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<b><i>Online Exclusive:</i></b> Google Opts to Make a Deal in AdWords Spat with Rosetta Stone

By Jan Wolfe
November 02, 2012

Google Inc. has given up the fight in a closely-watched case accusing the company of infringing trademarks and facilitating the sale of counterfeit goods.

The Arlington, VA-based language software company Rosetta Stone Inc. agreed on Oct. 31 to drop claims that its trademarks were infringed by Google's system for generating online ads based on Internet searches. While the terms of the settlement are confidential, the companies said in a joint statement that they will now “work together to help law enforcement officials around the world go after counterfeiters at the source.” (See the press release from Rosetta Stone here.)

The suit challenged fundamental features of Google's most profitable product, AdWords, which generates online ads based on Internet search terms. Online advertisers pay Google to generate “sponsored links” to their products when users search certain keywords. But according to Rosetta Stone, Google crossed legal boundaries when it sold trademarked keywords like “Rosetta Stone,” “language library,” and “global traveller” to third-party advertisers — including companies hoping to capitalize on Rosetta Stone's marks to sell counterfeit software.

Rosetta and its original lawyers at Gibson, Dunn & Crutcher sued Google in U.S. district court in Alexandria, VA, in 2009, alleging trademark infringement, trademark dilution, and unjust enrichment. Rosetta Stone later swapped Gibson Dunn for a team from Skadden, Arps, Slate, Meagher & Flom.

U.S. Distirct Judge Gerald Lee sided with Google and its lawyers at Quinn Emanuel Urquhart & Sullivan in 2010, ruling on summary judgment that “no reasonable trier of fact could find that Google's practice of auctioning Rosetta Stone's trademarks as keyword triggers to third party advertisers creates a likelihood to confusion as to the source and origin of Rosetta Stone's products.”

Rosetta Stone's lawyers at Skadden appealed to the U.S. Court of Appeals for the Fourth Circuit. Web companies like eBay Inc. and Yahoo! Inc. penned amicus briefs supporting Google, while the International Trademark Association and companies like Ford Motor Company and Carfax, Inc. supported Rosetta Stone. In April 2012 the U.S. Court of Appeals for the Fourth Circuit partially reversed Lee and remanded the case, pointing out that Google's own witnesses had trouble distinguishing between Rosetta Stone's ads and the ads Google generated for its competitors. (See, “Fourth Circuit Speaks Rosetta Stone's Language in Google Suit,” National Law Journal, April 9, 2012.)

Jan Wolfe writes for The Litigation Daily, an ALM affiliate of Internet Law & Strategy.

Google Inc. has given up the fight in a closely-watched case accusing the company of infringing trademarks and facilitating the sale of counterfeit goods.

The Arlington, VA-based language software company Rosetta Stone Inc. agreed on Oct. 31 to drop claims that its trademarks were infringed by Google's system for generating online ads based on Internet searches. While the terms of the settlement are confidential, the companies said in a joint statement that they will now “work together to help law enforcement officials around the world go after counterfeiters at the source.” (See the press release from Rosetta Stone here.)

The suit challenged fundamental features of Google's most profitable product, AdWords, which generates online ads based on Internet search terms. Online advertisers pay Google to generate “sponsored links” to their products when users search certain keywords. But according to Rosetta Stone, Google crossed legal boundaries when it sold trademarked keywords like “Rosetta Stone,” “language library,” and “global traveller” to third-party advertisers — including companies hoping to capitalize on Rosetta Stone's marks to sell counterfeit software.

Rosetta and its original lawyers at Gibson, Dunn & Crutcher sued Google in U.S. district court in Alexandria, VA, in 2009, alleging trademark infringement, trademark dilution, and unjust enrichment. Rosetta Stone later swapped Gibson Dunn for a team from Skadden, Arps, Slate, Meagher & Flom.

U.S. Distirct Judge Gerald Lee sided with Google and its lawyers at Quinn Emanuel Urquhart & Sullivan in 2010, ruling on summary judgment that “no reasonable trier of fact could find that Google's practice of auctioning Rosetta Stone's trademarks as keyword triggers to third party advertisers creates a likelihood to confusion as to the source and origin of Rosetta Stone's products.”

Rosetta Stone's lawyers at Skadden appealed to the U.S. Court of Appeals for the Fourth Circuit. Web companies like eBay Inc. and Yahoo! Inc. penned amicus briefs supporting Google, while the International Trademark Association and companies like Ford Motor Company and Carfax, Inc. supported Rosetta Stone. In April 2012 the U.S. Court of Appeals for the Fourth Circuit partially reversed Lee and remanded the case, pointing out that Google's own witnesses had trouble distinguishing between Rosetta Stone's ads and the ads Google generated for its competitors. (See, “Fourth Circuit Speaks Rosetta Stone's Language in Google Suit,” National Law Journal, April 9, 2012.)

Jan Wolfe writes for The Litigation Daily, an ALM affiliate of Internet Law & Strategy.

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