Rosetta Stone LTD v. Google Inc.
Filing
227
MEMORANDUM OPINION re Plaintiff's Motion for Partial Summary Judgment as to Liability, Defendant's Motion for Summary Judgment. Signed by District Judge Gerald Bruce Lee on 8/3/10. (klau, )
Rosetta Stone LTD v. Google Inc.
Doc. 227
IN THE
UNITED
STATES
DISTRICT
COURT
FOR
THE
EASTERN
DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION
Rosetta Stone Ltd.,
)
Plaintiff,
)
V.
Google Inc.,
)
)
Case No.
l:09cv736
(GBL/TCB)
Defendant.
)
MEMORANDUM OPINION
THIS MATTER is before the Court on Plaintiff's Motion for
Partial Summary Judgment as
to Liability
(Dkt. {Dkt.
No. No.
103) 112).
and This
Defendant's Motion for Summary Judgment
case concerns
Plaintiff Rosetta Stone Ltd.'s
{"Rosetta Stone")
allegations that Defendant Google Inc.
("Google")
is actively
assisting third party advertisers to mislead consumers and
misappropriate Rosetta Stone's trademarks by using the
trademarks (1) as keyword triggers for paid advertisements and
(2)
within the title and text of paid advertisements on Google's
There are five issues before the Court. The first
website.
issue is whether Google's practice of auctioning Rosetta Stone's
trademarks to third party advertisers for use in their Sponsored
Link titles and advertisement text creates a likelihood of
confusion to warrant granting summary judgment in favor of
Rosetta Stone as to Counts I (trademark/service mark
Dockets.Justia.com
infringement under the Lanham Act),
under Virginia Law), law). second and VI
V
(trademark infringement
(unfair competition under Virginia likelihood of of confusion, the
Notwithstanding issue
a finding of
is whether Google's use keyword triggers under
Rosetta Stone's
trademarks as
its advertising program is
functional and, issue
therefore,
a non-infringing use.
The third
is whether Google
intentionally induces
third party
advertisers
to bid on Rosetta Stone's
trademarks or knowingly
continues
to permit
advertisers
the
selling counterfeit Rosetta
in their Sponsored Link
Stone products
to use
trademarks
titles and advertisement
text,
despite Rosetta Stone's reports
of
infringement,
to warrant granting summary judgment in favor
to Count II (contributory trademark/service
of Rosetta Stone as
mark infringement under the Lanham Act).
whether Google exercises
The
fourth issue
is
joint ownership and control
over third
party advertisers'
Sponsored Link titles and advertisement
text
on its website to warrant granting summary judgment
Rosetta Stone as to Count III (vicarious
in favor of
trademark/service mark
infringement under the Lanham Act).
The final
issue is whether
loss resulting to
for
Rosetta Stone sufficiently demonstrates economic from a decline in its brand name,
which is attributable
Google's practice of auctioning Rosetta Stone's
trademarks
profit to third party advertisers,
to warrant granting summary
judgment in favor of Rosetta Stone as to Count IV
(trademark/service mark dilution under
the
Lanham Act).
The Court grants
Counts I,
summary judgment
in favor of Google on
trier of fact could
V and VI because no
reasonable
find that Google's practice of
auctioning Rosetta Stone's
trademarks as keyword triggers
use of in
to third party advertisers
creates
for
their Sponsored Link titles and text to the source
a likelihood
confusion as
or origin of Rosetta Stone's Rosetta Stone's searching on
goods.
Furthermore,
because Google uses
trademark to identify relevant
information to users
those
one. Count
trademarks,
the use
is a
functional
and non-infringing
The Court grants
summary judgment trier of
in favor of Google on fact could find that
II because no reasonable
Google
intentionally induces
or knowingly continues
to permit to use
advertisers the
selling counterfeit Rosetta Stone products in their Sponsored Link titles summary judgment
trademarks
and advertisement in favor of Google
text.
The Court also grants
on Count
III because no reasonable trier of joint
fact could find that
Google exercises
ownership and control over third party
advertisers'
Sponsored Links
titles and text.
Neither Google's
employees nor its Query Suggestion Tool directs or influences
third party advertisers to bid on Rosetta Stone's trademarks
when they subscribe to Google's advertising program. Finally,
the Court grants
because there
summary judgment in favor of Google on Count IV
fact that
is no genuine dispute of material
Rosetta Stone's brand awareness has only increased since Google changed its terms titles trademark policy to permit triggers and as words text. the use of trademarked
as keyword
within Sponsored Link
and advertisement
I.
BACKGROUND
A.
Plaintiff Rosetta Stone Ltd.
and the Rosetta Stone Marks
Rosetta Stone is a Virginia-based corporation founded in 1992 that provides technology-based language (PL's Mem. Supp. learning products J. 1-2.) As the
and services. foremost
Partial Summ.
language education company in the United States,
language learning products are available in over
Rosetta Stone's
thirty languages and are used by schools,
corporations,
government entities and millions of
individuals in over 150
countries.
rights,
(Adams Decl.
^ 10-11.)
To preserve its trademark
Rosetta Stone obtained federal trademark registration its marks, including: ROSETTA STONE, ROSETTA STONE
for some of
LANGUAGE LEARNING SUCCESS,
ROSETTASTONE.COM,
and ROSETTA WORLD
(the
2-7,
"Rosetta Stone Marks").
Exs. 1-6.)
(Eichmann Decl.
H 2;
May Decl.
^
These Marks have become distinctive and
uniquely associated with Rosetta Stone.
J. 3-4.)
(PL's Mem.
Supp.
Summ.
In order to build the fame,
Marks, Rosetta Stone advertises
reputation,
and goodwill of
its
through a variety of media,
including television,
radio,
newspapers,
magazines,
direct mail,
and telephone directories.
(Eichmann Decl.
1M 3-6,
Exs.
1-3.)
It conducts a substantial amount of
its business over the including those offered in the development of
Internet using many web-based services, by Google, and makes a sizeable
investment
its online business.
(Eichmann Decl.
U 6,
Exs.
1-3.)
Along
with promoting its products and services via its own website
(www.rosettastone.com), of third parties. Rosetta Stone advertises resellers on the websites
It authorizes
such as Amazon.com,
Barnes
& Noble,
and Borders,
Ex.
to sell authentic Rosetta Stone
72 at 147:9-148:18, Ex. 58 at with
Stone
products.
(Caruso Decl.
96:12-98:10.)
Specifically,
that
it entered into agreements
them to use the Rosetta
Amazon.com and eBay
allow
Marks
44.)
in connection with advertising.
(Caruso Decl.
Exs.
40-
B.
Defendant Google
Inc.
and Google's
Search Engine
Located in Mountain View, company that owns and operates
California,
Google
is an Internet
one of the world's most utilized
internet
search engines,
www.google.com.
(Spaziano Decl.
Ex.
1
(Ans.
1 3).)
The Internet is a global network of millions of
and the World Wide Web is an
interconnected computers
application running on the Internet
that allows
for the display
of text,
images,
and sound.
(First Am.
Compl.
fl
13.)
Much of
the
information on the that
World Wide Web is
stored in the
form of
web pages
can be assessed through a computer connected to
the
Internet
(available "ISPs")
such as
through commercial
Internet service
providers or
a "browser,"
and viewed using a computer program called
Microsoft Internet Explorer. A web page is
identified by its
own unique Uniform Resource Locator
("URL")
or
"web address"
{e.g.,
http;//www.rosettastone.com),
the website's "domain name"
which
ordinarily includes
(e.g.,
www.rosettastone.com).
Web users or piece of searching
(First Am.
Compl.
fl 13.)
service
for a specific company product, but who do not it may be
information,
know the exact domain found, may use Google's
name or website address where
search engine to locate it.
engine
(First Am.
Compl.
H 25.)
A search
is a computer program that allows web users
to search the
World Wide Web for websites
containing particular content.
(First Am.
Compl.
fl 3.)
A search engine checks the terms
its databases and applies a formula or
entered into it against
algorithm to produce a search results page that lists the websites that may relate to the user's search terms and their
corresponding links.
search engine,
the "enter" key
(First Am.
Compl.
t 25.)
To use Google's
and hit
a web user need only type
(or click the
in a few words
button)
"Google Search"
to receive
a list of hyperlinks identifies as
("links") to the
to web pages
that Google (First Am.
relevant
search requested.
Compl.
1 4.)
The search results generated by Google's search
"natural" or "organic" to system that the search
engine are determined by a lists results in order of
objective relevance
terms
input into the search engine,
top of
with the most relevant
the web page. (First Am.
websites appearing near the
Compl.
H 26.)
is available not only on its own
Google's search engine
website but also through other popular websites Online, Netscape, EarthLink, CompuServe,
such as America AT&T
Shopping.com,
WorldNet,
Google of
and Ask.com.
(First Am.
to affix a
Compl.
f 34.)
In addition,
at the top
invites consumers
"Google Toolbar"
their Internet browsers
searches
that allows
these users to conduct
currently visiting
Google
even when they are not
www.google.com.
(First Am.
Compl.
t 34.)
As such,
Google's
and over
content network reaches
70% of U.S. Internet
80% of
global
internet users,
searches use Google's
search engine.
(First Am.
Compl.
11 35.)
the "enter" key, Google not only
When a web user hits
provides web users with organic search results,
it also displays
paid advertisements above or alongside the organic search
results.
76 at
(Caruso Decl.
Ex.
Ex.
64
59 at 202:1-9
at
& 205:20-206:25,
These paid
Ex.
175:22-177:16,
112:16-113:1.)
advertisements consist of a combination of content and a link to
the advertiser's website such that if a user clicks on the link,
she will open the advertiser's website,
which offers
additional
information about the advertiser and may provide the user with
an option to purchase the advertiser's goods Google and services. To of
offer such content-based links,
relies on at
least one
its advertising programs
called the AdWords
Select Advertising
Program
("AdWords Program").
(First Am.
Compl.
U 36.)
C.
Google's AdWords
Program
Google's AdWords
program that displays engine in the form of
Program"
is
an auction-style advertising
to users of Google's search 1
advertisements
Sponsored Links.
(Spaziano Decl.
Ex.
(Ans.
Uf 5 &= 36).)
The Sponsored Links are displayed above or
search results. (Spaziano Decl.
to the right of
the organic
Ex.
1
(Ans.
1 28).)
Those above the organic search results
those to the right
share
a yellow rectangular background while
of
the organic
search results are Exs. 10 & 13.) size
separated by a blue
line.
(Caruso Decl. color,
These Sponsored Links similar to the
appear in a
typeface,
and font
search results
Exs. 10 & 13;
generated from a web user's
query.
(Caruso Decl.
First Am.
Compl.
^ 3 8.)
Program, Google offers an advertiser the
Under the AdWords
ability to select certain words or phrases
("keywords")
that,
combined with the advertisement's quality and the maximum bid price for the advertisement, will trigger a Sponsored Link to
the
advertiser's
chosen website.
(Caruso Decl.
Ex.
52
at
18:17-
20:19,
65:13-66:8,
&
100:16-101:1.)
Advertisers
select
the
keywords
from a list of
words or phrases generated keyword tools, of which there and (3) a are
algorithmically using Google's three: (1) Keyword Tool; (2)
Query Suggestion Tool;
trademark-specific version of (Caruso Decl. Ex. 54 at
the Query Suggestion Tool. 18:11-17, & 21:25-22:11.)
13:18-14:4,
Before the list
is displayed to advertisers, terms
however,
it is
passed through a filter which removes into the filter as trademarked terms
(Caruso Decl.
that Google entered
for which Google has
Ex. 54 at 19:8-24, 23:22-
received a complaint.
24:7,
& 25:2-7.)
Alternatively,
advertisers can also select
the
keywords on their own without relying on the list generated by
Google's keyword tools. (Lloyd Decl. Ex. 9 & 11.) If the
advertisement's quality and bid price are sufficiently high, qualifies to be shown on Google.com
17:12-21:18, 65:13-66:8, &
it
(Caruso Decl.
Ex.
52 at
Ex. 1
100:16-101:1;
Spaziano Decl.
(Ans.
HH 29 & 39),
For example,
Ex.
2 at GOOG-RS-0306288,
Ex.
3 at 9.)
a
using the AdWords Program,
children's shoes,
Company B,
company that sells
can cause Google
to display
its Sponsored Link whenever a Google user conducts a search using the term, "children's shoes." Company B can also cause
its Sponsored Link to appear whenever the user searches for the
term "Company A," Company B's competitor, who also sells
children's
shoes.
Consequently,
shoes
whenever a Google user wishing
a search of the
to buy children's
from Company A conducts
term A
the
(Company A's
trademark),
a Sponsored Link would appear on
to view children's If the user
search results page, from Company B,
inviting the user
shoes
Company A's
competitor.
clicked on Company B's
the
link,
Company B's website would open on
to purchase children's
screen and the user might be able
shoes
from Company B.
advertisers
Thus,
are able
by participating in the AdWords
to place their advertising in
Program,
front of
consumers who
identify themselves as
interested in
certain products
or services
offered by the advertisers'
companies.
(First Am.
Compl.
H 27.)
D.
Google's Trademark
Policy
Google's policy of allowing third party advertisers to
purchase specific trademarks as keyword triggers (Lloyd Decl. Ex. for the 1; First Am.
Sponsored Links began in 2004.
Compl.
f 44.)
In its Form S-l Registration Statement to the
dated April 29, 2004, Google
Securities Exchange Commission,
informed its investors
of the following:
we
In order to provide users with more useful ads,
U.S. and in Canada. Under our new policy, we no
have recently revised our trademark policy in the
longer disable ads due advertisers of
the ads.
to selection by our as keyword triggers for
trademarks
(Spaziano Decl.
Ex.
7).
The S-l
Form further states:
10
As a result of subject . . . . to more
this
change
in policy, infringement
we may be lawsuits
trademark
Adverse results
in a
in these
loss of
lawsuits may
result in,
or even compel,
a change
in this practice
for us,
which could result
revenue
which could harm our business.
(Spaziano Decl.
In 2009,
Decl. Ex. 1.)
Ex.
7).
trademark policy.
Program now makes
Google again revised its
Specifically,
{Lloyd
two
the AdWords (1)
distinct uses of
a given keyword:
as a trigger to the
Sponsored Link advertisement advertisement
allows,
and
(2)
as part of Ex. 1-2.)
the The new policy
authorized in the
itself.
(Lloyd Decl.
in addition to advertisers
the brand owner and its to include the trademark
licensees,
advertisement's
bearing the
text
if
they
(2)
(1)
resell
legitimate products
replacement parts,
trademark;
sell
components,
or compatible products provide non-competitive corresponding to the
Caruso Decl. Ex. 55
corresponding to the information about
trademark;
or
(3)
the goods
or services Exs. 2, 4;
trademark term.
at 154:6-15.)
(Lloyd Decl.
To enforce
team, known as
its
trademark policy,
Google
employs a trademark
to
the Trust
and Safety Team,
which responds
complaints about advertisements
of its AdWords Program.
that violate certain conditions
Ex. 67 at 7:24-8:19;
(Caruso Decl.
Lloyd Decl.
HH 9-11.)
As a general practice,
problems with
the Trust and
Safety Team works
to address
fraud and
11
counterfeiting.
(Caruso Decl.
Ex.
68
at
50:4-51:10,
Ex.
53
at
34:21-37:11,
The
Ex.
67 at 108:2-109:16;
to notices and of
Louie Decl.
HH 1-5.)
on
Team responds
counterfeit advertisements
Google's website
takes down any advertisements
confirmed to
violate Ex. 65
its AdWords at
Program.
(Caruso Decl.
Exs.
21,
23-25,
28,
135:11-138:25.)
For example,
when Rosetta Stone's
a
Enforcement Manager,
Jason Calhoun,
informs Google that
particular advertiser is
products, the Google
selling counterfeit Rosetta Stone
including removing 23-25, 28, Ex.
its
responds by taking action, (Caruso Decl.
Exs.
advertisement.
Exs.
B-C.)
21,
65
at
135:11-138:25;
Calhoun Decl.
But
despite
efforts,
some advertisers
have used loopholes
in Google's
programming to create Sponsored Links
Google's users products to websites that
that deceive and misdirect
sell counterfeit Rosetta Stone
or suggest
to consumers a connection to Rosetta Stone
that does not exist.
(First Am.
Compl.
H
58.)
E.
Procedural History
Based on Google's
current
trademark policy,
Rosetta Stone
brings this action alleging that Google, Program,
through its AdWords
is helping third parties to mislead consumers and
misappropriate the Rosetta Stone Marks by using them as keyword
triggers for Sponsored Links and using them within the text or title of the Sponsored Links. (First Am. Compl. 1M 70-124.)
12
Rosetta Stone alleges
that by giving third party advertisers
under the AdWords Marks or words,
keyword triggers
Program the right to use or terms
the Rosetta Stone those Marks as
to be displayed,
phrases,
that
similar to
cause
Sponsored Links
Google
is helping these advertisers misdirect web users companies that (i)
to (ii)
websites of sell
compete with Rosetta Stone, from Rosetta Stone's
language education programs
competitors,
(iv)
(iii)
sell counterfeit Rosetta Stone products,
language education.
or
are entirely unrelated to
(First Am.
Comp.
H 5.)
to
According to Rosetta Stone,
trademark infringement and
Google's conduct
amounts
is driven by an economic
incentive to increase the number of Sponsored Links that appear for every term entered into its search engine because Google is "cost-per-click" basis.
paid by its AdWords advertisers on a
(Spaziano Decl.
Ex.
1
(Ans.
HI 37
& 63).)
Rosetta Stone alleges seven
In its First Amended Complaint,
Counts for relief:
the Lanham Act); II
I
(trademark/service mark infringement under
(contributory trademark/service mark
infringement under the Lanham Act);
III
(vicarious
trademark/service mark infringement under the Lanham Act); (trademark/service mark dilution under the Lanham Act); V
(trademark infringement under Virginia Law);
competition under Virginia law); and VII
IV
VI
(unfair
enrichment
(unjust
under Virginia Law).
The parties now move for summary judgment
13
on all
counts.
Because Google
filed a Motion to Dismiss Count
VII of Rosetta Stone's Amended Complaint1
filings its Motion for Summary Judgment,
only Counts I-VI.
(Dkt. No.
94.)
before
this Memorandum Opinion
addresses
II.
STANDARD
OF
REVIEW
Under Federal Rule of
Civil
Procedure
56,
the Court must
grant summary judgment if
there is no genuine
the moving party demonstrates
to any material fact,
that
the R.
issue as
and that law.
moving party is entitled to
judgment as a matter of
Fed.
Civ.
P.
56 (c).
In reviewing a motion for summary judgment, facts in a light most favorable to the nonInc., 477 U.S.
the
Court views the moving party. 255 (1986).
Anderson v.
Liberty Lobby,
242,
Once a motion for summary judgment
is properly made
and supported,
the opposing party has the burden of showing that
a genuine dispute exists.
Radio Corp., 475 U.S. 574,
Matsushita Elec.
587 (1986).
Indus.
Co.
v.
Zenith
tt[T]he mere existence of
some alleged factual dispute between the parties will not defeat
an otherwise properly supported motion for summary judgment;
the
requirement is that there be no genuine issue of material fact."
Anderson, 477 U.S. at 247-48 is a (emphasis added). fact that might affect the outcome
A "material
fact"
of a party's case.
Id.
at
248;
JKC Holding Co.
v.
Wash.
Sports
1
The Court addresses Google's Motion to Dismiss Count VII in a separate
Memorandum Order.
14
Ventures, fact
Inc.,
264
F.3d 459,
465
(4th Cir.
2001).
Whether a
is considered to be
law, and
"material"
is determined by the
facts that might law will Anderson, 265 (4th All
substantive affect
"[o]nly disputes over the suit under
the outcome of the
the governing
properly preclude U.S. at 248;
entry of v.
summary judgment." 249 F.3d 259,
Hooven-Lewis
Caldera,
Cir.
2001).
A "genuine"
issue is
concerning a
"material"
fact
arises when the evidence
sufficient
to allow a reasonable
jury to return a verdict
Anderson, ill U.S. at
in the nonmoving party's
Rule 56(e) requires
favor.
248.
the nonmoving
party to go beyond the pleadings and by its own affidavits,
or
by the depositions,
on file,
answers
to interrogatories,
facts showing that
and admissions
there is a
designate specific
genuine issue for trial.
317, 324 (1986).
Celotex Corp.
v.
Catrett,
477 U.S.
Ill.
ANALYSIS
A.
Direct Trademark Infringement Under the Lanham Act2
The first and most contentious issue between the parties is
whether Google is liable for direct trademark infringement based
on its practice of auctioning the Rosetta Stone Marks to third
party advertisers for use in their Sponsored Link titles and
2
The Court addresses Counts I, V and VI together because the test for
trademark infringement under the Lanham Act is essentially the same as that for common law trademark infringement and unfair competition under Virginia
law.
15
advertisement
text.
On
this
issue,
the
Court
grants
summary
judgment
in favor of Google because no reasonable
trier of fact
could find that Google's practice of trademarks as keyword triggers
auctioning Rosetta Stone's
to third party advertisers
creates a likelihood of confusion as to the source or origin of
Rosetta Stone's products.
provides,
Section 32(1)
of
the
Lanham Act
in pertinent part: shall, without the consent of the
Any person who
registrant counterfeit,
(a)
use
in commerce any reproduction,
imitation of a
. . .
copy,
or colorable
registered mark
in connection with the is
advertising of confusion,
any goods or services on or in
likely to cause
connection with which such use
or to cause mistake,
or to deceive; . . .
or
(b)
reproduce,
counterfeit,
copy or colorably
imitate a registered mark and apply such the . . . advertising of goods or to cause mistake,
to be used in commerce upon or in connection with or services on or in is likely to cause shall or to deceive, connection with which such use confusion,
be liable in a civil action by the registrant
15 U.S.C. § 1114(1) (2005).
....
A cause of action for trademark
infringement under the Lanham Act requires the plaintiff
to
prove that (3)
(1)
it possesses a mark;
(2)
defendant used the mark; (4)
offering
defendant's use of
the mark occurred in commerce;
sale,
defendant used the mark in connection with the
for sale,
(5)
distribution,
or advertising of goods or services;
and
defendant used the mark in a manner likely to confuse
to the source or origin of goods or services.
consumers as
People for the Ethical
Treatment of Animals v.
Doughney,
263
16
F.3d 359,
364
{4th Cir.
2001).
Whether consumer confusion is
factors: (1) the strength or two marks the marks to
likely depends on the distinctiveness of consumers; identify; (3) (4)
following nine (2)
the mark;
similarity of
similarity of
the goods and services facilities
similarity between the
(5) similarity of
used by the
markholders;
advertising used by the
markholders;
(6)
defendant's
intent;
(7)
actual confusion;
(8)
quality of
the defendant's product;
George & Co., 393 (4th Cir.
(9)
sophistication of
v.
the
consuming public. Ltd., 575 F.3d 383,
L.L.C. 2009).
Imagination Entm't Not all Id. factors,
however,
Busch, 1992)) .
are relevant or weighed equally.
v. L & L Wings, Inc., 962
{citing Anheuser320 {4th Cir.
Inc.
F.2d 316,
Here,
the parties do not dispute
the
first
four trademark
infringement elements.
20; Def.'s Mem. Supp.
(PL's Mem.
Summ. J.
Supp.
The
Partial Summ.
inquiry,
J.
15-
8-23.)
therefore,
is whether Google's practice of auctioning the Rosetta Stone
Marks as keyword triggers for Sponsored Links and allowing their use within the Sponsored Links' text or title is likely to
create confusion among consumers as to the source or origin of Rosetta Stone's goods or services. Specifically, only three of
the nine confusion factors are in dispute:
(1)
defendant's
intent;
(2)
actual confusion;
(PL's Mem.
and
Supp.
(3)
the consuming public's
J. 17-26;
sophistication.
Partial Summ.
17
Def.'s Mem. factors
1.
Supp.
Summ.
J.
15-20.)
The
Court addresses
these
in turn.
Intent
No genuine dispute of material cause a reasonable juror to
potential purchasers of
fact exists which would intended to confuse
find that Google
Rosetta Stone's as
products by auctioning or allowing their
the Rosetta Stone Marks
keyword triggers
use within the is no evidence
Sponsored Link titles and text.
Moreover,
there
that Google is attempting to pass off "[T]he relevant
to profit
its goods in
but an
or services as Rosetta Stone's.
trademark cases
intent
. . .
is not merely an intent
'intent to confuse v. L & L Wings,
the buying public' 962 F.2d 316,
"
Anheuser-Busch, (4th Cir. 1992)
Inc.
Inc.,
321
{quoting Pizzeria Uno Corp. Cir. 1984)). Intent
v.
Temple,
747
F.2d 1522,
1535
(4th
is generally shown by the defendant's
and pass them off as those of
efforts
to create knock-offs
other's.
See Pizzeria Uno,
747 F.2d at 1535
("[0]ne
intending
to profit from another's reputation generally attempts
to make
his signs,
advertisements,
etc.,
to resemble the other's so as
Best & Co.
335
deliberately to induce confusion.");
F.2d 374, 377 (2d Cir. 1948), cert,
v.
Miller,
818
167
denied,
U.S.
(1948)
(wIf the defendant selects a trademark or trade name similar to
the plaintiff's with intent
the plaintiff, proof of his
to palm off his wares as
intent may be
those of
. .
strong evidence of
18
.
the likelihood of confusion.").
In simplified terms, Google's popular search engine
aggregates
information and provides advertising space.
This
is
akin to a newspaper or magazine
selling advertising space.
To attract advertisers,
advertisements
Google created a system for displaying
for its
that would be economically profitable
company and paid advertisers.
It does not,
however,
sell
Google-made products on its website.
Web users do not visit
Google's website to buy Google products because Google does not
sell products. Any argument that Google is trying to palm off
its goods as those of Rosetta Stone's is,
To prove that Google
therefore,
unfounded.
on the
unlawfully intended to trade
Rosetta Stone Marks,
Rosetta Stone points
to Google's knowledge
that use of trademarked keywords
can generate more revenue. 0309882 & Ex. 19; PL's Mem.
in the text of Sponsored Links
Ex. 23.) 18 at GOOG-RSRosetta Stone
(Spaziano Decl. Supp. Summ. J.
insists Google revised its trademark policy in 2009 knowing that
the change would result in higher click-through rates.
(Spaziano Decl.
Ex.
17.)
However,
as the Fourth Circuit
reasoned in Anheuser-Busch, insufficient evidence of
evidence of financial gain alone is 962 F.2d at 322. There, the
intent.
court reversed the district
court's grant of plaintiff beer
manufacturer's motion for judgment notwithstanding the verdict that defendant T-shirt distributor committed trademark
19
infringement.
Id.
While
recognizing that
the defendant's
primary motive profit, same
the
in creating the T-shirt design was
to make a is not the that
the
court explained that an intent to confuse.
of the . . .
to profit
thing as an intent
commercial success
Id.
("We cannot assume
resulted from
T-shirt
consumer confusion;
consumers may have been moved to buy the T-
shirt by the simple
fact
that they were
amused by the cleverness
of its design.)
more money under
Likewise,
evidence that Google stands to make
trademark policy,
burden of proving to confuse
its current
absent more,
that Google used the buying
cannot meet Rosetta Stone's the
Rosetta Stone Marks with intent
public. An alleged infringer may intend to benefit trademark without ever intending
Id. Google's intent to increase
from the
to cause
consumer confusion.
not
its earnings does
necessarily demonstrate an intent
to mislead or confuse
potential buyers of Rosetta Stone's products.
Google's own business interest,
In fact,
not
it is in
to
as a search engine,
confuse its users by preventing counterfeiters advantage of its service.
from taking
Google's success depends on its users
finding relevant responses to their inquiries.
Ex. 76 at 175:22-177:16; Def.'s Mem. Opp'n Summ.
(Caruso Decl.
J. 19.) It
does not make money from advertisements of counterfeit Rosetta
Stone products because counterfeiters generally use stolen
20
credit
cards
to secure
the
advertising,
and battling
such
counterfeiters is a drain on Google's resources.
9; Louie Decl. flU 3-6.)
(Lloyd Decl.
H
Even if it is true that Google stands
its
if
to profit
financially from higher click-through rates,
loss would far exceed its immediate
long
it
term financial
gains
provided search services without counterfeiting operations.
regard to possible intentionally confuses its
If Google
users and deprives them of a positive experience,
website will decrease, causing it to lose revenue.
traffic at
its
Moreover,
part, because
Google argues
it developed a
it revised its
technological
trademark policy,
tool by which the
in
websites
linking to advertisements on www.google.com could be the website's status as a
automatically checked to assess reseller or informational
site before an advertisement
containing a monitored trademark term would be displayed
(Caruso Decl.
Ex. 5). This
Ex.
62 at
80:18-81:5
& 88:16-90:22;
Lloyd Decl.
technological
feasibility minimized the work of
Google's
advertising and support
focus
team,
thereby leaving more
advertisements.
time
for them to
on securing additional
Consequently,
it
cannot be
shown that Google's
intent
in
providing third party advertisers with the opportunity to bid on
the Rosetta Stone Marks as keyword triggers violates
Act or related statutes.
the Lanham
21
2.
Actual
Confusion that is consumer actual the most confusion as to the
The parties agree source or origin of
goods
important
factor and the
best evidence of
Summ. J. 20;
likelihood of
confusion.
J.
(PL's Mem.
Supp.
Def.'s Mem.
Opp'n Summ.
18.)
In this vein, that Google's
Rosetta Stone relies
on two cases
for its position
trademark policy generally results (PL's Mem. J. 459 10.) Supp. Summ. J. 20-21; v.
in a
likelihood of
confusion. Summ.
PL's Reply Mem. Corp., 81
Supp.
In Sara Lee Corp. 1996),
Kayser-Roth
F.3d 455,
(4th Cir.
a manufacturer of hosiery bearing the
suit against a competitor which The plaintiff
"L'eggs"
trademark brought "Leg Looks"
marketed a
brand of hosiery.
presented six instances of actual confusion by women who bought
Leg Looks® under the impression that it was a Leggs® product.
Id. at 466. The record included consumer market surveys
indicating that about 30-40% of consumers throughout
were confused as to the source of the product, by the
the nation
similarity
of the L'eggs® and Leg Looks® marks.
infringement,
on the
Jd.
at 4 67.
In finding
the court determined the confusion element based
surveys which showed a 30-40% consumer confusion
Id.
frequency.
Decided well before Google went public Google's
in 1998 and before Sara Lee is
search engine gained widespread popularity, consequence
important for the legal
following a detailed set of
22
facts which is vastly different with in this in at
direct
from what
the Court
is
faced
case.
At
first blush, First,
Sara Lee is distinguishable
least two ways.
competitors
Rosetta Stone and Google are not
in the
language-learning software market.
Second,
the record here is devoid of consumer confusion evidence
Rather, five Rosetta Stone's evidence of actual
amounting to 30-40%.
confusion--testimonies of 100,000
Co.
individuals out of more than de minimis.
F.3d at 398
impressions over six years--is
v. Imagination Entm't, 575
See George &
(affirming
L.L.C.
summary judgment of
no infringement where plaintiff came forward
of confusion among 500,000). more than Since
with only four instances Google revised its
trademark policy in 2004,
100,000,000
Google's
advertisement
impressions have been triggered on
through the keyword use of the
search results page
Rosetta Stone Marks.
(Def.'s Mot.
Supp.
Summ.
J.
7.)
Rosetta
Stone only points
testimonies of
to Google's own internal studies and the
individuals who claim to be confused by a
five
Sponsored Link displayed on a Google
they each conducted a search for the
search results page when
term "Rosetta Stone."
However,
Rosetta Stone's evidence of statements made by Google
2004 trademark policy and internal
employees about Google's
experiments concerned consumer impressions of advertisements that made use of third party trademarks which did not
(Spaziano Decl. Ex. 8-12 & 16;
include a
Rosetta Stone Mark.
Spaziano
23
Decl. the
Tab A at Hagan Dep.
93:18-94:5,
Sept.
30,
2004.)
None
of
five
individuals who claim to be
confused referenced an used the
advertisement
that conformed to Google's policies--i.e.,
Rosetta Stone Marks
in connection with advertising genuine
goods.
Ex. 71
(Caruso Decl.
at 13:3-18:14,
Ex.
Ex.
56
74
at
at
13:4-16:15,
11:4-22 &
Ex.
57 at 13:9-24:6,
Spaziano
71:22-73:21;
Decl. 94:5,
Exs. Sept.
8-12 30,
Ec 16; 2004,
Spaziano Decl. Jeffries Dep. 70:8-73:21;
Tab A at Hagan Dep. 75:5-79:21, PL's Mem.
93:18-
Porter Dep. Supp. Summ. J.
49:16-55:3,
20-21.)
Thomas Dep.
X-IT Products,
Inc., 155 F. Supp.
L.L.C.
2d 577
v.
Walter Kidde Portable Equipment,
Va. 2001) is equally
(E.D.
distinguishable.
complaint against
There,
the plaintiff
filed an eight-count
the defendant for allegedly infringing on the
plaintiff's packaging,
sell-sheets,
and Power-Point presentation
of its residential escape ladder.
Id.
at 597.
Denying summary
judgment for both parties on the Lanham Act claim,
the court
looked to two actual instances of confusion and a survey
conducted by the plaintiff's marketing expert showing a 40% confusion rate. Id. at 624. The court noted a complete absence
in the defendant's record of any direct rebuttal evidence.
Unlike the X-IT defendant,
Id.
Google provides rebuttal evidence in
the form of declarations of various employees familiar with
Google's search engine and advertising programs. (Caruso Decl.;
24
Lloyd Decl.;
As
Louie Decl.)
five witnesses who allegedly purchased Stone products after conducting a search on shows that all five testified to
to the
counterfeit Rosetta Google, rebuttal
evidence
knowing that
they were not purchasing the products (Caruso Decl.
Ex. 71 at
directly from Ex. 57 at
Rosetta Stone.
13:9-24:6 &
Ex.
56 at
13:4-16:15,
Ex. 74 at
101:1-8,
13:3-18:14,
11:14-22,
71:22-73:21,
11:15-14:6,
& 74:12-75:12;
15:4-16:15, &
Spaziano Decl.
Tab A at Doyle Dep.
15:2-19:20, 23:19-
24:6-11,
Dubow Dep.
24:20,
32:20-33:7,
&
38:18-43:10,
Jeffries Dep.
Porter Dep.
13:5-14:17,
21:11-22:12,
20:2-21:2,
22:12-23:2,
& 24:18-26:2,
Thomas Dep.
20:4-28:5
& 75:7-12.)
Thus,
none of the Rosetta
Stone witnesses were confused about the source of their purchase but only as to whether what they purchased was genuine or counterfeit. They were not confused by the Sponsored Links, but
by the confusing nature of the websites from which they purchased.
24:20, Ex.
(Caruso Decl.
71 at
Ex.
56 at 13:4-17:16,
Ex. 74 at
Ex.
57 at 23:2In
13:3-19:22,
71:18-73:21.)
particular,
two of the witnesses could not discern between the
links offering genuine Rosetta Stone products and counterfeit ones. (Caruso Decl. Ex 57 at 117:10-21, Ex. 74 at 16:4-17:5;
Thomas Dep. 32:9-
Spaziano Decl. 43:19.)
Tab A at Dubow Dep.
117:10-21,
Additionally,
one of the witnesses purchased the
search and another
counterfeit software through an organic
25
disposed of
its
the software,
thereby preventing an investigation of
Ex 74 at 15:2-18:3, 70:8-13, &
authenticity
(Caruso Decl.
72:16-20; Dep.
Spaziano Decl.
Tab A at
Dubow Dep.
79:11-81:11,
Thomas
47:12-18).
Rosetta Stone's evidence of numerous
by the record.
contention that
it has presented anecdotal
examples of actual confusion is undermined
complaints to Rosetta Stone's
Evidence of
customer care center from individuals who purchased counterfeit
software between December 9, 2009 through March 8, 2010 rest on
the declarations
and interrogatory responses of
Rosetta Stone's
employees.
PL's Mem. documents
(Calhoun Decl.
Opp'n Summ. referenced J.
U 9;
11.)
Spaziano Opp'n Decl.
However, a review of
Ex.
the
38;
in Mr.
Calhoun's declaration shows
that
the
record of
complaints
identify sources
such as Craigslist and
spam emails,
not Google,
as
the means by which the allegedly
counterfeit products were located.
Similarly, the testimony of Google
(Le Decl.
lawyers
UU 3-4.)
concerning screen
shots presented at responses
product
their deposition is
inadequate when their the source of a
Ex. 25 at
reflect a mere uncertainty about
than actual & confusion. Ex. 30 at
rather
(Lien Decl.
189:23-190:19
194:1-195:15,
159:21-163:11.)
Finally,
Dr.
Kent Van Liere's
survey provides unreliable
evidence of actual confusion because the result contained a
measure of whether respondents thought Google "endorsed" a
26
Sponsored Link,
a non-issue.
Dr.
Van Liere's
opinion relied on
responses
to the question of whether a given
to offer Rosetta Stone products
link perceived by
for sale was
respondents
"endorse[d]" confusion as Decl. Ex.
by Rosetta Stone, to the
which is not
the
same as (Caruso
source or origin of
the products. Accordingly,
45-C at Questionnaire 3-4.) confusion,
on the point
of actual
favor.
the Court necessarily finds
in Google's
3.
Consuming Public's Sophistication Contrary to Rosetta Stone's contention, the relevant market
here is not the public its products,
the Court's market is
at-large,
but only potential buyers of therefore,
consumer
whose sophistication,
If
is a factor in
in the relevant
analysis.
the typical
sophisticated in the use of or possesses an expertise
regarding a particular product, may be pertinent
his sophistication or expertise likelihood of confusion.
in determining the
Perini Corp. Cir. 1990)
v.
Perini
Constr.,
Inc.,
915 F.2d 121,
127-28
(4th
(reversing the district court's
finding of summary
judgment for defendant because the court failed to consider
consumer sophistication). Such sophistication may be shown by
Star Indus., Inc. v.
evidence of expert opinions or surveys.
Bacardi
also
& Co.,
412
F.3d 373,
390
(2d Cir.
2005).
A court may
"reach a conclusion about consumer sophistication based
27
solely on the nature ("Unhurried consumers store,
of
the product or
its price." of
Id. the liquor
in the about
relaxed environment $12 to $24
making decisions
purchases,
may be
expected to exhibit
sufficient
sophistication to distinguish which are differently
between Star's and Barcardi's products, labeled.")
As the
(citation omitted).
record reflects, Rosetta Stone's products cost
approximately $259 three-level bundle. target market
for a single-level package and $579 (Caruso Decl. Ex. 53 at
for a Its
115:20-116:5.)
is comprised of well-educated consumers willing to
invest money and energy in the time-intensive task of learning a
language. (Caruso Decl. Exs. 31 & 34, Ex. 69 at 86:20-88:1.) large but only
a
Consequently,
it cannot encompass
in a
the public at
web users who would type Rosetta Stone Mark,
search query consisting of
and who must necessarily have unaided recall
of
the Marks.
(Caruso Decl.
Ex.
33;
Def.'s Opp'n 20.)
These
same consumers who are willing to spend hundreds of dollars on
language-learning software would reasonably take care in making such a decision.
language,
Given the
time commitment of
learning a
they are more
likely to spend time
searching and
learning about Rosetta Stone's products.
95:13-97:11.) demonstrate
(Lien Decl.
Ex.
36 at
Their expertise and sophistication would tend to they are able to distinguish between the
that
Sponsored Links and organic
results displayed on Google's
search
28
results page.
Therefore,
this
factor strongly favors Google.
Balancing all of
factors,
the
disputed likelihood of
that Google's use trademark of
confusion
the Rosetta
the Court concludes does not
I, V
Stone Marks
under Counts
amount
to direct
infringement
and VI.
B.
Functionality Doctrine Notwithstanding a favorable finding for Google under the
relevant
infringement elements,
the
functionality doctrine
as keyword
protects Google's use of
the Rosetta Stone Marks
triggers.
feature is of
The functionality doctrine provides
functional wif it is essential
that a product
or purpose the 532
to the use
the article or if
it affects Inc.
the cost or quality of v. Mktg. Displays,
article." U.S. 23, 32
Traffix Devices,
Inc.,
(2001)(citation and internal quotation omitted)
(finding that whether the product configuration is a competitive necessity is an incomplete test for functionality, feature
its
as a court to
must also consider whether the product
the use or purpose of
is essential
cost or
the device or affects
quality).
The doctrine
"prevents
trademark law,
which seeks
from
to
promote competition by protecting a firm's reputation,
instead inhibiting legitimate competition by allowing a producer to control a useful product
Prods. Co., 514 U.S. 159,
feature."
(1995).
Qualitex Co.
v.
Jacobson
164
29
Although
Traffix and Qualitex are
cases
where
the in
functional element of
the mark holder's product
was present
both parties'
products,
the principal theory is
the same-
allowing competitors a monopoly on functional uses would inhibit
legitimate competition. courts Id. Applying this principle role as to a
search engine,
have
recognized its
a valuable
information provider. F.3d 796, 803-04
See Playboy Enters., 2002)
Inc.
v.
Welles,
279
(9th Cir.
{''Searchers would have if
a much
more difficult
time
locating relevant websites
they could do
so only by correctly guessing the
long phrases necessary to
substitute
for trademarks.");
Inc., 560 F.
see also Designer Skin,
Supp. 2d 811, 819 n. 7
L.L.C.
Ariz.
v.
S & L Vitamins,
(D.
2008)
still, as it
(citation omitted)
and a pity, if the
("[I]t would seem more remarkable
law, in its over-exuberant giddiness in cyberspace,
thrashes about with mark-type conflicts
should kill
engines].") Here,
[readily available Internet directories and search
Google uses
trademarked keywords,
including
the
Rosetta Stone Marks, use is no different
to identify relevant Sponsored Links. than the use of a Google search query to
This
trigger organic search results
In both cases, a
relevant to the user's search.
"Rosetta Stone" will return a
search term like
string of Sponsored Links and organic
results page. The keywords,
links on Google's search
have an essential
therefore,
30
indexing
function because relevant
they enable Google
to readily identify to a web
Inc., 977 F.2d
in its databases
user's query.
information in response
Ltd. v. Accolade,
See Sega Enters.
1510,
1531
(9th Cir.
1992)
(finding that use of to achieve
the plaintiff's
trademark initialization sequence functional because without the
v.
compatibility was
interoperability could not be achieved see also Compaq Computer Corp.
1409, 1423 (S.D. Tex.
trademark sequence);
Inc., 908 F.
Procom Tech.,
Supp.
1995)(finding that
for purposes of
the word
"Compaq"
inserted in computer code
This is
compatibility was
functional).
especially important
as
advertisers
rely on the keywords
to
place their products and services before interested consumers.
Moreover, the keywords affect the cost and quality of Google's
AdWords
Program because absent
third party advertisers'
ability
to bid on trademarked terms as keyword triggers,
Google would be
required to create an alternative system for displaying paid advertisements on its website-a system which is potentially more
costly and less effective in generating relevant advertisements.
In terms of encouraging competition,
the keywords also serve an
advertising function that benefits consumers who expend the time
and energy to locate particular information,
and to compare prices. Google's
goods,
or services,
search engine provides
consumers with a highly useful means
of
searching the internet
for products and competitive prices.
If Google is deprived of
31
this use
of
the Rosetta
Stone Marks,
consumers
would
lose
the
ability to rapidly locate potentially relevant websites
promote genuine Rosetta Stone products at
that
competitive prices.
Consequently,
because
the
Court
is persuaded that Google's
as triggers for paid
particular use of
trademarked keywords
advertisements
is
functional,
and no prohibition exists
otherwise,
the Court holds that the functionality doctrine
infringement.
prevents a finding of
C.
Contributory Trademark Infringement Under the Lanham Act
On the issue of contributory trademark infringement, the
Court
finds that no reasonable trier of
fact could find that
Google intentionally induces or knowingly continues to permit third party advertisers selling counterfeit Rosetta Stone
products to use the Rosetta Stone Marks in their Sponsored Link text. To prevail on a contributory a plaintiff must another to show that the
titles and advertisement
trademark infringement claim, defendant
trademark,
"intentionally induces
or [] continues
infringe a
to one whom it
to supply its product
knows or has reason to know is
engaging in trademark
infringement
456 U.S. 844,
.
.
854
.
."
Inwood Labs.,
Although
Inc.
v.
Ives Labs,
Inc.,
to
(1982).
facially applicable
manufacturers and distributors of goods, Inwood's test for contributory trademark
courts have applied infringement "to a
32
service provider if he
or she exercises
sufficient
control
over
the
infringing conduct."
Tiffany Inc.
v.
eBay Inc.,
600
F.3d
93,
104
{2d Cir.
Inc.,
2010)
194
(citing Lockheed Martin Corp.
980,
v.
v.
Network
Solutions,
F.3d
984
(9th Cir.
1999));
Inc.,
see Hard
955 F.2d
Rock Cafe Licensing Corp.
Concession Servs.,
1143, as a
1148-49
(7th Cir. tort,"
1992) the
(treating trademark infringement analogized a swap meet owner to a . . . [as
"species of
court
whose vendors
sold infringing Hard Rock Cafe T-shirts common law "imposes the same duty
licensor on whom the
Inwood]
imposed on manufacturers and distributors"); Inc. v. Cherry Auction, Inc., 76 F.3d 259,
see also 265 (9th
Fonovisa, Cir.
test
1996)
(finding Hard Rock Cafe's application of the Inwood
to be "sound").
for contributory trademark infringement As proof of contributory infringement, (the
Rosetta Stone points
to Google's Query Suggestion Tool
trademark-specific trademark policy in
version launched after Google changed its
2009)
and its purported allowance of known infringers to bid on (Caruso Decl. Ex. 61 at 53:17-61:1;
the Rosetta Stone Marks.
Spaziano Decl.
0309893, Exs.
Ex.
1
(Ans.
f 57),
Ex.
18 at GOOG-RS-0309888-
21-23;
Spaziano Decl.
Tab A at Gultekin Dep.
123:8-124:4;
Rosetta Stone
Calhoun Decl.
argues that
Uf 4-6 & 8,
the
Exs.
B-D.)
First,
function
Query Suggestion Tool's
of generating suggested keywords to bid on brand names,
for advertisers
encourages to
them
which directly induces advertisers
33
infringe Second,
the Rosetta Stone Marks. Rosetta Stone argues
(Spaziano Decl.
Exs.
19-20.) to
that by allowing counterfeiters
open AdWords accounts and to bid on the Rosetta Stone Marks,
despite receiving notice of
supplying a service to those
their counterfeit
it knows or has
status,
Google
is
reason to know is
engaging in trademark infringement.
(Spaziano Decl.
Exs.
21-23;
Calhoun Decl.
Stone,
Ufl 2,
4-5,
8,
Exs.
B-D.)
According to Rosetta
is evident
Google's knowledge of Form S-l
the ongoing infringement
from its
Registration Statement to
the Securities "may be subject
(Spaziano
Exchange Commission,
to more
which predicted that Google
lawsuits . . . ."
trademark infringement
Decl.
Ex.
7.)
To illustrate,
that Google
Rosetta Stone proffers evidence of
the dates when
a spreadsheet
received which reflects
Rosetta Stone advised Google fraudulent,
that
a Sponsored Link was
the domain names associated with each such Sponsored
Link,
the text of each Sponsored Link,
response.
and the date and
Ex. 28; Calhoun
substance of Google's
(Caruso Decl.
Decl.
K 5,
Ex.
C.)
As documented,
from September 3,
2009 through
March 1,
2010,
Rosetta Stone notified Google of approximately
200
instances of Sponsored Links advertising counterfeit Rosetta
Stone products.
Summ. J. 11.)
(Calhoun Decl.
% 4,
Exs.
C-D;
PL's Mem.
Supp.
Rosetta Stone contends that even after being
notified of these websites,
Links
Google continued to allow Sponsored
same advertisers to use the
for other websites by these
34
Rosetta Stone Marks
as keyword triggers and in the text of
For example,
their
Sponsored Link advertisements.
between October
2009
to December 2009,
110 different
Sponsored Links purportedly "Rosetta Stone" as a keyword or
selling Rosetta Stone products used trigger, and most of the Links
included
"Rosetta Stone"
to the same
"Rosettastone"
in their display.
Registered
individual,
these 110 Links were displayed on 356,675 different (Calhoun Decl. Ex. D at GOOG-RS-011-
search-results pages.
000114
to GOOG-RS-011-000187.) Court, however, is unpersuaded by Rosetta Stone's
The
arguments.
advertisers
First,
the mere existence of a tool that assists
in
in optimizing their advertisements does not,
itself,
indicate intent to induce infringement.
Google's Query
Suggestion Tool operates by searching or indexing the particular website identified by an advertiser and returning a limited number of keyword ideas for websites not affiliated with the
URL.
(Spaziano Decl.
Ex.
18 at GOOG-RS-0309888-0309893.)
Before
Google
the list of keyword ideas is provided to the advertisers,
informs them that they are responsible for the keywords selected
and for ensuring that their use of the keywords does not violate any applicable laws.
22:11, 60:1, & Ex. 23:22-24:18; 30 at
(Caruso Decl.
Lien Decl. Ex.
Ex.
54
at 19:8-16,
40:25-42:11 Exs.
21:25& 58:15 & 12.)
29 at
124:10-17
& 125:11-20;
Lloyd Decl.
It is no secret that Google is in the business of
selling
35
advertising advertisers
space on on a
its
website
and profits basis.
from AdWords therefore has
"cost-per-click"
Google
an economic
and links
incentive
to increase
the number of
advertisements
its search
that appear
for every term entered
into
engine.
It would be good business practice to bid on keywords
for Google
to
encourage advertisers
result
that they know will
desire for economic
in higher click-through rates.
This
gain is common in all businesses.
Google
is no different.
into
A
desire for economic gain alone does not translate contributory trademark infringement.
Second, there is no evidence that Google is
supplying a
service to those it knows or has reason to know is engaging in trademark infringement. In a recent case from the Second
Circuit involving eBay Inc., auction and shopping website,
eBay's promotion of
a company that operates an online the court found that despite
certain vendors of premium branded jewelry
and its encouragement to those vendors to take advantage of the
demand for Tiffany merchandise, its relationship with third
parties'
advertisements is
insufficient to warrant a finding of
Tiffany Inc. v. eBay Inc.,
contributory trademark infringement. 600 F.3d 93, 107-09 (2d Cir. 2010).
Tiffany failed to
demonstrate that eBay was supplying services to individuals who
it knew sold counterfeit Tiffany goods.
Id.
eBay's generalized
knowledge of infringement of a seller's trademark on its website
36
was
insufficient
to
impose upon eBay an affirmative duty to Id. Absent evidence showing that eBay had
remedy the problem. specific
contemporary knowledge of which particular
listings
were be
infringing or would
infringe Id.
in the
future,
eBay could not
contributorily liable.
Like Tiffany, of
Rosetta Stone
fails
to show that Google knew
the alleged infringing activity by its AdWords advertisers. is little Google can do beyond expressly prohibiting for counterfeit goods, learns of taking down those and creating a
There
advertisements
advertisements when it
their existence,
team dedicated to fighting advertisements for counterfeit goods.
Google has worked closely with law enforcement and brand owners
to combat counterfeiting because
it knows
that
those
advertisements can create a bad experience for web users, Google ultimately relies on for its business.
Exs. 21, 23-25, & 28, Ex. 65 at 135:11-138:25,
who
{Caruso Decl.
Ex. 67 at 7:24-
8:19
& 108:2-109:16,
Ex.
68
at
50:4-51:10,
Ex.
53
at
36:5-37:16;
Lloyd Decl.
Exs. B-D.)
flU 10-11 & Ex.
6;
Louie Decl.
H 4-6; Calhoun Decl.
It would run counter to good business practice for
to those it
Google to encourage and provide advertising space
knows are infringing on the Rosetta Stone Marks.
eBay's
Similar to
Google
inability to detect which vendors were genuine, sold
has no mechanism for detecting which advertisers
counterfeit Rosetta Stone products.
As Rosetta Stone admits,
it
37
cannot determine
if
a Rosetta Stone product
is a counterfeit Opp'n Summ. J.
without physically inspecting it.
4.) Even with eBay's the knowledge of
(PL's Mem.
the high rate of Tiffany impute the degree of
counterfeits,
Second Circuit
did not
specific knowledge necessary for liability. at 109. In two surveys conducted in 2004
Tiffany,
600
F.3d the
and 2005
to assess site,
extent of counterfeit merchandise being sold on eBay's Tiffany found that 73.1% of
purchased under the 2004
the purported Tiffany goods
75.5% of those purchased
survey and
under the 2005 survey were counterfeit.3
Id. at 97.
eBay also
received thousands of Notice Of Claimed Infringement Formsonline
report
forms that allow intellectual property right owners
to eBay when they have good faith belief that a
to
listed
item infringed on a copyright or trademark.
Id.
at 106.
Comparing the evidence of knowledge attributed to eBay to the
roughly 200 notices Google received of Sponsored Links on its search
advertising counterfeit Rosetta Stone products results pages, has not met the Court necessarily holds showing that
that Rosetta Stone is
the burden of
summary judgment
proper as to its contributory trademark infringement claim.
3 The district court found that the surveys were methodologically flawed and
of questionable value. 600 F.3d at 97.
38
D.
Vicarious Trademark Infringement Under Rosetta Stone's claim for vicarious
the
Lanham Act
trademark infringement third party
also
fails because Google has
no control over
advertisers'
Marks
Sponsored Links or their use
text.
of
the Rosetta Stone
in the advertisement
Absent an agency relationship, imposed if the defendant and over the
vicarious infringer
liability can only be "exercise
joint ownership or control
infringing product."
Assoc, 494 F.3d 788,
Perfect
807
10,
Inc.
v.
Visa
Int'l
Serv.
(9th Cir.
2007}
(quoting Hard Rock
Cafe Licensing Corp.
v.
Concession Servs.,
Inc.,
955
F.2d at
1150
(reasoning that vicarious
liability)).
liability is a joint-tortfeasor
Rosetta Stone would have
theory of
In this case,
to show that,
aside
from providing a list of keywords to its
to choose from, Google has joint ownership
AdWords advertisers or controls
the alleged infringing advertisements
appearing on
its website.
Rosetta Stone's Supp. There, 2d 700, 705 reliance on GEICO v. Va. 2004) offers Google, little Inc., 330 F.
(E.D.
assistance.
the court addressed a motion to dismiss and ended its
analysis by testing the sufficiency of GEICO's allegations
that
Google monitored and controlled third-party advertisements after
selling to the advertisers links to trademarked terms. Id. at
702.
While the court found that GEICO sufficiently stated a infringement, it did not address the merits
claim for vicarious
39
of to
the
claim.
Id.
Thus,
contrary to Rosetta Stone,
GEICO had 10,
satisfy a lower burden of proof.
Relying on Perfect
Rosetta Stone also argues
because it has a legal
that Google is vicariously liable
to stop the infringing conduct and
right
the ability to do so,
at Hagan Dep. 27:3-18,
but
fails
5,
to act.
2010,
{Spaziano Decl.
62:4-22,
Tab A
Louie
Mar.
Lloyd Dep.
Dep.
25:01-27:17,
28:2-11,
33:19-34:19,
&
37:4-8;
Spaziano Decl.
Ex.
This
1
(Ans.
1U 41,
43,
Sc 56);
Calhoun Decl.
UH 6 & 8,
EXS.
B-D.)
standard is
inapplicable here because Perfect
10 concerned its
a plaintiff's
allegations of
copyright infringement of
thumbnail
images of nude models.
494
F.3d at 807.
Finding that
of its
the plaintiff was unlikely to succeed on the merits vicarious infringement claims against the defendant
internet
retailer,
the court explained that a financial relationship is
to establish joint ownership and control.
Thus, the mere fact that Google has a
insufficient
at 807-08.
See id.
financial
relationship with the alleged infringers does not demonstrate
Google's
website.
control
of
the
Sponsored Links appearing on its
Google
is not engaged
in the business of
selling goods but
in selling space on a search page which happens to be a prime
location for advertisers wishing to display their advertisements to online shoppers. This is no different
space
than building owners
for billboards. Given
in New York's Times Square who sell
40
Times
Square's high pedestrian and vehicular
traffic,
billboards
located there offer advertisers great visibility, Google's popular search engine offers
just as
third party advertisers a for goods and
great opportunity to display their advertisements services. Aside from their location and size,
advertisement by
billboards also allows creative
and embellishments, a feature
"customizing"
through extensions
similar to a third party their Sponsored
advertiser's ability to create the content of
Link on Google's website.
Without evidence that Google's Keyword Tools or its employees direct or influence advertisers
Stone Marks, Rosetta Stone has not
to bid on the Rosetta
Google controls
shown that
the appearance and content of the Rosetta Stone Marks
the Sponsored Links
and the use of vicarious
in those Links.
Therefore,
liability cannot be imposed on Google.
E.
Trademark Dilution Under the Lanham Act
Insofar as Google does not sell
language learning software,
it cannot be held liable
for trademark dilution.
Additionally,
Rosetta Stone fails to show trademark dilution where its brand awareness has only increased and where the reputation of
Marks has not been harmed since Google changed its
its
trademark
policy in 2004. ("TDRA"),
Under the Trademark Dilution Revision Act
which removed a plaintiff's obligation to show proof
41
of
economic
loss,
a markholder at
is
"entitled
to an
injunction
against another person who, has become famous, commences
any time after the owner's mark of a mark or trade name in
use
commerce
that
is
likely to cause dilution by blurring or
the famous mark[.]" 15 U.S.C. §
dilution by tarnishment of
1125(c)(l)
Dog,
(2006);
507
Louis Vuitton Malletier S.A.
264 n.2 (4th Cir.
v.
Haute Diggity
To
L.L.C.,
F.3d 252,
2007).
establish trademark dilution, famous Marks are distinctive; that allegedly dilutes the
Rosetta Stone must prove: (2) Google uses a mark (3)
(1)
its
in commerce
famous Marks;
a similarity exists
rise to
between the Rosetta Stone Marks and Google's mark giving
an association between the marks;
and
(4)
the association is
likely to impair the distinctiveness or reputation of the
Rosetta Stone Marks. Louis Vuitton, 507 F.3d at 264-65 (listing
the elements of a trademark dilution claim under the TDRA). dispute are the first,
Stone's claim.
At
third,
and fourth elements of Rosetta
As
to the first element,
the Rosetta Stone Marks are
famous
and have been since at
awareness
112:1-7,
6 &
least 2009,
when Rosetta Stone's brand
Ex. 69 at 111:6-12
Mot.
reached 75%.
Ex. 30-34, Ex.
(Caruso Decl.
60
24.)
&
J.
at
131:6-132:6;
The Marks
Def.'s
Summ.
26-27;
PL's
Opp'n
need not
have been
famous
when Google revised its
Rosetta Stone must only
trademark policy in 2004.
show that at any time after
Instead,
its Marks
42
became
famous,
Google began using a mark or
trade name
in
commerce Marks. §
that was
likely to cause dilution of As
the Rosetta Stone Rosetta Stone
to the Rosetta
(PL's Opp'n
1125(c)(1).
to the third element,
a mark similar
does not argue
Stone Marks
that Google uses
on Google's
own goods
or services.
25.)
The TDRA provides if it
that a claim for dilution is not "[a]ny fair use . . . of a famous mark
source for the
actionable
involves
by another person other than as a designation of
person's . . .
own goods or services,
including use
in connection with to compare
advertising or promotion that permits
§ 1125(c)(3)(A)
consumers
goods or services[.]"
(emphasis added).
Nonetheless,
Rosetta Stone relies on cases involving defendants
who used plaintiffs'
marks
to capitalize on the plaintiffs'
own goods
No.
fame
and boost the defendants'
Furstenberg Studio v.
or services.
Diane Von
2007 WL
Snyder,
l:06cvl356
(JCC),
2688184,
at *4
(E.D.
Va.
Sept.
10 2007)
(finding no dispute that
defendants used the identical DVF mark on the inferior-quality
dresses they sold and that such act was likely to cause dilution
of the DVF mark);
Inc. v. Doughney,
People for the Ethical
113 F. Supp. 2d 915,
Treatment of Animals,
(E.D. Va. 2000)
920
(finding the defendant guilty of blurring the famous PETA Mark
because he used an identical mark to mentally associate to that mark), aff'd, 263 F.3d 359, 369 (4th Cir. 2001). PETA.ORG Absent
proof that Google uses the Rosetta Stone Marks
to identify its
43
own goods and services, liable for
the
Court
finds
that
Google
is not
trademark dilution.
Even if § 1125(c)
the Court
adopts
the argument
that
liability under
may be
imposed for Google's
fails
sale of
the Rosetta Stone
final
Marks,
Rosetta Stone nonetheless
to satisfy the
element of
its
trademark dilution claim--that the association is likely to impair the distinctiveness the of the
between the marks famous marks or is marks. that
likely to harm the reputation of 507 F.3d at 265. If there is
famous
Louis Vuitton,
evidence of
the association is
likely to impair the distinctiveness
there may be a dilution by blurring
the Rosetta Stone Marks,
claim.
§
1125(c);
See Louis Vuitton, in turn refers
507
F.3d at
264 recognition
("'Distinctiveness'
to the public's
that the famous mark identifies a single
using the famous mark."). If there
source of the product
that the
is evidence
association is likely to harm the reputation of the Marks,
may be a dilution by tarnishment claim. § 1125(c).
there
Assuming the Rosetta Stone Marks were distinctive since 2004,
famous and
the Court sees no evidence of dilution
by blurring when Rosetta Stone's brand awareness has only
increased since Google revised its trademark policy in 2004.
The TDRA allows courts to consider the degree of recognition of
a famous mark when determining whether that mark's
distinctiveness has been impaired.
§
1125
(c)(2)(B).
The
44
Fourth Circuit has also found that no claim for dilution by
blurring exists where a defendants' public 507 identification of 264 product only increases Louis Vuitton,
the plaintiffs'
marks.
F.3d at
(finding no
likelihood of dilution by blurring dog toy parodied plaintiff's
where
defendant's
"Chewy Vuiton"
marks
Here,
and caused an increase
Rosetta Stone's in 2005
in plaintiff's
brand recognition).
increased since Ex. 69 at
brand awareness has to 75% in 2009.
Ex. 60
only
2004-from 15%
111:6-12 &
(Caruso Decl.
at 131:6-132:6;
112:1-7,
Ex.
30-34,
Def.'s
Mot.
Summ.
J.
6
& 26-27;
PL's
Opp'n 24.)
Its
brand awareness
equity also increased from 19%
Decl. Ex. 32, Ex. 69 at
in 2005
to 95%
Thus,
in 2009.
the
(Caruso
120:21-122:8.)
distinctiveness
of
the Rosetta Stone Marks has
not been
impaired,
and Rosetta Stone cannot
show that Google's trademark
policy likely caused dilution by blurring. The Court also finds no dilution by
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?