Fourth Circuit Offers Google Some Unfavorable “Keywords” in Rosetta Stone’s Trademark Appeal

Rosetta Stone's trademark/keyword lawsuit against Google was given new life today when the Fourth Circuit vacated in part an order granting Google summary judgment. Rosetta Stone v. Google, Inc., 2012 U.S. App. LEXIS 7082 (4th Cir. 2012) [enhanced version available to lexis.com subscribers]. Though Rosetta Stone's vicarious infringement and unjust enrichment claims did not survive, the court vacated the Eastern District of Virginia's summary judgment order with respect to direct infringement, contributory infringement and trademark dilution.

In filing suit, Rosetta Stone argued that Google's policies concerning the use of trademarks as keywords and in ad text created not only a likelihood of confusion but also actual confusion as well, misleading Internet users into purchasing counterfeit Rosetta Stone software. Rosetta Stone also alleged that it had been plagued with counterfeiters since Google changed its policy to permit the limited use of trademarks in advertising text.

In Rosetta Stone Ltd. v. Google Inc., 2010 U.S. Dist. LEXIS 78098 (E.D. Va. 2010) [enhanced version available to lexis.com subscribers], the district court entered summary judgment against Rosetta Stone on its direct trademark infringement claim, concluding that: (A) there was not a genuine issue of fact as to whether Google's use of Rosetta Stone created a likelihood of confusion; and (B) the "functionality doctrine" shielded Google from liability in any event. The Fourth Circuit concluded that neither ground could sustain the summary judgment order and remanded for further proceedings.

As for the contributory infringement claim, Rosetta Stone argued that the district court misapplied the standard of review and incorrectly awarded summary judgment to Google. The Fourth Circuit agreed, holding:

In granting summary judgment to Google because "Rosetta Stone has not met the burden of showing that summary judgment is proper as to its contributory trademark infringement claim," the district court turned the summary judgment standard on its head. While it may very well be that Rosetta Stone was not entitled to summary judgment, that issue is not before us. The only question in this appeal is whether, viewing the evidence and drawing all reasonable inferences from that evidence in a light most favorable to Rosetta Stone, a reasonable trier of fact could find in favor of Rosetta Stone, the nonmoving party. ... We conclude that the evidence recited by the district court is sufficient to establish a question of fact as to whether Google continued to supply its services to known infringers.

Finally, Rosetta Stone successfully challenged the summary judgment order as to the trademark dilution claim. The district court had held that summary judgment was proper because Rosetta Stone failed: 1) to present evidence that Google was using the Rosetta Stone marks to identify its own goods and services; and 2) to show that Google's use of the mark was likely to impair the distinctiveness of or harm the reputation of the Rosetta Stone marks. 

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