Rosetta Stone Suit vs Google Dismissed

Reuters

 

 

Language software maker Rosetta Stone Inc's trademark infringement lawsuit against Google Inc has been dismissed by a federal judge.

Rosetta has vowed to keep pursuing the case which has broad implications for trademark ownership in the digital age.

In the suit filed in 2009, Rosetta claimed Google profits by allowing rivals that pirate its technology to buy the top "sponsored link" ad on search results pages.

Consumers who search for "Rosetta Stone" on the popular search engine and click on a "sponsored ad" may be visiting the website of a software pirate that purports to be Rosetta, but in reality sells a sub-standard product, the lawsuit claimed.

In a statement released Thursday, Google said the ruling was "consistent with a growing line of decisions" about the Internet.

"Users searching on Google benefit from being able to choose from a variety of competing advertisers, and we've found no evidence that legitimate use of trademarks as keyword triggers or in the text of advertisements confuses consumers," the Mountain View, California-based company said.

"It's not just about Rosetta Stone, frankly," Chief Executive Tom Adams told Reuters. "This is happening for lots and lots of other companies. We're willing to stick our neck out. Google is a very intimidating company."

The company is still awaiting the full ruling from Judge Gerald Bruce Lee of the U.S. District Court for the Eastern District of Virginia.

Rosetta, based in Arlington, Virginia, said it had hoped for a full jury trial, and may appeal to a higher court.

The company's lawyers claim Google "picks and chooses" to whom it sells sponsored ads.

A Reuters search late on Thursday afternoon showed no sponsored ads for Washington Post Co or American Airlines parent AMR Corp.

However, a sponsored ad for Rosetta Stone links to the website, www.studyingsoftmall.info, which claims to offer discounted Rosetta Stone products, though Rosetta is not affiliated with that website.

"Until you're subjected to this kind of piracy and sale of your trademark to the highest bidder, you don't really understand the case," Adams told Reuters.

Rosetta sells software to help users learn one of 31 languages, including Farsi, French and Irish.

The company is boosting its presence outside the United States, hoping to grow its international business from 11 percent of revenue to as much as 50 percent in the next four years.

Google, the world's most popular Internet search engine, makes most of its revenue from advertising. The company said earlier this month that first-quarter revenue rose 23 percent, largely due to a rebound in Internet advertising.

Shares of Rosetta fell 0.6 percent to close Thursday at $26.33. Google rose 0.5 percent to $532 on Nasdaq.

Rosetta Stone Claims Infringement

A maker of language software is suing a smaller competitor for alleged trademark violations in an effort to combat what it claims is "piggybacking," a practice in which companies use major players' brand names or other trademarked words in the text of search ads to lure Web surfers to their own sites.

The case highlights a particular struggle for companies that rely heavily on the Internet for advertising and putting their brands before the public.

Rosetta Stone Ltd., an Arlington, Va.-based maker of software for teaching and learning foreign languages, filed a suit in federal court in California last week against Rocket Languages Ltd., Libros Media Ltd., members of an affiliated advertising program and other defendants, who were not identified. The complaint alleges, among other things, that Rocket Languages and its affiliates purchased and used the words Rosetta Stone, which are trademarked, or confusingly similar variations as "keywords" in several Internet advertising programs, including Google's AdWords program and Yahoo's Marketing Solutions program.

As a result, according to the complaint, when a user of one of those search engines types in "Rosetta Stone" or "Rosetta Spanish," the search may produce ads for Rocket Language's products or other ads as well as the Rosetta Stone ad. The complaint also alleges the defendants used the trademarked words Rosetta Stone in the headlines of the links they sponsored that appear on the right side of the Google search page.

Rocket Languages, which is based in New Zealand, did not return a call placed to its Los Angeles office, where it conducts its U.S. operations.

"A number of these cases have been filed against Google itself," said Paul C. Llewellyn, a trademark lawyer in New York. "But Google has been vigorous in defending their cases, because the AdWords program is one of their main sources of revenue."

While the mere purchase of the Rosetta Stone trademark for a sponsored link might be enough to trigger federal trademark law, Mr. Llewellyn said, the case may come down to whether Rosetta Stone can prove there is a substantial likelihood that a significant number of consumers are going to think Rosetta Stone is somehow affiliated with the ads.

That may be a more difficult claim to prove. As late as Monday afternoon, a Google search for "Rosetta Stone" turned up sponsored links titled "Don't Buy Rosetta Software," and "Rosetta Spanish a Scam?"

Mr. Llewellyn says consumers are unlikely to believe Rosetta Stone is associated with those Web sites.

By: Dan Slater
Wall Street Journal; July 8, 2008