with Google:
Christina Aguiar

Fred Perrotta

Greg Kaye

Tara Conrad

Julia Burg

Suzy Nicoletti

Lacey Schnell

Jennifer King

Brian Wright

Fiona Sortor

14

INTERROGATORY NO. 16:

For the period February 1,2002 through the present, identify each person who was ever
responsible for, in charge of or had a non-clerical role relating to the training of Google
employees who assisted Google advertisers in their advertising on or through the Google
AdWords Program, including but not limited to each such person's job title; a brief description
of each such person's responsibilities; and, ifnot currently an employee of Google, the current or
last known address for that person.

RESPONSE TO INTERROGATORY NO. 16:
Google objects to this Interrogatory on the grounds that it (i) is overly broad and unduly
burdensome to the extent it requests information about each person who has been involved with
training Google advertising employees, each person "responsible for" Google advertising
employees, each person "in charge of' Google advertising employees, and information about
every employee who "assisted Google advertisers in their advertising"; (ii) is neither relevant to
the claim or defense of any part nor reasonably calculated to lead to the discovery of admissible
evidence to the extent it asks for information prior to July 10, 2004 and asks for information that
does not relate to Rosetta Stone, including the identification of every person involved in training
Google employees who assisted every one of Google's advertisers; and (iii) is vague and
ambiguous, overly broad and unduly burdensome with regard to the phrases "in charge of' and
"had a non-clerical role relating to the training of Google employees who assisted Google
advertisers in their advertising on or through the Google AdWords Program."
Subject to and without waiving the foregoing objections, Google identifies the following
individuals who worked in the group responsible for AdWords training at some time since 2004:
Ian Stuart
Scott MaCarthy
Justin Vinluan
Dustin Cu
Adam Varro
Jenny Blake
Allison Hobbs
Seth Marbin
15

Ashley Boehm

Asta So

Lauren Cooke

Danny Hausman

Tyrona Heath

Sarah Devereaux

Melissa Porter

Jane Hong

Jodi Schwartz

Ryan Gibson

Lorri Stosik

Rachel Barak

DATED: January 20, 2010
GOOGLE INC.
By counsel

/s/
Jonathan D. Frieden, Esquire (VSB No. 41452)
Stephen A. Cobb, Esquire (VSB No. 75876)
ODIN, FELDMAN & PITTLEMAN, P.C.
9302 Lee Highway, Suite 1100
Fairfax, Virginia 22031
[phone]
[phone] (facsimile)
[e-mail]
[e-mail]
Margret M. Caruso, Esquire (Admitted Pro Hac Vice)
QUINN, EMANUEL, URQUHART, OLIVER & HEDGES, LLP
555 Twin Dolphin Drive, Suite 560
Redwood Shores, California 94065
[phone]
[phone] (facsimile)
[e-mail]
Counsel for Defendant Google Inc.

16

CERTIFICATE OF SERVICE

I hereby certify that a true and accurate copy of the foregoing Defendant Google Ine.'s

Responses to Plaintiff Rosetta Stone Ltd.'s First Interrogatories was transmitted via
electronic-mail and fIrst-class mail, this 20th day of January, 2010, to:
Terence P. Ross
Crowell Moring
1001 Pennsylvania Ave., N.W.
Washington, D.C. 20004-2595
Phone: [phone]
Fax: [phone]
Email: [e-mail]

Counsel for PlaintiffRosetta Stone Ltd.

/s/
Cheryl A. Galvin

17

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
ROSE'n'A STONE LTD.
Plaintiff,
: CIVIL ACTION NO.1 :09cv736
: (GBL/TCB)

v.

I

r

GOOGLEINC.

I

r
r
I

Defendant.

I

r

VERIFICATION OF TERRI CHEN
I, Terri Chen, declare:
I am Senior Trademark Counsel at Google Inc. ("Googtc"). I am authorized to execute
this verification on behalfof Google. I have read Defendant Google Inc.'s Responses to Plaintiff
.Rosetta Stone Ltd.'s First Set of Interrogatories. The responses contained therein are true and
correct to the best of my knowledge.

I declare under penalty ofperjury under the laws of the United States that the foregoing is
true and correct.

Executed this 20th day of January, 2010, at Mountain View, California.

Terri Chen

18

SPAZIANO

EXHIBIT 4

Page 1 of 109

Form 10-K

10-K 1 dlOk.htm FORM lO-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
(Mark One)
[RJ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2009
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission file number: 000-50726

Google Inc.
(Exact name of registrant as specified in its charier)

Delaware

77-0493581

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1600 Amphitheatre Parkway
Mountain View, CA 94043
(Address of principal executive offices) (Zip Code)

[phone]
(Registrant's telephone number. including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class

Name of Exchange on Which Registered

Class A Common Stock, $0.001 par value

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Securities registered pursuant to Section 12(g) of the Act:
TItle of Each Class

Class 8 Common Stock, $0.001 par value
Options to purchase Class A Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes [RJ No 0
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Act Yes 0 No [RJ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15
(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been SUbject to such filing requirements for the past 90
days. Yes [RJ No 0
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S­
T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes lRl No 0
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of
this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 1O-K or any
amendment to this Form 10-K. 0
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non­

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Form 10-K

Page 2 of 109

accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," Uaccelerated
filer" and 'smaller reporting company" in Rule 12b·2 of the Exchange Act. {Check one}:
Non-accelerated filer 0
Smaller reporting company 0
Large accelerated filer ~ Accelerated filer 0
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes 0 No I]]
At June 30, 2009, the aggregate market value of shares held by non-affiliates of the registrant (based upon the
closing sale price of such shares on The Nasdaq Global Select Market on June 3D, 2009) was $97.782,305,918.
At January 29, 2010, there were 243,872,592 shares of the registrant's Class A common stock outstanding
and 74,106,699 shares of the registrant's Class B common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for the 2010 Annual Meeting of Stockholders are incorporated
herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy
statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year
ended December 31, 2009.

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4119/2010

Fonn 10-K

Page 64 of 109

Google Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value per share)
As of December 31.

2008

Assets
Current assets:
Cash and cash equivalents
Marketable securities
Accounts receivable, net of allowance of S80,086 and $78,884
Deferred income taxes, net
Income taxes receivable, net
Prepaid revenue share, expenses and other assets
Total current assets
Prepaid revenue share, expenses and other assets, non-current
Deferred income taxes, net, non-current
Non-marketable equity securities
Property and equipment, net
Intangible assets, net
Goodwill
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Accrued compensation and benefits
Accrued expenses and other current liabilities
Accrued revenue share
Deferred revenue
Incomes taxes payable, net
Total current liabilities
Deferred revenue, non-current
Income taxes payable, net, non-current
Deferred income taxes, net, non-current
Other long-term liabilities
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $0.001 par value, 100.000 shares authorized;
no shares issued and outstanding
Class A and Class B common stock, $0.001 par value per share':
9,000,000 shares authorized; 315,114 (Class A 240,073, Class B
75,041) and par value of $315 (Class A $240, Class B $75) and
317,772 (Class A243,611, Class B 74,161) and par value of $318
(Class A $244, Class 8 $74) shares issued and outstanding, excluding
26 and zero Class A shares subject to repurchase at December 31,
2008 and 2009
Additional paid-in capital
Accumulated other comprehensive income
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity

2009

$ 8,656,672
7,189,099
2,642,192
286,105

85,160
5,233,843
996,690
4,839,854
$31,767.575

510,197,588
14,287,187
3,178,471
644,406
23,244
836,062
29,166,958
416,119
262,611
128,977
4,844,610
774,938
4,902,565
$40,496,778

$

$

1,404,114
20,178,182
433,846

178,004
811,643
480,263
532,547
218,084
81,549
2,302,090
29,818
890,115
12,515
294,175

315
14,450,338
226,579
13,561,630
28,238,862
531,767,575

215,867
982,482
570,080
693,958
285,080
2,747,467
41,618
1,392,468
311,001

318
15,816,738
105,090
20,082,078
36,004,224
$40,496,778

See accompanying notes.

61

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Page 65 of 109

Ponn 10-K

Googfe Inc.
CONSOL/DATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Year Ended December 31,

2007

Revenues
Costs and expenses:
Cost of revenues (including stock-based compensation
expense of $22,335, $41,340, $47,051)
Research and development (including stock-based
compensation expense of $569,797, $732,418.
$725,342)
Sales and marketing (including stock-based compensation
expense of$131,638, 5206,020, $231,019)
General and administrative (inclUding stock-based
compensation expense of $144,876, $139,988,
$160,642)
Total costs and expenses
Income from operations
Impairment of equity investments
Interest income and other, net
Income before income taxes
Provision for income taxes
Net income
Net income per share of Class A and Class B common stock:
Basic
Diluted

2008

2009

$16,593,986

$21,795,550

$23,650,563

6,649,085

8,621,506

8,844,115

2,119,985

2,793,192

2.843,027

1,461,266

1,946,244

1,983,941

1,279,250
11,509,586
5,084,400

1,802,639
15,163,581
6,631,969
(1,094,757)
316,384
5,853,596
1,626,738
$ 4,226,858

1,667,294
15,338,377
8,312,186

589,580
5,673,980
1,470,260
$ 4,203,720

$
$

13.53
13.29

$
$

13.46
13.31

69,003
8,381,189
1,860,741
$ 6,520,448
$
$'

20.62
20.41

See accompanying notes.
62

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SPAZIANO

EXHIBIT 5

Page I of 143
IO-K 1 a2197162z10-k.htm lO-K
Use these Jinks to rapidly review the document

J A131!E_O.E_CQJ:lTBNTS
IJ'lnEX~rQ_CQN.SQ1,JQt\IEJ2_ElN_AtiCJAL_SJAIEME_NTS.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

\Vasbington, D.C. 20549

Form lO-K
ANNUAL REPORT PURSUANT TO SECnON 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 3],2009

CommisSion file number: 1-34283

Rosetta Stone Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation)

043837082
(I.R.S. Employer Identification No.)

1919 North Lynn St., 7 th FI,

Arlington, Virginia

22209

(Address of principal executive ofl1ces)

(Zip Code)

Registrant's telephone number, including area code:
800-788-0822
Securities Registered Pursuant to Section 12(b) of the Act:
Tillr of Earh ChI"

Namr of E.th Exchange on Whkh Regl,rtred

Common Stock, par value SO.00005 per share

New York Stock Exchange

.Securities Registered Pursuant to Section J2(g) oftbe Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes 0 No lB
Indicate by check mark ifth.e registrant is not required to file reports pursuant to Section 13 or JSed) of the
Act. Yes 0 No ~
Indicate by check mark whether the registrant (I) has filed all reports required to be filed by Section 13 or 15{d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required

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Page 2 of 143

to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes 00

No 0

Indicate by check mark whethet· the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
tiles). Yes 0 No 0
Indicate by check mark if disclosure of delinqucnt filers pursmmt to Item 405 <.1fRcgulation S-K is not contained herein,
and will not be containcd, to the best oftile registrant's knowledge, in definitive proxy or infonnation statements incorporated
by reference in Part !II of this Fonn IO-K or any amendment to this Fonn IO-K. IE!
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer 0

Accelerated tilcr 0

Non-<1ccelcrated filer

IE!

SmalJer reporting company 0

(Do not check if n
smaller reponing: company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes 0

No lEI

Thc aggregate market value of the common stock held by non-affiliates of the registrant \vas approximately
5300 million as ofJune 30, 2009 (based 011 the last sale price of such stock as quoted on the New York Stock Exchange).
As of March 2, 2010, there were 20,251,027 shares of common stock outstanding.
Documents incorporated by reference: Portions of the definitive Proxy Statement to be delivered to stockholders in
connection with the 2010 Annual Meeting of Stockholders to be held on May 26, 2010 are incorponlled by reference into
Part 1fI.

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ROSETTA STONE INC.
CONSOLlDATED BALANCE SHEETS
(in thousands, except per share amounts)
As of December 31.

2009

2008

A.~ets

Current lIssets:
Cash and cash equi"aknts
ReSlrklcd cash
Aecounts receivable (net of nllowllncc for doubtful
rew:cti \'Cly.i
Inventory. net
Prepaid expenses al1d other CUrreltllls,e,S
Deferred income taxes

$
acCOUfl!S

95,188
50

$

30,626
34

oU 1,.349 and 51, I03,

Tolal current assets

31,400
8.984
1.447
.6,020
15.5,089

26,497
4.912
6.598
2.282
70,949

TTopeny and equip,"ent, nel
Goodwill
Intan~iblc assets, net
Defe';'ed incomc·la.,,,.
Olher assets
Total asscts

18,374
34,838
10,704
5,565
872
S 225,442

S

15,727
34,199
10,645
6,828
470
138,8J8

$

S

Liabilities and stockhot<ltrs' e"uity
Currentliabililies:
Accoufl!s payable
Accrued compensation
Other current liabilities
Dcfmed revenue
Income 1"-,, payable
Current ma!urities of long-tmn dcbl-related party (Note 9)
TOlal currentliabifilies
Long-tenn ddll· -rcl~1ed paMy (Note 9)
Dderred revenuc
Othcr long-tenll liabilities
TOlalliabililics

1,605
10,463
25,638
24..291
4,[84

3,207
8,570
20,021
14,382
1,332
4,250

66.181

51.762

1.815

5,660
1J62

1,011
69,007

59,747

963

Commitments ;'nd contingencies (Note 14)
Stockholders' cquit~,:
Class A, Series A-I ConveMible l'refmed Stock, SO.OOI par value; zero and 269
.hares Duthorized; zero and 269 shores issued and outstamling, liquidation
preference of Lero and S26,876 at December 31,2009 Dnd December 3 J, 2008,
rcs!",ctivc!y
CI~ss A, Scries .'\-2 Convertible Preferred Stock, $0.001 par value: zcro and 178
shzlrcs authmized; zero and I is shares issued and outStanding, liquidation
preference of zero and $17,820 at December 31.2009 and December 31, 2008,
respectively
CI:J.ss B Convertible Preferred Srock, SO,OOl par \'alue; zero and 115 shares
aUlh(lrized; zoro and 111 issued and outstanding, 1iquidatio/l preference of zero
and SI1,341 al December 31,2009 and 2008, respectively
Prcferred Siock, SO.OOI par value; 10,000 aud z.ero shares authoriz.ed; zero and zero
shares issued rmd outstanding at December 31. 2009 and December 31, 2008.

26,876

17,820

11,341

rCSI"~elively
CI~ss

A Convenihle Common Stock, $0.00005 par value; zero and 900 shares
ilulhcrizcd;' z.em and zero shllrcs issu·ed and outstanding 2t Dec,ember 31. 2009 and
2008. respectively
Cla.s B Convertible Common Stock,SO.OOOO; par value: zero and 20,000 sh3res
authorized: 7.~ro and 1,ero shares issued and outstanding at December 31, 2009 and
2008. respectively
.
Non-designated c~mmon stock. 50.00005 par value, 190.000 and 39,100 shares
authorized, 10,440 Dnd 1,936 shares issued and oUlstanding at December 31. 2()(J9
and December 31. 200S. resperlh·e1y
Additional paid-in capital
Accumulal~d inc~mc

Accumulated other cnmprehellsivc loss
Total stockholders' equity
TOlalliabitilies Ilnd stockboldcrs' equity

2

130.872
25,785
(224)

I
10.814
12,422
(203)

156,435

79,071

S 225,442

S 138.818

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Sc-c accompanying notes to consolidated financial statements.

F-3

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ROSETTA STONE INC.
CONSOLIDATED STATEMENTS OF OPERATrONS

(in thousands except per share amount~)

2009

Revenue:
Product
Subscription and service
Total revenue

S 218,549 $ 184,182 $ I J 9,897
33,722
25,198
17,424
209,380
137,321
252:1.71

Cost of revenue:
Cost of product revcnue
Cost of subscription and service revenue
Total cost ofrcvenue
Gross protlt

26,539
2,137
28,676
180,704

19,055
1,632
20,687
116,634

65,437
12,893
29,786

198,312
20,532

93,384
18,387
39,577
1,831
153,179
27,525

108,116
8,518

159
(356)
112
(85)

454
(891)
239
(198)

673
(1,331)
154
(504)

30,264

3,163
33,427
218,844

Operating expenses
Sales and marketing
Research and development
General and administrative
Lease abandonment
Total opernting expenses
Income from operations

114,899
26,239
57,174

Other income and expense:
Interest income
Interest expense
Other income
Total other income (expense)

20,447
7,084
13,363

27,327
13,435
13,892

8,014
5,435
2,579
(80)

$

13,363 S

13,892 $

2,499

$

Income before income taxes
Incomc tax provision
Net income
Preferred stock accrction
Net income attributable to common shareholders
Net income per share attributable to common
stockholders:
Basic
Dilutcd

Year Endffi December 31.
2£108
2007

0.89 $
0.67 S

7.29 $
0.82 $

1.47
0.15

$

Common shares and equivalents outstanding:
Basic weighted average shares
Dilutcd weighted average sharcs

14,990
19,930

1,905
16,924

1,702
16,533

Sec accompanying notes to consolidated financial statements.

F-4

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SPAZIANO

EXHIBIT 6

EXHIBIT FILED

UNDER SEAL

SPAZIANO

EXHIBIT 7

EXHIBIT FILED

UNDER SEAL

SPAZIANO

EXHIBIT 8

EXHIBIT FILED

UNDER SEAL

SPAZIANO

EXHIBIT 9

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
ROSETTA STONE LTD.
Plaintiff,
CIVIL ACTION NO. 1:09cv736
(GBL/TCB)

v.
GOOGLEINC.
Defendant.

DEFENDANT GOOGLE'S SUPPLEMENTAL INITIAL DISCLOSURES
Pursuant to Rule 26 of the Federal Rules of Civil Procedure, Defendant Google Inc.
("Google") makes the following supplemental initial disclosures. Google reserves the right,
pursuant to Federal Rule of Civil Procedure 26(e), to supplement these disclosures.

INTRODUCTORY STATEMENT
The following disclosures are made based on the information reasonably available to
Google as of the date hereof. By making these disclosures, Google does not represent that it is
identifying every document, tangible thing, or witness possibly relevant to this lawsuit. Nor does
Google waive its right to object to production of any document or tangible thing disclosed herein
on the basis of any privilege, the work-product doctrine, relevancy, undue burden, or any other
valid ground for objection. Rather, Google's disclosures represent a good-faith effort to identify
the information required under Rule 26(a)(l).
Persons who are not now officers, directors, or managing agents of Google may have
information relevant to this lawsuit. Google does not purport in these disclosures to make
disclosures on behalf of, or based on the information available to, any such person.
Finally, Google makes these disclosures without in any way waiving:

1

1.

The right to object on the grounds of competency privilege, relevancy,

materiality, hearsay, or any other proper ground, to the use, in whole or in part for any purpose,
of any information disclosed herein in any subsequent proceeding in this action or any other
action;
2.

The right to object on any and all grounds at any time to any other discovery

request or proceeding involving or relating to the subject matter of these disclosures, including
without limitation, objections on the basis of any privilege, the work product doctrine, relevancy,
or undue burden;
3.

The right to object to the production of any document or tangible thing disclosed

in these disclosures on the basis of a privilege or other valid objection; and
4.

The right to object to the production of any document or tangible thing disclosed

in these disclosures on the basis of confidentiality, absent an appropriate protective order.
All of the disclosures set forth below are made subject to the above objections and
qualifications.
1.

Rule 26(a)(l)(A): Witnesses
For many of the subjects listed below, there may be numerous persons who have some

knowledge of discoverable infonnation. Google has identified those persons likely to have
discoverable infonnation that Google may use to support its claims or defenses who Google
presently believes are most knowledgeable about the listed subjects, but Google reserves its right
to supplement these disclosures as discovery progresses. Google employees or fonner
employees, including those identified below, may be contacted only through Google counsel.

2

Name

Subjects

Christina Aguiar

Information relating to Rosetta Stone's advertising account,
including Rosetta Stone's bidding on competitors' trademarks.

Jonathan Alferness

Information regarding the general functionality of the Google
AdWords auction and the Smart Ad Selection System.

David Baker

Information regarding data from Google's AdWords database
relating to the keyword "Rosetta Stone" or variants thereof,
including impressions, click through rates, and money owed to
Google as a result of such clicks; information regarding Google's ad
approval process.

Terri Chen

Information regarding Google's trademark policies.

Edward Chiang

Information regarding the functionality ofthe current AdWords
keyword tool.

Sanjay Datta

Information relating to Google's finances generally, including
revenues and profits generated by AdWords.

Daniel Dulitz

Information relating to the functionality and appearance of
"Sponsored Links," including non-privileged consumer research
relating thereto.

Baris Gultekin

Information regarding the legacy functionality of the AdWords
keyword tool; information regarding the development, functionality
and performance of Google's current automated ad approval system.

Rose Hagan

Information concerning Google's U.S. trademark policies relating to
its AdWords program.

Richard Holden

Information regarding implementation of the AdWords program,
including information regarding the implementation of automated
tools Google provides to advertisers.

Alana Karen

Information concerning the 2004 trademark policy, AdWords
advertisers and advertisements, and the implementation of the
Google AdWords service.

Bill Lloyd

Google's policies concerning AdWords, Google's review, approval,
and disapproval of advertising, including actions Google takes
regarding trademark and counterfeiting complaints about ads,
including ads using Rosetta Stone trademarks.

Cory Louie

Technology and methodologies generally available to combat fraud

3

and abuse, including, but not limited to counterfeiting; Google's
efforts to assist Rosetta Stone in combating fraud and abuse through
Google programs.
Mickey Ryder

Google's processing of Rosetta Stone's DMCA notices directed to
Google, and Google's receipt of unsolicited "spam" emails from
third parties claiming to sell Rosetta Stone software at discounted
prices.

Nitin Sharma

Information related to quantifying search activity using the alleged
Rosetta Stone trademarks; information (including statistics)
regarding the frequency with which Google displays ads on the
search results page.

Asish Vij

Information related to Google programs used by third party website
publishers to record and track user activity on their websites, and
information available to AdWords customers via Google Analytics
and AdWords Report Center.

Susan Wojcicki

Information regarding Google's business development, values and
practices; information regarding Google's trademark policies;
general information regarding the operation of the AdWords
program.

The above individuals may be contacted only through counsel at Quinn Emanuel
Urquhart & Sullivan, 555 Twin Dolphin Drive, 5th Floor, Redwood Shores, California, 94065,
[phone].
In addition, current or former employees and counsel of Rosetta Stone Limited have
information that Google may use to support its defenses, including but not limited to information
relating to preclusion, laches, the statute of limitations, fair use, fIrst sale doctrine, functionality,
innocent infringement, generic terms, lack of secondary meaning, waiver, acquiescence,
estoppel, non-infringement, no causation, no damage, unclean hands, lack of irreparable harm,
adequacy of remedy at law, failure to mitigate, first amendment, duplicative claims, fraud,
abandonment, third-party use, actions of others and no punitive damages. At this time, Google
believes the following Rosetta Stone current or former employees have knowledge and
4

information regarding Google's defenses: Tom Adams, Simon Berriochoa, Jason Calhoun, Eric
Deuhring, Eric Eichmann, April Garvey, Bernard Hamann, Mike Hill, Heather Ingram,
Christopher Klipple, Van Leigh, Julie Longley, Brian Miller, Nino Ninov, Tom Nowacyzk, John
Ramsey, Nicole Tabatabai, Raymond Yau, Michael Wu.
Also, Rosetta Stone Limited has identified five third-party witnesses that Google may use
to support its defenses as listed above. At this time, Google believes the following witnesses
may have information regarding Google's defenses: Deborah Park Jefferies, Denis Doyle, Diana
Stanley Thomas, Steve Floyd Dubow and Rita Porter. Further, Google believes that the
following third-party witnesses may have information regarding Google's defenses: Amazon,
Inc. and eBay Inc. Google reserves the right to object on the grounds of competency, privilege,
relevancy, materiality, hearsay, or any other proper ground, to the testimony of any individuals
disclosed herein.
These disclosures do not include any expert witnesses identified pursuant to Rule 26.
2.

Rule 26(a)(l)(B): Documents
Google identifies the following documents that are in Google's custody, possession, and

control, and that at this time, Google reasonably believes it may use to support its defenses:
1.

Certain documents relating to advertisements that were displayed in response to
searches that included or consisted of the alleged Rosetta Stone trademarks,
including such advertisements and communications; contracts with advertisers
concerning their bids on keywords that included or consisted of the alleged
Rosetta Stone trademarks; and click through rates, revenue, and other data
collected for such advertisements.

2.

Google's trademark and other policies and procedures for its AdWords program.

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3.

Documents sufficient to show how the AdWords program operates.

4.

Certain documents relating to the appearance of Sponsored Links.

5.

Communications with Rosetta Stone or those acting on its behalf, and certain
documents relating thereto.

6.

Relevant financial data.

7.

Documents reflecting Google's programs to combat fraud and abuse, including
but not limited to counterfeiters.

8.

Documents publicly available on Google's website, www.google.com.

Google identifies the following documents that are in Rosetta Stone's custody,
possession, and control, and that at this time, Google reasonably believes it may use to support
its defenses:
1.

Documents and communications regarding Rosetta Stone's brand awareness and
brand equity.

2.

Relevant financial data.

3.

Documents and communications regarding Rosetta Stone resellers and affiliates.

4.

Documents and communications relating to counterfeit complaints.

5.

Documents and communications related to Rosetta Stone's advertising programs.

6.

Documents and communications related to Rosetta Stone's involvement in the
Business Software Alliance (BSA) and similar organizations.

7.

Documents and communications related to Rosetta's Stone's lobbying efforts.

8.

Documents reflecting Rosetta Stone's web analytics reports from all sources,
including but not limited to, Google Analytics, Omniture and Hitwise.

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9.

Documents and communications related to complaints lodged with Google
regarding alleged use of Rosetta Stone trademarks.

10.

Documents and communications related to third party advertisements of Rosetta
Stone's products.

11.

Documents reflecting Rosetta Stone's alleged ownership of the relevant
trademarks.

12.

Documents publicly available on Rosetta Stone's official website,
www.rosettastone.com.

3.

Rule 26(a)(1)(C): Damages
This category of disclosure is not presently applicable to Google.

4.

Rule 26(a)(1)(D): Insurance Agreements
Google is not aware of any insurance agreement under which any person carrying on an

insurance business may be liable to satisfy part or all of a judgment which may be entered in this
action or to indemnify or reimburse for payments made to satisfy the judgment.
DATED: March 18, 2010

QUINN EMANUEL URQUHART &
SULLIVAN, LLP

/s/
Margret M. Caruso, Esquire (Admitted Pro Hac Vice)
QUINN EMANUEL URQUHART & SULLIVAN,
LLP
555 Twin Dolphin Drive, 5th Floor
Redwood Shores, California 94065
[phone]
[phone] (facsimile)
[e-mail]

Counsel for Defendant Google Inc.

7

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 18th day of March, 2010, I will serve this document by
electronic mail on counsel for the Plaintiff:
Warren T. Allen II
Clifford M. Sloan
Jennifer L. Spaziano
Skadden, Arps, Slate, Meagher, & Flom, LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005-2111
[e-mail]
[e-mail]
j [e-mail]
Counselfor PlaintiffRosetta Stone Ltd.

lsi Margret M. Caruso
Margret M. Caruso
Counsel for Defendant Google Inc.

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