Rosetta Stone Ltd. v. Google, Inc. - 676 F.3d 144 (4th Cir. 2012)

Rule:

The United States Court of Appeals for the Fourth Circuit has articulated at least nine factors that generally are relevant to the likelihood of confusion inquiry: (1) the strength or distinctiveness of the plaintiff's mark as actually used in the marketplace; (2) the similarity of the two marks to consumers; (3) the similarity of the goods or services that the marks identify; (4) the similarity of the facilities used by the markholders; (5) the similarity of advertising used by the markholders; (6) the defendant's intent; (7) actual confusion; (8) the quality of the defendant's product; and (9) the sophistication of the consuming public.

Facts:

Plaintiff Rosetta Stone Ltd. was a leading company in its field (language learning). When defendant, Google Inc., allowed other advertisers to use plaintiff's trademarks as "key words" for Internet searches and in ad text, plaintiff filed the instant action, asserting clams for direct, contributory, and vicarious trademark infringement; dilution; and unjust enrichment. Plaintiff contended that defendant’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. Moreover, plaintiff alleged that it has been plagued with counterfeiters since defendant announced its policy shift in 2009. The United States District Court for the Eastern District of Virginia, at Alexandria granted defendant’s motion for summary judgment on all claims and dismissed the unjust enrichment claim. Plaintiff appealed.

Issue:

Did the district court err in granting summary judgment in favor of the defendant with respect to the likelihood of confusion issue? 

Answer:

Yes.

Conclusion:

Inter alia, the appellate court held that, while failure to consider all nine of the traditional likelihood-of-confusion factors was not error, in addressing the remaining disputed factors, the district court did not properly apply the summary judgment standard of review but instead viewed the evidence much as it would during a bench trial. A reasonable trier of fact could find that defendant intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks, there was no basis for dismissing anecdotal testimony of actual confusion from five customers, and it would have been reasonable to infer that a great number of the complaints to plaintiff's customer care center were from individuals confused by defendant's use of the trademarks. Evidence of a survey report conducted by an expert in market analysis and consumer behavior also should have been added to the other evidence of actual confusion. Accordingly, the appellate court affirmed the district court's order with respect to the vicarious infringement and unjust enrichment claims, but vacated the district court's order with respect to the direct infringement, contributory infringement and dilution claims and remanded these claims for further proceedings.