Fourth Circuit Revives Rosetta Stone's Claims Against Google Over Its AdWords Program

In a closely-watched battle, the Fourth Circuit brought life back into Rosetta Stone's trademark infringement and dilution claims against Google stemming from its AdWords program. In 2010, the Eastern District of Virginia ruled overwhelmingly in favor of Google on summary judgment finding that it did not infringe Rosetta Stone's trademark or dilute the value of its marks by allowing others to purchase the "ROSETTA STONE" mark in its AdWords Program. On Monday, April 9, 2012, the Fourth Circuit vacated the district court's order with respect to direct trademark infringement, contributory infringement and dilution claims. Although the Fourth Circuit has resuscitated Rosetta Stone's claims against Google, the battle is far from over. The case is now remanded to the trial court for further proceedings where the parties will continue to wage war over keyword advertising. Click here for Venable's blog post on this case and continue reading for a detailed discussion of the case.

Google's AdWords Accused of Trademark Infringement

Google's AdWords program allows advertisers to purchase "keywords" that launch the advertiser's ads when the keyword is entered as a search term in Google. In 2004, Google changed its AdWords policy to allow the use of trademarks as search triggers even over the objection of the trademark owner. Later Google introduced a tool that suggested relevant trademarks for advertisers to bid on as keywords. In 2009, Google loosened its policy further by permitting limited use of trademarks in the title or text of advertisements for resellers of trademarked products, makers or sellers of component parts for trademark products, sellers of compatible goods for use with a trademarked product or reviewers of trademarked products. Rosetta Stone filed a complaint against Google in 2009 alleging that Google's policies created a likelihood of confusion, as well as actual confusion, leading Internet users into buying counterfeit ROSETTA STONE products. The district court ruled in favor of Google on all counts in 2010, but the appellate court reversed the decision on three key claims.

Trademark Infringement Claim Reinstated

With respect to the first claim for direct trademark infringement, the appellate court determined that there were still issues of material fact with respect to whether or not Google's use of the ROSETTA STONE mark was likely to cause confusion among consumers. Specifically, the appellate court reasoned that there were...