Rosetta Stone LTD v. Google Inc.

Filing 62

TRANSCRIPT of Proceedings held on February 4, 2010, before Judge Theresa Buchanan. Court Reporter/Transcriber Renecia A. Wilson, Telephone number 703-501-1580. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 3/22/2010. Redacted Transcript Deadline set for 4/20/2010. Release of Transcript Restriction set for 5/19/2010.(wilson, renecia)

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1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division ROSETTA STONE, LTD., Plaintiff, VS. GOOGLE, INC., Defendant. ) ) ) ) ) ) ) ) ) ) ) Civil No. 09-736 February 4, 2010 REPORTER'S TRANSCRIPT MOTIONS HEARING BEFORE: THE HONORABLE THERESA BUCHANAN UNITED STATES MAGISTRATE JUDGE APPEARANCES: FOR THE PLAINTIFF: FOR THE DEFENDANT: SKADDEN ARPS SLATE MEAGHER & FLOM BY: WARREN THOMAS ALLEN, ESQ. JENNIFER LYNN SPAZIANO, ESQ. CLIFFORD MYER SLOAN, ESQ. QUINN, EMANUEL, URQUHART OLIVER BY: MARGARET CARUSO, ESQ. ODIN FEKLMAN & PIDDLEMAN BY: JONATHAN FRIEDEN, ESQ. --- OFFICIAL COURT REPORTER: RENECIA A. SMITH-WILSON, RMR U.S. District Court 401 Courthouse Square Alexandria, VA 22314 (703)501-1580 2 1 2 (Thereupon, the following was heard in open court at 2:00 p.m.) 3 4 THE CLERK: Rosetta Stone versus Google, civil action 09cv736. 5 THE COURT: Good morning. 6 MR. ALLEN: Good morning, Your Honor. 7 Warren Allen on behalf of plaintiff, Rosetta Stone. 8 here with Jennifer Spaziano and Clifford Sloan from 9 Skadden Arps. 10 THE COURT: All right, good morning. 11 MR. ALLEN: Ms. Spaziano will be arguing. 12 THE COURT: Good morning. 13 MS. CARUSO: I'm Hi, Your Honor. I'm Margaret 14 Caruso from Quinn, Emanuel, Urquhart, Oliver & Hedges 15 for Google, Inc, the defendant. 16 THE COURT: 17 MS. CARUSO: 18 That's all right. Good morning. And this is Mr. Jonathan Frieden. 19 THE COURT: All right. Thank you all for 20 coming in today, but I won't be here tomorrow. 21 an 8 a.m. flight to Florida. 22 make it. 23 everything, and I've read all of the discovery requests. 24 25 Ha, ha, ha. I've got So, hope I Not to rub it in, but anyway, I've read Do you have anything to add to your motion to compel? 3 1 MS. SPAZIANO: 2 Jen Spaziano on behalf of plaintiff, the 3 Yes, Your Honor. movant, Rosetta Stone. 4 You've read all the pleadings -- 5 THE COURT: 6 MS. SPAZIANO: I have. You can basically see that we 7 have reached agreement on a lot of the document requests 8 that were at issue in the opening brief. 9 But, that there's really an impasse between 10 the parties with respect to what's left in issue and I 11 think irrespective of the number of requests that remain 12 outstanding, it really boils down to one thing which is 13 whether Google made the pool from discovery in this case 14 documents relating to similar issues raised regarding 15 Google's advertising program. 16 question that we're addressing here today. 17 18 19 That's really the And for many reasons, the simple answer to the question is no. I've got some background that I'm happy to 20 tell you about regarding Rosetta Stone and what it does 21 and how important its marks are to it. 22 It's the leader in language education in the 23 United States. And it owns numerous federally 24 registered trademarks that it has worked very hard to 25 market and protect. 4 1 THE COURT: 2 MS. SPAZIANO: 3 And, I'm aware of that. I know you are. You hear Rosetta Stone, you know what it means. 4 THE COURT: Right. 5 MS. SPAZIANO: It doesn't mean the artifact. 6 It means the language learning software. 7 Google. 8 And what's at issue here is their sale of 9 advertisements -- their sale of trademarks for the 10 And you know Google operates the Internet search engine. advertisement. 11 THE COURT: Right. 12 MS. SPAZIANO: Basically, Google takes the 13 position here that essentially information arising or 14 discussed or communications, documents relating to 15 either litigation involving Google's practice of selling 16 trademarks or challenges that don't rise to the level of 17 litigation where somebody writes them a letter, a cease 18 and desist letter or asks them not to sell their 19 trademark, not information that we're entitled to 20 discover. 21 And they base that position on the argument 22 that this involves likelihood of confusion and whether 23 Google's practices resulted in a likelihood of confusion 24 with respect to other trademarks is not relevant to the 25 question of whether Google's practices results in 5 1 likelihood of confusion with respect to Rosetta Stone's 2 trademarks. 3 And focusing on this very narrow issue of 4 customer confusion, Google asked the Court basically to 5 ignore the forest for the trees. 6 other challenges to Google's practices are not going to 7 address only the particular marks at issue in those 8 cases, the trees that Google asks the Court to focus on. 9 They also will address Google's advertising practices Documents relating to 10 generally, the forest that's really at issue in this 11 case. 12 13 THE COURT: I do have a couple of specific questions if I could. 14 MS. SPAZIANO: 15 THE COURT: Please. Requests number five and 113 16 concern me because the apparent breadth of the request, 17 and I'm not quite sure what you're aiming for in those 18 requests. 19 Could you explain those to me and why you 20 need such -- or have you thought about narrowing that -- 21 those two requests? 22 MS. SPAZIANO: The issue of narrowing the 23 requests I think is something that we're willing to work 24 with Google on. 25 actually quite effectively -- I think the parties have worked 6 1 THE COURT: Well, have you talked about 2 these two requests specifically in terms of narrowing 3 them? 4 5 MS. SPAZIANO: In -- the answer is I have not because we just got involved in the case recently. 6 THE COURT: Uh-huh. 7 MS. SPAZIANO: My understanding is that 8 there have been discussions with respect to narrowing 9 the requests and that the parties have worked rather 10 well in narrowing requests. 11 THE COURT: 12 MS. SPAZIANO: 13 14 Uh-huh. But the concern here is that Google has simply taken the blanket position that -THE COURT: I understand that, but I'm 15 trying to figure out is -- because my specific concern 16 with regard to five and 113 is that I think by looking 17 at them that they're too broad. 18 MS. SPAZIANO: 19 THE COURT: They're too broad. Even if I were to grant them to 20 you, they seem broad to me. 21 what it is you want, really want in five and 113. 22 23 MS. SPAZIANO: And I'm trying to find out Sure. What we're looking for are communications between Google and its customers. 24 THE COURT: 25 mean paying customers? Now when you say customers, you 7 1 MS. SPAZIANO: 2 THE COURT: 3 MS. SPAZIANO: 4 what we're looking for -- 5 6 THE COURT: 9 10 Advertisers. -- advertisers, exactly. And And then you say or with users of their Internet search engine. 7 8 We mean -- MS. SPAZIANO: If a customer, if a user, you or me -THE COURT: Right. MS. SPAZIANO: -- who runs the Google search 11 complains about the advertisements, word is sent, a note 12 to Google saying I don't understand how you're ad -- 13 what it means for something to be a sponsored ad. 14 So users could communicate with Google in a 15 way that could give rise to communications that are 16 relevant to the claims at issue in this case. 17 THE COURT: Well, except the way you worded 18 this is not so clear or specific. 19 the sale -- just generally. 20 MS. SPAZIANO: 21 THE COURT: It says relating to Sure. Relating to the sale, marketing, 22 promotion, offering, designation, use or inclusion of 23 the trademarks. 24 That's awfully still broad, I think. 25 MS. SPAZIANO: Broad for you. What we're 8 1 trying to get at through this request are basically 2 communications that Google received from its advertisers 3 or from users that basically question or raise issues 4 with respect to the use of trademarks in sponsored ads. 5 So, for example, if a -- if I were to sent 6 an e-mail to Google that says I just searched for 7 Rosetta Stone, and I was brought to a website that I 8 purchased pirate software on, and I don't understand how 9 that could have happened because I thought I was getting 10 to a Rosetta Stone site. 11 That's the type of -- 12 THE COURT: Well, is your question really as 13 far as users are concerned relating to confusion and 14 sponsored ads? 15 MS. SPAZIANO: Relating to confusion and 16 sponsored ads but not specifically the Rosetta Stone 17 mark. 18 THE COURT: Okay. 19 MS. SPAZIANO: The idea that Google's 20 practice of using trademarks in sponsored ads creates 21 confusion. 22 THE COURT: Okay. And in regards to 113, do 23 you have any reason to believe that there is a rankings 24 that's already created by Google or is this something 25 that you're asking them to create? 9 1 MS. SPAZIANO: In request numbers 107 to 2 112, there were requests that certain information be 3 created. 4 have to look to Margaret for some assistance in why it 5 is that 107 to 112 are off the table but 113 remains on 6 the table, as I was not involved in those discussions 7 and 113 builds on 107 to 112. 8 9 10 11 And on this one, quite frankly, I'm going to THE COURT: Well, let me look back at those because I really wasn't focusing on those. Hold on a second. MS. SPAZIANO: May I invite Ms. Caruso to 12 try to respond to that to help us? 13 THE COURT: 14 MS. CARUSO: Sure. Well, I can't explain why 113 15 remains on the table, but I can say that 107 and 112 16 Rosetta Stone's prior counsel agreed to withdraw on the 17 grounds that those were overly burdensome because they 18 would require Google to -- 19 THE COURT: 20 MS. CARUSO: 21 THE COURT: 22 23 24 25 Okay. -- create because these -So, is 113 -- does Google have any kind of document that already exists? MS. CARUSO: No, Your Honor. It would have to create all of those multiple, multiple documents. THE COURT: Okay, all right. Then let me go 10 1 back to Google -- I mean Rosetta Stone. 2 All right. 3 agreed to? 4 And what temporal limits have your requests? 5 Is it back to 2002 with regard to all of MS. SPAZIANO: I believe that Google has 6 agreed to produce back to 2004. 7 we're entitled to documents that go back further than 8 that because obviously, documents outside the statute of 9 limitations would be relevant to documents within the 10 Our position is that statute of limitations. 11 My understanding is that there have been 12 certain categories of documents with respect to which 13 Google has agreed to produce documents predating 2004, 14 presumably in recognition of the position that those 15 documents do, in fact, bear on issues occurring during 16 the relevant timeframe, the statute of limitations 17 timeframe. 18 So, our position is that to the extent that 19 documents are discoverable with respect to particular 20 topics, challenges to the add words program, litigation 21 involving the add words program, we would be entitled to 22 documents that predate 2004 as well. 23 THE COURT: Okay. 24 settlement agreements? 25 would show, I mean, or prove. And, what about the I really don't know what those Settlement agreements 11 1 involve so many factors. 2 MS. SPAZIANO: They do involve so many 3 factors. 4 say, and that's the struggle for being in the position 5 of asking for documents. 6 But the issue is that we don't know what they I can look at the fact that there's been a 7 litigation and I can say, well, your depositions are 8 certainly going to have information and interrogatories 9 are certainly going to be information, and request for 10 admissions are certainly going to have information. 11 Expert reports are certainly going to have information. 12 I don't know what -- 13 14 THE COURT: would you have from a settlement agreement, though? 15 16 MS. SPAZIANO: THE COURT: Whereas Google does not admit liability. 19 MS. SPAZIANO: 20 THE COURT: 21 22 23 Whereas clause, whereas Google -- 17 18 What kind of useable information Well -- I mean I guarantee you that's in there, so are you -MS. SPAZIANO: That's assuming that that's what it says. 24 THE COURT: Right. 25 MS. SPAZIANO: I mean you guarantee me that 12 1 it's in there. I suspect that it's in there. 2 THE COURT: Yeah. 3 MS. SPAZIANO: But taking it on face value 4 that in there, but not asking for the documents that 5 could contain a damning admission that's relevant to 6 what they say. 7 requested, they demonstrate that they can engage in some 8 kind of a practice that would, you know, stop the 9 trademark infringement and still allow for certain, you Or it could be in the relief that's 10 know, certain practices to continue without trademark 11 infringement. I don't know what's in them. 12 THE COURT: Okay. 13 MS. SPAZIANO: I understand the fact that if 14 there are standard settlement agreement that just denies 15 all liability and agrees on some kind of a settlement 16 payment and results, it might not have information, but 17 it very well could. 18 THE COURT: 19 MS. SPAZIANO: 20 21 22 23 Okay. And it is reasonably likely to lead to the discoverable of admissible evidence. THE COURT: All right. Let me hear from counsel for Google. MS. CARUSO: Thank you, Your Honor. I'd 24 like to pick up with the settlement agreement point 25 because I think it's illuminating on a number of these 13 1 issues. 2 Even if the settlement agreements did say 3 the very unlikely event they said whereas Google admits 4 infringement, Rule 408 tells us that's not admissible to 5 prove infringement. 6 THE COURT: Uh-huh. 7 MS. CARUSO: And given that it's not 8 admissible to prove infringement, it has no relevance on 9 the issue of intent. 10 of our opening brief. And we cited a case on page eleven It's a -- 11 THE COURT: I'm satisfied as to those -- 12 MS. CARUSO: 13 THE COURT: -- as to the settlement Okay. 14 agreement, so why don't you address any other issue 15 you'd like. 16 17 MS. CARUSO: Sure. I'll continue on from there -- 18 THE COURT: 19 MS. CARUSO: Uh-huh. -- because it raises the same 20 types of issues. All of the -- any one cease and desist 21 letters, any e-mail that we've gotten from a third party 22 saying Google, we don't like your policy, any consumer 23 who said Google, I bought this product from a website 24 that was advertised on your site and I don't like it. 25 It's not what I thought it would be, all of those in 14 1 order to be relevant to the issue of intent which is 2 what Rosetta Stone has identified are only going to be 3 relevant to the extent that those prove or there's proof 4 that there was infringement. 5 that there was ever infringement. 6 held liable for infringing trademarks in any 7 circumstances, especially the advertising circumstance. And there's no proof here Google has never been 8 And so, this would require trials and I 9 can't say mini trials because they would be just as 10 expensive on this trial on every single one of these 11 things. 12 us from the limited time we have left in discovery to 13 focus on the issues that matter here which are Rosetta 14 Stone's trademarks. And it's just going to take us -- really divert 15 It's important, I think, to understand when 16 we say we're not using these third party-type documents 17 it doesn't mean they're not getting any general studies, 18 any general policy, reasoning, any policies. 19 these things that Google has done with respect to 20 trademarks generally speaking, it has agreed to provide 21 and has provided mostly, still in the process of 22 production. 23 But, these are very far afield. All of And I can 24 come back to the issue of relevance because I think it 25 really -- it's a show stopper. 15 1 But the issue of burden I think is equally a 2 show stopper, because in order to collect type of 3 information they're talking about, there is no 4 formulated search. 5 trademarks to look for. 6 There's not even a list of We would have to -- Google would have to 7 manually review all of the documents at a minimum in its 8 Trax database which keeps all communications with 9 advertisers and with consumers about advertising. 10 And those -- those databases contains ten terabytes of data. 11 THE COURT: How are they collated or 12 categorized? 13 together with no organization, is it? 14 15 I mean, it isn't just all dumped in there MS. CARUSO: If you looked by advertiser, advertising campaign -- 16 THE COURT: 17 MS. CARUSO: 18 I don't think so. Uh-huh. -- you can kind of go into it that way. 19 THE COURT: 20 MS. CARUSO: Uh-huh. But, there's nothing about 21 their request that enables it to be narrowed in that 22 way. 23 thing for anything with Rosetta Stone in it. We have given them -- we've searched the whole 24 THE COURT: 25 MS. CARUSO: Uh-huh. That -- they have all of that. 16 1 THE COURT: 2 MS. CARUSO: Uh-huh. But, you know, in terms of some 3 customer saying I purchased what I thought was a Nike 4 shoe and it's not a Nike shoe, what are the search terms 5 that we can use to find that e-mail? 6 7 8 9 THE COURT: So, the only thing they're organized as to is marketing campaigns? MS. CARUSO: The advertiser -- you can look by advertiser and then you can look by their advertising 10 ID number and then by their sub campaigns because 11 advertisers run -- Amazon, for example, runs numerous 12 different campaigns at any given point in time. 13 THE COURT: 14 MS. CARUSO: Okay. So, on this issue of, you know, 15 all these communications with third parties and 16 communications with consumers, ten terabytes of data, 17 it's something that's really hard to even conceive of, 18 but I'm told that it would equivalent -- come out to 19 greater than two billion pages of text which if you 20 assumed one second to review every one of those pages 21 would take someone 74 years, 24/7 review. 22 23 24 25 We certainly don't think that whatever relevance they may have justifies that burden. THE COURT: request number five? But, would that relate just to 17 1 2 MS. CARUSO: only one. 3 4 5 Request number five is not the THE COURT: -- or is that -- would it be ten as well? MS. CARUSO: Ten is one that's very broad. 6 It would require the same thing. 7 79 also would go to that same extent. 8 broad in calling for all -- 9 10 11 12 13 THE COURT: 23, the same thing. They're extremely 23 is guidelines and policies, not letters of complaint. MS. CARUSO: 23. It's -- if I recall correctly, I just -THE COURT: Actually, ten would not relate 14 because that's really just with regard to third parties 15 whose trademarks are used, not just general consumers. 16 17 18 I don't see anything else that would relate to consumer letters. MS. CARUSO: Well, this one reads all 19 documents relating to any Google policies relating to 20 the sale, marketing, promotion, offering, designation, 21 use or inclusion of trademarks owned by third parties is 22 the key words. 23 So if we just stop right there, I'd be 24 surprised if Rosetta Stone takes the position that, for 25 example, a consumer's statement, Google, your trademark 18 1 policy winds up with me but -- 2 THE COURT: 3 if we delete the consumer letters? 4 Well, what are we talking about MS. CARUSO: We're still talking about a 5 whole lot of trouble because trademarks owned by third 6 parties as key words is not a separate and defined 7 category within Google. 8 things. 9 We don't have a list of those We don't have -THE COURT: You mean to tell me that the 10 consumer who complains about what they got linked to 11 when they clicked on Google is kept with the same 12 letters from a corporation that complains about how 13 you're using its trademark? 14 MS. CARUSO: It depends on what exactly that 15 letter from the corporation says, but in some instances, 16 yes. 17 18 THE COURT: Well, how would they normally be kept if it's a -- 19 MS. CARUSO: 20 THE COURT: -- big letter from a big company? 21 MS. CARUSO: 22 Is -- a letter that raises a violation of Google's trademark policies -- 23 THE COURT: 24 MS. CARUSO: 25 So a -- Uh-huh. -- would be kept in one place. And that would be, for example, under a Google's current 19 1 policy if someone said so -- you know, party X is 2 advertising and my trademark name shows up in the text 3 of their advertisement. 4 THE COURT: 5 MS. CARUSO: Uh-huh. And they're not an authorized 6 reseller and they're not a third party opinion site. 7 They don't fit into the terms of what Google says you 8 can use my -- 9 THE COURT: 10 11 MS. CARUSO: Uh-huh. -- trademark for in a text of the ad. 12 If that is the complaint, then it would go 13 to Google's trademark team and be processed as a 14 trademark complaint, and it would be in that batch of 15 documents. 16 THE COURT: 17 MS. CARUSO: Uh-huh. -- which is a large batch of 18 documents. But letters that say, it looks like this 19 person is bidding on my key word and I don't like -- 20 THE COURT: 21 MS. CARUSO: 22 THE COURT: 23 MS. CARUSO: This person is doing what? Bidding. Oh. Trying to have their ad 24 displayed in response to that trademark being entered as 25 a search query, then those would -- those don't violate 20 1 Google's current trademark policy and wouldn't go to 2 that database group. 3 Trax database. 4 They would remain in the general THE COURT: So, it sounds as though you have 5 easier access to things that are not in the Trax 6 database? 7 MS. CARUSO: I -- there are fewer things, 8 but still a very large magnitude of things in terms of 9 those types of complaints. 10 And, again, that doesn't seem to me to be 11 what Rosetta Stone is looking for, or certainly not the 12 limit of what they're looking for. 13 Again, I'm just talking about complaints 14 that others are in violation of Google's trademark 15 policies. 16 THE COURT: But, what if they're not saying 17 it's Google's trademark policy that I'm complaining 18 about, just complaining about what I perceive to be your 19 infringement of my trademark. 20 trademark policy? 21 office? 22 23 Where does that go, legal counsel's MS. CARUSO: general database. Does that go into this That -- it's filed in this And -- 24 THE COURT: 25 MS. CARUSO: Trax. Yes, in Trax. 21 1 2 3 4 5 6 7 THE COURT: But is it also filed somewhere else then? MS. CARUSO: Not that I'm aware of, Your Honor and I've spoken to Google about this. THE COURT: Where else could such a letter be filed besides in the trademarks policy group? MS. CARUSO: I'm not aware of -- such a 8 letter as you've just described basically saying this 9 violates my trademark separate and apart from Google's 10 trademark policies -- 11 THE COURT: 12 MS. CARUSO: 13 14 Uh-huh. -- would just remain in Trax database because -THE COURT: 15 office or this as well? 16 MS. CARUSO: They wouldn't go to counsel's Google wouldn't take further 17 action on it because it wouldn't -- it doesn't rise to 18 the level of something that Google has determined it 19 will take action on. 20 THE COURT: Well, how does Google determine 21 it will take action on something, only if somebody says 22 it violates Google's trademark policy? 23 24 25 MS. CARUSO: Well, they don't have to use those magic words. THE COURT: Okay. That's what I'm trying to 22 1 2 figure out. MS. CARUSO: Someone would view the 3 communication as it comes in and make that 4 determination. 5 6 7 THE COURT: I see, okay. I understand. Anything else? MS. CARUSO: Yes, Your Honor. So, the 8 trademark infringement and -- the real -- the root issue 9 here is going to be likelihood of confusion. And 10 there's no general holding out there in the law that the 11 sale of -- the use of a trademark as a key word, that in 12 and of itself is infringing. 13 All the cases say you have to look at the 14 facts of the case. 15 advertising, what is the content of the ad, what is the 16 website that it's linked to. 17 You have to look at who's doing the And those very dramatically -- in the case 18 of Rosetta Stone, if you've done a recent search on 19 them, the main non-Rosetta Stone sponsored link that 20 shows up is Amazon.com, an authorized reseller of 21 Rosetta Stone. 22 That's very different from if you have 23 mostly counterfeiters who are bidding. And of course, 24 that violates Google trademark policy and they would 25 take those down upon notice, or if you have competitors, 23 1 or if you have parties who are bidding on the word 2 because the word has a separate and independent meaning. 3 For example if someone was advertising 4 British museum tours to see the Rosetta Stone, or Apple 5 if someone was bidding because they had some other Apple 6 product not related to the company. 7 8 So, to take those collectively just doesn't say very much in this case about these facts. 9 And if what they -- 10 THE COURT: Well, how is it really? I mean, 11 this is a very different type of trademark infringement 12 case. 13 know, how close a violation it is and so forth and so 14 on. And normally you really would be looking at, you It would be unique as to each particular trademark. 15 I really don't see how the trademark holders 16 in these cases are different from Rosetta Stone. 17 They're not trying to invade the actual trademark in 18 terms of making something sound similar to Rosetta 19 Stone. 20 the Geico name, and you're using the Rosetta Stone name 21 and the -- you know, I forget who the others were, 22 American Airlines name specifically when it's put into 23 the search engine to use that to link to advertisers. 24 25 They're -- you're using the name. You're using So I don't know how you have -- there may be to some degree that they can be differentiated and 24 1 perhaps that would arise when evidence of the other 2 manufacturer -- the other companies's trademarks might 3 be introduced into evidence at trial. 4 5 But for discovery purposes, I really don't see how they're very different. 6 MS. CARUSO: Well, let me talk about that a 7 little bit. I mean in the Geico case, the Court drew a 8 distinction between links that were just triggered by 9 the key word which it found no problem with and found 10 that Google hadn't produced any evidence that consumers 11 were not confused if it used the name. 12 THE COURT: Well, that's not necessarily the 13 case. 14 necessarily it says what you're saying it says or that 15 it goes as far as you'd like to think it does. 16 also don't think that it really is relevant to this case 17 because it was not an ultimate determination of the 18 case. 19 and it was settled. 20 I've read the opinion, and I really don't think But I That was just for, you know, injunctive purposes, I mean all of these cases have been settled, 21 and I find that very interesting. And I don't think 22 that there's a definitive opinion on here, and I don't 23 think that you can rely on the Geico case to the extent 24 that you'd like to. 25 certainly on Judge Lee. And I think that it's not binding So -- 25 1 MS. CARUSO: 2 THE COURT: I think that -I think we're starting really 3 from ground zero again, and I don't think even Judge 4 Brinkema would say her opinion in the Geico case would 5 necessarily affect the discovery rulings in this case or 6 any other case. 7 MS. CARUSO: Well, I think -- what she 8 clearly said in the opinion was that it was her ruling 9 which was -- 10 THE COURT: It was confined to Geico and the 11 Geico fact, and they had a problem with their expert 12 report, clearly. 13 14 15 MS. CARUSO: Right, exactly. And again, she said it was on the facts of that case. THE COURT: Right. And I don't think it's 16 the same thing. 17 problem with their expert report. 18 19 20 21 I really don't because they had a big MS. CARUSO: there's a big problem with the expert report here, too. THE COURT: MS. CARUSO: 23 THE COURT: 25 Well, I haven't seen that, yet. I haven't seen that yet. 22 24 Well, Your Honor, I think But -She still found that there was actual confusion. MS. CARUSO: She found that Google had not 26 1 rebutted it as the use of the name in the ads. 2 THE COURT: 3 MS. CARUSO: Right, right. But that's a distinction right 4 there, use of the name in the ad versus not using the 5 name in the ad. 6 And the cases all, even though they aren't 7 the traditional, you know, Starbucks versus Starchucks 8 kind of trademark case, all come down to the same 9 likelihood of confusion analysis. 10 And here, you know, all of these survey 11 reports and the other cases, they're different types of 12 advertisers, different types of advertisements, 13 different types of natural results that are being looked 14 at. 15 And in deposing the plaintiff's expert on 16 the likelihood of confusion issue, he admitted -- you 17 can't talk about how things would be with other 18 different types of advertisements and different types of 19 natural links because -- 20 THE COURT: 21 MS. CARUSO: 22 You're talking about the Geico? I'm talking about this Rosetta Stone's expert. 23 THE COURT: 24 MS. CARUSO: 25 THE COURT: Well, I haven't seen that. I understand. And I don't know how that's 27 1 relevant to the discovery request. 2 MS. CARUSO: Well, it goes to the fact that 3 whatever Google has done with regard to other companies 4 doesn't have bearing on whether consumers are likely 5 to -- 6 THE COURT: 7 MS. CARUSO: Doesn't it go to willfulness? It only goes to willfulness if 8 there is evidence -- if there's proof of intent like 9 the -- 10 THE COURT: Yeah, well what do they mean to 11 do when they're using -- I don't understand how you can 12 say that it's not relevant when what we're talking about 13 is really the exact same act, someone using -- you using 14 the actual trademark of a company. 15 MS. CARUSO: 16 THE COURT: Your Honor, I appreciate that. And I'm having trouble. Maybe 17 you think you can convince me somehow, go ahead and give 18 it a try. 19 MS. CARUSO: The likelihood of confusion 20 factors don't only focus on the similarity of the marks 21 at issue. They also -- 22 THE COURT: 23 You're using the mark. 24 MS. CARUSO: 25 THE COURT: There's no similarity of marks. That's correct. Okay. 28 1 2 MS. CARUSO: Their case goes beyond just -- 3 4 Well, it is being used. THE COURT: I understand that, but the main issue here is you're using their mark. 5 MS. CARUSO: Right. But that's not the only 6 factor in likelihood of confusion. 7 factors -- 8 THE COURT: 9 MS. CARUSO: 10 THE COURT: MS. CARUSO: I'd say it's pretty strong. And there's that one mark that that Rosetta Stone that's pretty strong. 15 THE COURT: 16 MS. CARUSO: 17 -- which include the strength Let's go ahead. 13 14 Right. of the mark. 11 12 There are other Right. They have other marks like audio companion. 18 THE COURT: 19 Rosetta Stone for now. 20 MS. CARUSO: I know. Let's just deal with Let's assume that it's strong. All right. All these other 21 complaints that exist out there, we don't have any 22 evidence about the strength of their marks. 23 24 25 THE COURT: So -- American Airlines, or Geico or -MS. CARUSO: For cases that actually 29 1 existed. So if you want me just to focus on litigation 2 versus any person's complaint to Google, then I'll do 3 that. 4 5 THE COURT: person. I'm talking about corporations. 6 MS. CARUSO: 7 THE COURT: 8 MS. CARUSO: 9 10 11 12 Well, I'm not talking about any proceedings. Any company's complaint -Right. -- versus an actual legal That's the distinction that I'm saying do you want me to -THE COURT: I'm sorry. I think they're all the same thing. 13 MS. CARUSO: 14 THE COURT: Okay. And I agree that there might be 15 some complaints by some companies that perhaps don't 16 have the same strength as Rosetta Stone or that, but 17 we're still talking about at least for discovery 18 purposes now and what we put into evidence at trial, but 19 we're still talking about what amounts to the same 20 issue, that a company complains that they used their 21 actual trademark. 22 MS. CARUSO: And, Your Honor, if you think 23 about that, think about every comparative advertisement 24 that exists, they all use the actual trademark. 25 they don't all turn out the same way. But 30 1 THE COURT: 2 MS. CARUSO: 3 Uh-huh. They're very different because it depends on the question of confusion. 4 THE COURT: 5 MS. CARUSO: And so -- Right, exactly. Take, for example, Time 6 Magazine has been sued in the past for running a 7 comparative ad that a company said infringed its 8 trademark. 9 ad, what happened in that first lawsuit is not relevant If it's sued again for running a different 10 to the second lawsuit. 11 THE COURT: 12 MS. CARUSO: Okay, I understand. I think it really is going to 13 open up, especially on the issue of expert reports. 14 experts that Google has in this case are not the experts 15 that it's had before. 16 cases are not the facts that we have here. 17 THE COURT: 18 MS. CARUSO: The The facts that it had in other Uh-huh. If we're going to bring those 19 experts reports in on damages, I don't see how, you 20 know, what American Airlines' usage was has anything to 21 do with what the usage is here in Rosetta Stone. 22 But also on the question of confusion, then 23 you really are inviting a whole new trial of those 24 issues that were never tried before. 25 THE COURT: Uh-huh. 31 1 MS. CARUSO: Rosetta Stone didn't bring this 2 case as a class action or seek to resurrect all those 3 past cases. It's just bringing this on its own behalf. 4 THE COURT: 5 MS. CARUSO: 6 THE COURT: 8 MS. CARUSO: 10 11 And, the volume of these documents is quite a lot. 7 9 Uh-huh. Okay. Given -- you know, if they want a stipulation that other people have complained about Google's trademark policy, Google will provide that. I don't see how having, you know, a stack of 12 complaints without all -- having full trials on all of 13 them to present to the jury how it is that all of those 14 aren't relevant either in addition to this one not 15 winding up with confusion. 16 THE COURT: It -- Well, that's interesting. Would 17 Google be willing to stipulate that it had X thousands 18 of complaints about its trademark policy and the way 19 it's used -- the same issue that Rosetta Stone is 20 complaining of? 21 Are you willing to stipulate to that? MS. CARUSO: Well, not right here, right now 22 for one reason because I don't know what the extent of 23 those numbers are because -- 24 THE COURT: 25 MS. CARUSO: Uh-huh. -- it's so burdensome to do. 32 1 We haven't undertaken it. 2 3 THE COURT: I wonder how many you'd be willing to stipulate to. 4 MS. CARUSO: For purposes of discovery, we 5 probably would be willing to stipulate to some number. 6 I should check with my client as to what they're 7 comfortable with on that. 8 THE COURT: 9 Did you have anything to add? 10 Okay. MS. SPAZIANO: Thank you. Just a couple of comments if 11 I might on the issue of expert reports and the other 12 litigation and why those documents would be relevant 13 here or other deposition transcripts. 14 Let's start with the 30(b)(6) deposition. 15 30(b)(6) deposition of Google in the American Airlines 16 case, I don't know if one took place because I don't 17 know what was there. 18 But if one did, Google testifying about the 19 practices that are on issue here, clearly relevant. 20 We're going to take a 30(b)(6) deposition of a Google 21 person. 22 the past about these same issues. 23 We're entitled to know what Google has said in The same thing goes for interrogatory 24 responses if they exist, request for admission which we 25 specifically asked for, damages expert reports which was 33 1 something that was specifically commented as can't see 2 how it could possibly be relevant. 3 Well, putting aside the separateness of the 4 mark, the damages that are recoverable in these cases 5 are very similar. 6 American Airlines case that damages should be A, B, C or 7 D and I don't mean the numbers, I mean -- And if Google's expert says in the 8 THE COURT: How their calculated, uh-huh. 9 MS. SPAZIANO: Or they should exclude X or 10 Y, and Google's expert here is taking a very different 11 position, we're entitled to know that. 12 interesting is you've got case after case that has been 13 settled as Your Honor noted. 14 settled, we're not entitled to see that information. 15 And Google in fact is able, therefore, to -- or 16 attempting to try to shelter, you know, that 17 discoverable information from us. 18 And what is And because it's been So, I -- I believe that all of that 19 information could be very relevant to the issues that 20 we're dealing with right here as we proceed down the 21 path of taking some of these depositions and dealing 22 with the experts. 23 As for the burden argument associated with 24 these documents because Google chooses to dump all of 25 its documents in a Trax system, that's not a basis to 34 1 say you don't get any of it. 2 And if that information is relevant to this 3 case and discoverable and we believe for all the reasons 4 we've talked about today and all the reasons Your Honor 5 has raised it is discoverable, you can't just say, well, 6 it's in a ten terabyte database and we can't get it. 7 And such an assertion coming from Google 8 which is the greatest search engine in the world is even 9 less -- less realistic. 10 THE COURT: Okay. 11 MS. SPAZIANO: So I just raise those points, 12 and I think that if this information is discoverable, 13 there are many ways to figure out how to get that 14 information without imposing undue burden. 15 And we all work through those issues on a 16 daily basis. 17 relevant and it won't be produced. 18 THE COURT: 19 I mean, as I said this is a really unique 20 sort of trademark infringement case, well, aside from 21 Geico and American Airlines. 22 But to date, we've been told it's not Okay, thank you very much. But normally the Court would be pretty 23 skeptical of requests relating to third party trademark 24 infringement. 25 issue in this case in terms of willfulness and intent. But I think to a great extent it's an 35 1 And some of the requests that I think relate to third 2 parties are discoverable, but not everything. 3 me just kind of go through this. 4 And let As for request number five, I think that 5 it's still too broad. If they're going to have to do a 6 search in the Trax system, again, I have to agree with 7 defendant's counsel that I don't even know how you go 8 about searching for that. 9 If you want to search the Trax system and 10 this actually holds true with regard to anything else 11 that I grant in your motion to compel, as far as -- 12 because you've already agreed to produce and you have 13 produced everything that's related to Rosetta Stone from 14 the Trax system. 15 wanted out of the Trax system, you're going to have to 16 pay for the search. 17 If there's anything else that you So if you want number five as you have 18 defined it orally here during argument, I don't have a 19 problem with that if the plaintiff pays for the search. 20 So you have to decide how much it's worth to you. 21 As to numbers 6 -- 6, 7, 10, 12, I'm going 22 to grant those as well. 23 burdensome enough to -- too burdensome, rather, to have 24 to produce any documents that aren't in the Trax system. 25 I think -- I don't think it's So I'm going to grant that, and I think it 36 1 is relevant as to 6, 7, 10 and 12. 2 As to 13, 14, and 15, as I said before, I 3 think settlement agreements are just so -- involve so 4 many factors. 5 relevant nor would it be admissible, and I'm going to 6 deny that. 7 I just don't think that it's going to be As to 18, 19, 20, 21, 22, 23, 26, 27, 28, 8 29, 67, 68, 69, 76, 77, 78, 79, 93, and 9 -- excuse me, 9 93 and then 106, I'm going to grant all of those. I'm 10 going to limit it to 2002, go back that far. 11 said, if it relates to the Trax system, I'm not going to 12 require them to search that any further. 13 everything else I think is reasonably related to 14 information here that might be relevant at trial. 15 I'm going to allow those. 16 And as I But, So As to request number 96, I'm not going to 17 allow the payments again for the same reason I'm not 18 going to allow the settlement agreement. 19 And as to request number 13, they've made a 20 representation they don't have such documents. 21 not going to grant the request with regard to that. 22 So I'm So basically, I'm granting everything except 23 for -- let's go over it again and make sure I've got it 24 correct, except for five. 25 denied. 14 is denied. Five is denied. 15 is denied. 13 is 96 is denied, and 37 1 113 is denied, except as I said to the extent that 2 plaintiff wants to pay to go to the Trax system. 3 Now -- 4 MS. CARUSO: 5 THE COURT: 6 MS. CARUSO: Your Honor -I'm sorry, go ahead. I wanted to just seek 7 clarification on one thing. 8 within them is a huge amount of attorney work product 9 information. 10 THE COURT: Those requests, encompassed Well, you're just going to have 11 to file a privilege log with regard to anything that you 12 claim is privilege. 13 privileged documents must be produced. 14 privilege log. 15 I'm not saying that non -- that MS. CARUSO: You have to do a Okay, but privilege log itself 16 is going to be pretty burdensome going back to 2002 to 17 collect those things. 18 19 20 THE COURT: I don't think a lot of this is privileged. MS. CARUSO: Well, one of these request all 21 analysis about, you know, considering removing anything, 22 all -- all communications relating to the presence or 23 absence of it, all documents relating to Google's 24 policies concerning which I think -- 25 THE COURT: Uh-huh. 38 1 MS. CARUSO: -- picks up literally every 2 single document relating to a lawsuit. 3 summary judgment briefs and, you know, it just is a 4 huge amount of -- 5 THE COURT: All right. And so drafts of Well, tell me which 6 ones specifically you're concerned about because I don't 7 mean it to be quite that far. 8 9 10 MS. CARUSO: them. You're talking about 18? 18 would definitely be one of 19 and 20 are basically the same except they changed "removing" to "limiting" and "prohibiting". 11 THE COURT: 12 MS. CARUSO: How many suits have you had? It's fewer than ten, but they 13 do go back for -- well, I shouldn't say fewer than ten. 14 I think that it's fewer than ten. 15 quite some time. 16 But they go back And, you know, it -- finding these -- sort 17 of tracking down the privileged information in order to 18 log it is going to be a -- quite an undertaking given 19 the amount of time that has passed in the past eight 20 years for all of these things that are theoretically 21 responsive. 22 So if, Your Honor, you could limit it to 23 anything that was exchanged, production with counsel or 24 filed with Court or depositions -- 25 THE COURT: I don't think we can do that 39 1 because, I mean, it may be privileged; it may not. 2 Well, let's see. Number 18 says -- all 3 right. I see what you're saying. 4 to a lawsuit that if it was not privileged -- I mean, 5 well certainly, if you'd communicated to somebody else 6 that -- to the other party that it would not be 7 privileged. 8 MS. CARUSO: 9 THE COURT: I guess if it related Right. If you did not communicate it, 10 then I'm assuming that at some point a privilege issue 11 would have come up with regard to those documents, that 12 they would have been privileged to begin with. 13 Wouldn't you agree? 14 MS. SPAZIANO: May I speak to this? One 15 thing we have talked about is trying to reach an 16 agreement and not logging the documents that are clearly 17 privileged. 18 consideration. 19 that would, you know, not require us to log things that 20 are clearly privileged -- And it's one thing that's under We sent a proposal to Google's counsel 21 THE COURT: 22 MS. SPAZIANO: 23 24 25 Right. -- such as to, you know, client seeking legal advice or conveying legal advice. And so we're happy to work through that. have got a proposal on the table. We My concern about the 40 1 concern raised by counsel is she said that it would be 2 very burdensome to go back and try to find all of those 3 things that are privileged. 4 And what worries me is that if you say you 5 don't have to log any of those things, and they don't go 6 out and search for those things, they may miss things 7 that are not privileged and responsive. 8 And so I'm happy to work on minimizing the 9 burden of the privileged log because we're not going to 10 come to in and fight over draft summary judgment briefs 11 and whether or not they should be produced. 12 But I think that the burden to search for 13 the documents needs to exist. 14 that we're happy to work through. 15 THE COURT: The logging is something Well, let me ask you something. 16 I mean wouldn't most -- I mean, Google doesn't usually 17 represent itself. It has outside counsel, correct? 18 MS. SPAZIANO: 19 THE COURT: Yes. So, most of what you're 20 concerned about would be in the possession of outside 21 counsel, would it not, not inhouse? 22 MS. CARUSO: Except to the extent that 23 drafts were sent to inside counsel and e-mails were 24 exchanged with inside counsel which I believe happens 25 fairly frequently. 41 1 THE COURT: Well, what if -- I mean, what if 2 we accepted anything that was -- you know, I don't know 3 how you're going to do this, though. 4 What I'm wondering about is general reviews 5 and analysis rather than ones that are specific to 6 litigation with regard to 18, 19, and 20, and 21, 22. 7 MS. CARUSO: Your Honor, with respect to 8 general ones that are not specific given litigation, 9 we've already agreed to produce those. 10 THE COURT: Because when I was looking at 11 those, I was really thinking of general studies not 12 specific to certain litigation. 13 MS. CARUSO: Right, and we agreed that 14 that's relevant, general studies, and that's why we have 15 agreed to produce them. 16 THE COURT: Okay, but I am letting them 17 have -- okay, so why do you think that that would -- let 18 me ask plaintiff's counsel again why -- I understand 19 that you think that there might be something in there. 20 But if they're agreeing to give you the general ones and 21 if they're agreeing to give you the specific documents 22 that you asked for with regard to American Airlines 23 and -- let's see, contrast for somebody else as well. 24 But you asked specifically -- 25 MS. CARUSO: Asked specifically for -- 42 1 MS. SPAZIANO: About American Airlines, and 2 that's part of the issue, we don't know what other 3 litigation out there exists or what other resolutions 4 existed before matters went to litigation. 5 exactly the issue. 6 And that's To the extent that there were communications 7 like those that were provided in the American Airlines 8 litigation that exist with respect to matters that 9 didn't need litigation, they're likely to have the same 10 11 kind of -THE COURT: You've got the American 12 Airlines, though, already. 13 I mean I'm telling them to produce it. 14 anything on that. 15 MS. SPAZIANO: 16 THE COURT: 17 I mean, you don't have that. You don't have Right. We're going to have to take this one step at a time I think. 18 MS. SPAZIANO: 19 THE COURT: Sure. You're going to have to produce 20 the American Airlines as I ordered. 21 think that was only one that was a specific suit. 22 Okay. And I think you Then, as far as 18, 19, 20, 21, I'm 23 going to -- and 22, and 23, then I'll relate that to 24 just general analysis and policies and so forth, not 25 specific to specific litigation. 43 1 2 MS. SPAZIANO: Can I ask for one clarification for that? 3 THE COURT: Uh-huh. 4 MS. SPAZIANO: If there's a litigation or 5 you know, say like pick Geico because Geico wasn't 6 specifically mentioned here where there was a general 7 analysis and an expert report, is that something that is 8 being produced or is that being excluded from production 9 because it was general analysis in the context of a 10 11 specific litigation? That's really what -- THE COURT: What I'm asking them -- what I'm 12 telling them to do is to not have to look into specific 13 litigation files. 14 MS. SPAZIANO: 15 THE COURT: Uh-huh. That they're going to have -- I 16 mean if they have a general analysis that -- or review 17 that they conducted and perhaps it was sparked by a 18 suit, that's fine. 19 process then they don't have to produce it. 20 But if it's not part of a litigation Now, what I think should happen is, you 21 should get the American Airlines stuff. 22 think that there may be additional specific documents 23 that you might need from another specific suit, then 24 maybe address that. 25 And if you But I don't think -- you know, and come back 44 1 and ask me about that. 2 that they go through what I'm sure are boxes and boxes 3 of litigation files. 4 But I don't think I can require MS. SPAZIANO: Understood. Would it be 5 possible for them to create a list of those litigation 6 matters or those challenges that didn't result in 7 litigation so we could know what exists that we're not 8 getting so that we could come to you -- 9 THE COURT: You're saying they're list than 10 ten? 11 that what you're asking me? 12 public -- 13 14 You just want to know the names of the suits? MS. SPAZIANO: Is They're a matter of Well, to the extent that they're public, we're aware of them. 15 THE COURT: Right. 16 MS. SPAZIANO: But to the extent that there 17 are litigation files before a matter goes to litigation, 18 I mean, there could very well be and likely are 19 situations where somebody threatened litigation, and it 20 was resolved in light -- 21 THE COURT: Well, I doubt that any of that 22 analysis is in there if it never even went to trial, if 23 it never even went to suit. 24 MS. SPAZIANO: 25 how those negotiations -- It would certainly depend on 45 1 THE COURT: 2 little too deep there. 3 to just general analysis and reviews and then deal with 4 the American Airlines and we'll go from there, okay. 5 Right. I think we're digging a I'm going to limit it as I said Now, as to producing these documents, when 6 is Google going to be able to produce them? 7 be able to produce everything up to now already because 8 you said you were going to do that by February -- excuse 9 me, January 29th or something. 10 MS. CARUSO: That was our intent. You should There are 11 a few stragglers out there. 12 correction there have been more requests served on us, 13 so fewer I think that 200 documents outstanding for us 14 to produce from what we'd already agreed to. 15 Only since making that As far as when we can produce these, I 16 frankly don't know. 17 work to get it done as quickly as possible. 18 searching for all of this could take some time, so I 19 just think that -- 20 21 22 23 24 25 I can represent that Google will THE COURT: But, What do you think about by the 19th, a little over two weeks? MS. CARUSO: We will certainly attempt to do that and make every effort. THE COURT: All right. Then I'll assume that you're going to produce them by February 19th and 46 1 I'll extend discovery a little bit then to deal with 2 that. 3 I'm going to keep the final pretrial 4 conference on for February 18th. 5 and pick a trial date, okay. 6 You'll have to just go And then what I'll do is give you until -- 7 how about then until, assuming they produced everything 8 which I'm -- which I'm strongly encouraging you to 9 comply with, then let's have the close of discovery by 10 11 March 12th, all right. Then you can exchange your pretrial 12 submissions by the 24th with objections to the pretrial 13 submissions by the 31st. 14 15 MS. SPAZIANO: May I ask one question about the Court's ruling with respect to the Trax system? 16 THE COURT: Uh-huh. 17 MS. SPAZIANO: I think your ruling suggested 18 that if we want the Trax system to be searched, we'd 19 have to pay for the search and my question -- 20 THE COURT: 21 searched for. 22 Beyond what they've already Rosetta Stone searches. 23 As I understand they've been all for MS. SPAZIANO: Understood completely. 24 Would -- does your order contemplate that we would be 25 preparing the search that would be done based on the 47 1 requests that are at issue here such that we can try to 2 narrow the scope of that and the cost associated with 3 that? 4 THE COURT: Yes, you can do that. You can 5 narrow it, and I'd like you all to communicate back and 6 forth. 7 search -- And if you want to pay for a limited Trax 8 MS. SPAZIANO: Uh-huh. 9 THE COURT: -- then that's all right. 10 MS. SPAZIANO: 11 THE COURT: 12 Is there anything else that we need to deal 13 with? Understood. Thank you. Okay, all right. No. 14 Okay, thank you. 15 (Proceeding concluded at 2:51 p.m.) 16 17 18 19 20 21 22 23 24 25 Court's adjourned. 48 1 CERTIFICATE OF TRANSCRIPTION 2 3 I, Renecia Wilson, hereby certify that the 4 foregoing is a true and accurate transcript that was 5 typed by me from the recording provided by the court. 6 Any errors or omissions are due to the inability of the 7 undersigned to hear or understand said recording. 8 Further, that I am neither counsel for, related to, nor 9 employed by any of the parties to the above-styled 10 action, and that I am not financially or otherwise 11 interested in the outcome of the above-styled action. 12 13 IN WITNESS WHEREOF, I have hereto subscribed my name this 18th day of February, 2010. 14 15 16 17 18 19 20 21 22 23 24 25 /s/ Renecia Wilson, RMR, CRR Official Court Reporter

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