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GOOGLE ADWORDS WINS AND EXPANDS JURISDICTION REPORT: US —TRADEMARKS


Robert J. Kenney and Katherine A. Melvin Birch, Stewart, Kolasch & Birch, LLP


In the past week, trademark owners have suffered two set-backs in the fight against infringing uses of their marks on the Internet—one in Europe and one in the US. Google announced on August 4 that it will expand its AdWords program in Europe to allow the purchase of third-party trademarks for use as keyword triggers for ‘Sponsored Link’ advertisements. Tis expansion will go into effect on September 14, 2010, and will bring the European policy in line with that already in place in the US, Canada, the UK and elsewhere. Google continues to expand its AdWords program as it receives legal cover in a particular region—in this case from the European Court of Justice’s March decision against Louis Vuitton. More troublesome for trademark owners is that this announcement comes on the heels of the Eastern District of Virginia’s opinion issued on August 3 in connection with the April dismissal of Rosetta Stone’s case against Google.


Rosetta Stone brought the case against Google in July 2009, challenging the sale of Rosetta Stone’s trademarks for use as keyword triggers for Sponsored Links and use of Rosetta Stone’s marks in the title or text of those paid advertisements. Rosetta Stone argued that Google was liable under theories of direct and indirect infringement, dilution and unfair competition by actively assisting third-party advertisers in misleading consumers and misappropriating Rosetta Stone’s marks.


Te court granted summary judgment in favour of Google on each of the counts at issue, which included Rosetta Stone’s four federal claims as well as its claim for trademark infringement and unfair competition under Virginia law (a separate opinion delivered on August 2, 2010 dealt with Rosetta Stone’s claim of unjust enrichment under Virginia law, which was also decided in favour of Google). Te opinion holds that no likelihood of confusion as to the source or origin of goods or services results from the use of third-party trademarks as keywords or in the title or text of sponsored advertisements on Google’s search listings.


Specifically at issue was Google’s intent, whether there was actual confusion caused by the use of Rosetta Stone’s marks as keywords and what level of consumer sophistication exists when consumers view Google search results. Te court determined that there was no intent as Google was not trying to pass its goods or services off as those of Rosetta Stone. It further emphasised that “intent to profit” is not the same as “intent to confuse”, and therefore Google’s increased revenue from the sale of third-party trademarks is insufficient evidence of intent. Te evidence of actual confusion was dismissed as de minimus or unsupported by the record, and the focus on potential consumers of Rosetta Stone products suggested that they had the expertise and sophistication to distinguish between organic and sponsored links.


“ THE COURT HELD THAT ROSETTA STONE’S BRAND AWARENESS HAD IN FACT INCREASED AS A RESULT OF GOOGLE’S POLICY OF ALLOWING THE USE OF ITS MARKS AS KEYWORDS; THEREFORE, NO ECONOMIC LOSS FROM ITS DECLINING BRAND COULD BE ATTRIBUTED TO GOOGLE.”


Google also escaped a finding of liability for dilution, because it does not sell language learning soſtware. Moreover, the court held that Rosetta Stone’s brand awareness had in fact increased as a result of Google’s policy of allowing the use of its marks as keywords; therefore, no economic loss from its declining brand could be attributed to Google.


Te case may yet be appealed to the Fourth Circuit; however, it joins a growing line of cases in which search engine providers have not been found liable based on the sale of a third-party trademark as a keyword trigger or use of a mark in the title or text of an ad provided by the advertiser. Te Eastern District of Virginia’s two opinions are perhaps the most detrimental to trademark owners so far, due to the manner in which they describe the services provided by Google under the AdWords program, namely: that Google’s use of third-party trademarks is “functional and non-infringing”; that its own “success depends on its users finding relevant responses” (precluding a finding of intent); and, from the August 2 opinion, that Google’s involvement in the selection process for keywords is limited to “exercis[ing] editorial discretion”.


Unable to prevent the purchase of infringing advertisements from search engine providers under traditional theories, trademark owners must continue to go aſter individual infringers in sponsored listings as they do for infringing “organic” listings and make specific requests that sponsored listings selling counterfeit goods be removed.


Robert Kenney is a partner at Birch, Stewart, Kolasch & Birch, LLP. He can be contacted at: rjk@bskb.com


Katherine Melvin is an associate at Birch, Stewart, Kolasch & Birch, LLP. She can be contacted at: kmelvin@bskb.com


100 World Intellectual Property Review September/October 2010 www.worldipreview.com


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