ROSETTA STONE
‘likelihood of confusion’ analysis should be used to determine whether the use of a third party’s trademark as a keyword for sponsored advertising constitutes trademark infringement.
Generally, the courts have held that not all of the likelihood of confusion factors are applicable in keyword advertising cases. In Network Automation v Advanced Systems Concepts, the Ninth Circuit instructed that “[i]n the keyword advertising context the ‘likelihood of confusion’ will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context”, and held that the most relevant factors were: “(1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labelling and appearance of the advertisements and the surrounding context on the screen displaying the results page”.
Another recent decision to address this issue directly is the case Hearts on Fire v Blue Nile. In Hearts on Fire, the district court of Massachusetts analysed the likelihood
of
confusion prong through the doctrine of “initial interest confusion” and therefore established that likelihood of confusion would “ultimately turn on what the consumer saw on the screen and reasonably believed, given the context”.
In Rosetta Stone I, the parties did not dispute all of the Fourth Circuit’s previous Pizzeria Uno likelihood of confusion factors. Terefore the Eastern district of Virginia limited its query to the following factors, namely: “(1) defendant’s intent; (2) actual confusion; and (3) the consuming public’s sophistication”.
On appeal, however, Rosetta Stone argued that the district court’s decision to limit its likelihood of confusion analysis to these three factors
constituted reversible error, arguing
that the district court should have analysed the remaining factors because of their relevance to the issue of likelihood of confusion. Te Fourth Circuit disagreed and held that, depending on the context, not all the likelihood of confusion factors were relevant, reasoning that in the context of a referential or nominative type of use,
38 the application of the traditional multi-factor
test is difficult because many of the factors “are either unworkable or not suited or helpful as indicators of confusion in this context”. However, the Fourth Circuit held that the district court erred by failing to properly apply the standard for summary judgment to the evidence. At summary judgment, the evidence should have been inferred in a light favourable to Rosetta Stone, not Google.
Functional use
One of the defences that has been raised in keyword advertising cases is that use of the plaintiff’s
trademark does not constitute
trademark infringement and merely constitutes a functional use of the trademark.
Trademarks Brands and the Internet Volume 1, Issue 2
“A CRITICAL LEGAL ISSUE IS WHETHER USE OF A TRADEMARK AS A KEYWORD FOR SPONSORED LINKS CONSTITUTES A ‘USE IN COMMERCE’ SUFFICIENT TO IMPOSE LIABILITY FOR TRADEMARK INFRINGEMENT.”
For example, in the Ninth Circuit case Playboy Enterprises, Inc (PEI) v Netscape Commc’ns Corp, defendants required adult-oriented websites to link their advertisements to certain keywords, among which were the plaintiff’s trademarks ‘Playboy’ and ‘Playmate’. However, the defendants in that case asserted that they were merely making a functional use of the plaintiff’s marks. Te Ninth Circuit rejected the functionality defence on the grounds that “[n] othing about the marks used to identify PEI’s products is a functional part of the design of those products”, and “[t]he fact that the marks make the defendants’ computer program more functional is irrelevant”. Terefore the marks were deemed not functional and were granted trademark protection.
In Rosetta Stone I, despite finding that there was no likelihood of confusion, the Eastern District of Virginia held that Google’s practice was a non-infringing, functional use “because Google uses Rosetta Stone’s trademark to
identify
relevant information to users searching on those trademarks”. As the Eastern District of Virginia then reasoned, keywords are used to generate both organic search results and sponsored links and are thus “essential to the search engine’s indexing function because they enable Google to readily identify in its databases relevant information in response to a web user’s query”.
However, the Fourth Circuit overruled the
Eastern District of Virginia on the issue of functionality and faulted the district court for “focus[ing] on whether Rosetta Stone’s mark made Google’s product more useful, neglecting to consider whether the mark was functional as Rosetta Stone used it”. Te Fourth Circuit explained “there is nothing functional about Rosetta Stone’s use of its own mark; use of the words ‘Rosetta Stone’ is not essential for the functioning of its language-learning products, which would operate no differently if Rosetta Stone had branded its product ‘Sphinx’ instead of Rosetta Stone”.
Te Fourth Circuit’s Rosetta Stone II clarifies a few important issues with respect to Google’s AdWords programme.
It places the Fourth Circuit in line with the Ninth Circuit with respect
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