More than three dozen technology and consumer products companies and trade groups have piled on as amici to a trademark fight between Rosetta Stone Ltd. and Google Inc. in a case that observers hope will settle some thorny questions about Web searches.
In Rosetta Stone Ltd. v. Google Inc., the language software company is asking the U.S. Court of Appeals for the 4th Circuit to overturn an Eastern District of Virginia ruling in favor of search-engine giant Google. Rosetta Stone wants the court to rule that Google’s keyword advertising practices — which allow advertisers to use other companies’ trademarks to trigger advertisements in Web searches — violate trademark law in several ways.
The amici, which have mostly filed briefs in groups, tackle different issues raised by District Judge Gerald Bruce Lee in his Aug. 3 summary judgment ruling for Google. One key issue is whether the lower court correctly applied the legal tests used by most circuits that determine whether Google’s practices created a “likelihood of confusion” for consumers.
Another is whether Google’s use of Rosetta Stone’s trademark, even if it created a likelihood of confusion, is noninfringing because it has a legitimate function — producing sponsored links. The functionality doctrine bars the use of trademark law to monopolize the physical features of a product. A 1995 U.S. Supreme Court case, Qualitex Co. v. Jacobson Products Co., held that such a monopoly is the province of patent law, not trademark law.
Yet another question is whether Google’s practices constitute trademark dilution, because they diminish Rosetta Stone’s unique trademark by allowing advertisers to use it. Also up for debate is whether Google’s actions constitute contributory trademark infringement, which involves either intentionally inducing a third party to infringe or supplying products to a third party it knows, or should know, is involved in trademark infringement.
To date, 32 amici support Rosetta Stone. These include consumer product heavyweights such as Coach Inc., Ford Motor Co. and Tiffany & Co and technology companies such as TiVo Inc. and Viacom Inc.
Even the International Trademark Association (INTA), which counts both litigants as members, has weighed in. The trade group is one of three that filed briefs on the legal issues without expressly choosing a side. INTA’s brief emphasizes that it has no position on whether Rosetta Stone has a valid claim against Google. It is, however, supporting Rosetta Stone’s efforts to get the lower court’s ruling vacated “because the district court misstated and misapplied settled trademark law.”
The case is critically important to brand owners because “it’s going to give us our first really good look from a circuit court as to how these issues should be thought about,” said David Bernstein, a litigation partner in the intellectual property group at New York-based Debevoise & Plimpton and INTA’s counsel of record for the matter and co-author of the brief.
“INTA felt it was important to put its views on the record because the [district court's] errors threaten to affect how these cases are resolved,” Bernstein said.
Google also has a few heavyweights in its corner. Yahoo! Inc. and eBay Inc. teamed up on one brief, while Public Knowledge and the Electronic Freedom Foundation banded together on a second.
Google’s law firm for the appeal is Quinn Emanuel Urquhart & Sullivan of Los Angeles. Skadden, Arps, Slate, Meagher & Flom of New York is representing Rosetta Stone. Neither Google nor Rosetta Stone, nor its lawyers, would speak on the record, but the amici are vocal about what’s at stake in the case.
‘A RADICAL REINTERPRETATION’
INTA’s brief called the district court’s holding “a radical reinterpretation of the functionality doctrine.” The court held that Google’s actions do not infringe the Rosetta Stone mark because they serve a useful or functional role.
“That’s one area we think needs to be clarified and fixed so we don’t have other courts think it’s an appropriate way to think about these practices,” Bernstein said. “We make the point that the right way to think about these issues is whether they’re a fair use.”
INTA also thinks the district court wrongly interpreted the Trademark Dilution Revision Act. Lee found that Google hadn’t diluted Rosetta Stone’s trademark because it doesn’t sell competing language software, and it’s not using Rosetta Stone’s trademarks to identify its own goods and services.
Under the 2006 statute, it is clear that trademarks don’t need to be used by a competing company for a showing of dilution harm, Bernstein said. “If I open a garbage [collection] company and I call it Microsoft, that would tend to dilute the distinctiveness of the Microsoft brand,” Bernstein said. “The district court got it wrong.” How courts apply the relatively new dilution standard has implications far beyond keyword issues, he said. “It’s an opportunity for a circuit court to provide more clarity to district judges as to when dilution should be applied,” Bernstein said.
Groups of companies are also banding together to fight for Rosetta Stone’s positions, including five small and midsize companies led by medical technology company ConvaTec Inc. The lower court decision was “so overbroad” that it gave brand owners and the trademark community a bit of shock, said the group’s amicus lawyer, Brad Newberg, a Falls Church, Va., intellectual property partner at Reed Smith. “The district court went way overboard by saying, even if Google’s actions were to cause confusion, that Google would still have full immunity because the court said trademarks were simply functional to Google’s business model,” Newberg said.
The other companies on the brief are contact lens retailer 1-800 Contacts Inc.; Guru Denim Inc., which owns the True Religion jeans trademark; audio and video component maker Monster Cable Products Inc.; and pet pharmacy PetMed Express Inc.
The ConvaTec group is also incensed that the lower court did not balance six of the nine factors courts generally apply when determining consumers’ likelihood of confusion; the court ruled they were not in dispute. Two of these are the trademark’s strength and the quality of the infringing product. Four factors are based on analysis, including comparisons of the actual trademark and allegedly infringing mark; the goods and services identified by the marks; the facilities used; and the advertising.
Aside from ignoring six factors, the ConvaTec group believes the district court erroneously analyzed the three remaining factors: actual confusion, the sophistication of the consumers and Google’s intent. The lower court turned a blind eye to Google’s economic incentive, Newberg said. The company’s keyword advertising policies force legitimate trademark owners to pay exorbitant rates for a top ranking on Google searches, he said. They must outspend counterfeiters and infringers using their trademarks to trigger other ads.
The district court also overstepped the mark on its contributory-infringement ruling, Newberg said. Although Google would eventually take down infringers’ advertisements when a trademark owner complained, “it would allow the same infringer to put a new infringing advertisement right back up.” At the very least, the question should have gone to a jury, Newberg said. “We just feel that the district court, in its efforts to express how much it enjoyed Google’s business model, went too far in giving Google carte blanche to do whatever it wanted with these trademarks,” Newberg said.
Shulman Rogers Gandal Pordy & Ecker also has clients that are “spending an unwarranted amount of money to try to outbid all the sponsored advertisers,” said Karl Means, who leads the intellectual property practice group at the Potomac, Md.-based firm. Means’ firm represents amicus Volunteers of America Inc., which supports Rosetta Stone and filed a brief focusing on the district court’s treatment of the likelihood-of-confusion factors. “If Google succeeds, then they’ll be allowed to continue doing what they’re doing to the detriment of all companies that have trademarks,” Means said.
OWNERSHIP OF WORDS
Trademark law “doesn’t give companies ownership of words,” said John Bergmayer, a staff attorney at Public Knowledge, a nonprofit advocacy group focused on defending users’ digital rights and one of the amici supporting Google’s position. Trademark protection doesn’t allow owners to “control the reproduction of the words in any circumstance.”
“Rosetta Stone doesn’t own the eyeballs of all the people who type ‘Rosetta Stone’ into a search engine,” Bergmayer said. “[The company wants] to use trademark law to protect [itself] from competition, not simply fraud.”
In its brief, Google argues that Rosetta Stone’s direct liability case is based on a theory the 4th Circuit “has never adopted,” which is “initial interest confusion — the notion that consumers were confused by their first encounters with the advertisers’ links appearing on Google’s search pages. Google also claims that Rosetta Stone’s evidence that consumers experienced actual confusion was flawed.
Google further argues that the district court “properly held that the record lacks evidence that Google induced trademark infringement, continued to allow ads for counterfeit products after receiving notice of their counterfeit nature, or acted in concert with any infringers.”
The questions have been percolating in the courts in recent years, but there’s not a lot of clarity, said Bernstein, INTA’s amicus attorney. That’s because Google has faced and settled several similar lawsuits. For example, a 2009 2d Circuit ruling in Rescuecom Corp. v. Google Inc. provided few answers. The 2d Circuit found that Google’s keyword advertising practices were a “use in commerce” under the Lanham Act and remanded the case. The parties eventually settled.
“It’s now clear that the trademark laws reach keyword advertising practices, but we don’t have any courts that address what the standards should be,” Bernstein said.
Sheri Qualters can be contacted at firstname.lastname@example.org.