Rosetta Stone LTD v. Google Inc., No. 1:2009cv00736 - Document 227 (E.D. Va. 2010)
Court Description: MEMORANDUM OPINION re Plaintiff's Motion for Partial Summary Judgment as to Liability, Defendant's Motion for Summary Judgment. Signed by District Judge Gerald Bruce Lee on 8/3/10. (klau, )
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Rosetta Stone LTD v. Google Inc. IN Doc. 227 THE UNITED STATES EASTERN DISTRICT COURT FOR THE DISTRICT OF VIRGINIA ALEXANDRIA DIVISION Rosetta Stone Ltd., ) Plaintiff, ) V. ) Google Inc., Case No. l:09cv736 (GBL/TCB) ) Defendant. ) MEMORANDUM OPINION THIS MATTER is before the Court on Plaintiff's Motion for Partial Summary Judgment as to Liability Defendant's Motion for Summary Judgment case concerns (Dkt. {Dkt. Plaintiff Rosetta Stone Ltd.'s allegations that Defendant Google Inc. No. No. 103) 112). and This {"Rosetta Stone") ("Google") is actively assisting third party advertisers to mislead consumers and misappropriate Rosetta Stone's trademarks by using the trademarks (2) (1) as keyword triggers for paid advertisements and within the title and text of paid advertisements on Google's website. There are five issues before the Court. The first issue is whether Google's practice of auctioning Rosetta Stone's trademarks to third party advertisers for use in their Sponsored Link titles and advertisement text creates a likelihood of confusion to warrant granting summary judgment in favor of Rosetta Stone as to Counts I (trademark/service mark Dockets.Justia.com infringement under the Lanham Act), under Virginia Law), and VI law). Notwithstanding second issue a finding of keyword triggers functional and, therefore, is whether Google advertisers continues Stone products under the infringement, its advertising program is The third third party trademarks or knowingly in their Sponsored Link despite Rosetta Stone's reports to warrant granting summary judgment in favor of Rosetta Stone as to Count II (contributory trademark/service mark infringement under the Lanham Act). whether Google exercises party advertisers' The fourth issue joint ownership and control as to Count III (vicarious infringement under the Lanham Act). Rosetta Stone from a decline Google's practice of The final in favor of issue is whether loss resulting which is attributable auctioning Rosetta Stone's profit to third party advertisers, text trademark/service mark sufficiently demonstrates economic in its brand name, is over third Sponsored Link titles and advertisement on its website to warrant granting summary judgment Rosetta Stone the selling counterfeit Rosetta trademarks text, confusion, Rosetta Stone's a non-infringing use. advertisers to use of intentionally induces titles and advertisement of likelihood of to bid on Rosetta Stone's to permit (trademark infringement (unfair competition under Virginia is whether Google's use trademarks as issue V to trademarks for to warrant granting summary judgment in favor of Rosetta Stone as to Count IV (trademark/service mark dilution under The Court grants Counts I, summary judgment V and VI because no the Lanham Act). in favor of Google on reasonable trier of fact could find that Google's practice of auctioning Rosetta Stone's trademarks as keyword triggers to third party advertisers use of in their Sponsored Link titles and text confusion as goods. to the Furthermore, source or origin of because Google uses creates a likelihood Rosetta Stone's Rosetta Stone's trademark to identify relevant information to users those trademarks, functional one. The Court grants Count II because no reasonable Google summary judgment and non-infringing in favor of Google on fact could find that or knowingly continues in their Sponsored Link titles The Court also grants on Count trier of searching on to permit selling counterfeit Rosetta Stone products trademarks text. is a intentionally induces advertisers the the use summary judgment III because no reasonable trier of Google exercises advertisers' joint for to use and advertisement in favor of Google fact could find that ownership and control over third party Sponsored Links titles and text. Neither Google's employees nor its Query Suggestion Tool directs or influences third party advertisers to bid on Rosetta Stone's trademarks when they subscribe the Court grants because there to Google's advertising program. Finally, summary judgment in favor of Google on Count IV is no genuine dispute of material fact that Rosetta Stone's brand awareness has only increased since Google changed its terms trademark policy to permit as keyword titles triggers and advertisement and as words use of trademarked within Sponsored Link text. I. A. the Plaintiff Rosetta Stone BACKGROUND Ltd. and the Rosetta Stone Marks Rosetta Stone is a Virginia-based corporation founded in 1992 that provides technology-based language and services. foremost (PL's Mem. Supp. Partial Summ. language learning products are thirty languages and are used by schools, government entities and millions of countries. (Adams Decl. 1-2.) As the ^ 10-11.) available in over corporations, individuals in over 150 To preserve its trademark Rosetta Stone obtained federal trademark registration for some of its marks, including: LANGUAGE LEARNING SUCCESS, "Rosetta Stone Marks"). 2-7, Exs. 1-6.) ROSETTA STONE, ROSETTASTONE.COM, (the (Eichmann Decl. ROSETTA STONE and ROSETTA WORLD H 2; May Decl. ^ These Marks have become distinctive and uniquely associated with Rosetta Stone. J. J. language education company in the United States, Rosetta Stone's rights, learning products (PL's Mem. Supp. Summ. 3-4.) In order to build the Marks, fame, Rosetta Stone advertises reputation, and goodwill of through a variety of media, its including television, radio, and telephone directories. newspapers, magazines, (Eichmann Decl. It conducts a substantial amount of and makes its online business. a sizeable 1M 3-6, Exs. 1-3.) its business over the Internet using many web-based services, by Google, direct mail, including those offered investment (Eichmann Decl. in the development of U 6, Exs. 1-3.) Along with promoting its products and services via its own website (www.rosettastone.com), of third parties. Barnes & Noble, products. It authorizes and Borders, (Caruso Decl. 96:12-98:10.) Ex. Specifically, Amazon.com and eBay Marks Rosetta Stone advertises that resellers on the websites such as Amazon.com, to sell authentic Rosetta Stone 72 at 147:9-148:18, Ex. 58 it entered into agreements allow them to use in connection with advertising. the Rosetta (Caruso Decl. at with Stone Exs. 40- 44.) B. Defendant Google Inc. and Google's Located in Mountain View, company that owns internet (Ans. and operates search engines, 1 3).) California, one of Google is an Internet the world's most utilized www.google.com. (Spaziano Decl. Ex. 1 The Internet is a global network of millions of interconnected computers and the World Wide application running on the of text, Search Engine images, and sound. Internet Web is that allows (First Am. Compl. an for the display fl 13.) Much of the information on the web pages the that Internet World Wide Web is stored in the form of can be assessed through a computer connected to (available through commercial Internet service providers or "ISPs") and viewed using a computer program called a such as Microsoft "browser," identified by its "web address" ordinarily includes the website's "domain name" (First Am. searching information, Compl. but who do not Compl. fl 3.) entered into it against or which (e.g., fl 13.) service know the exact domain it may be found, may use Google's Compl. H 25.) is a computer program that allows web users World Wide Web for websites is (First Am. search engine to locate it. (First Am. ("URL") for a specific company product, name or website address where engine A web page http;//www.rosettastone.com), www.rosettastone.com). or piece of Explorer. own unique Uniform Resource Locator {e.g., Web users Internet A search to search the containing particular content. A search engine checks the terms its databases and applies a formula or algorithm to produce a search results page that lists the websites that may relate to the user's search terms and their corresponding links. search engine, the "enter" Compl. a web user need only type key (or click the a list of hyperlinks identifies as (First Am. ("links") relevant to the t 25.) To use Google's in a few words "Google Search" to web pages button) and hit to receive that Google search requested. (First Am. Compl. 1 4.) The search results generated by Google's search engine are determined by a in order of "natural" lists results terms input into the search engine, "organic" objective relevance websites appearing near the Compl. or top of to Online, Netscape, WorldNet, is EarthLink, and Ask.com. the web page. invites consumers searches to affix a (First Am. Internet Compl. Compl. 80% of such as America Shopping.com, Compl. f 34.) at the top these users to conduct currently visiting t 34.) global AT&T In addition, "Google Toolbar" that allows (First Am. content network reaches U.S. CompuServe, even when they are not www.google.com. 70% of (First Am. available not only on its own (First Am. their Internet browsers Google search with the most relevant website but also through other popular websites of the H 26.) Google's search engine Google system that As such, Google's internet users, searches use Google's and over search engine. 11 35.) When a web user hits the "enter" key, Google not only provides web users with organic search results, it also displays paid advertisements above or alongside the organic search results. 76 at (Caruso Decl. 175:22-177:16, Ex. Ex. 64 59 at 202:1-9 at & 205:20-206:25, 112:16-113:1.) Ex. These paid advertisements consist of a combination of content and a link to the advertiser's website such that if a user clicks on the link, she will open the advertiser's website, which offers additional information about the advertiser and may provide the user with an option to purchase the advertiser's goods offer such content-based links, its advertising programs Program C. (First Am. Program" is advertisements engine Sponsored Links. form of Uf 5 &= 36).) to the right of Ex. 1 (Ans. share of the organic to users color, typeface, Compl. of Google's search Ex. 1 (Spaziano Decl. Those above the organic search results 10 & 13.) and font those to similar to the query. the separated by a blue These Sponsored Links size generated from a web user's First Am. U 36.) (Spaziano Decl. search results. search results are Exs. Select Advertising Compl. a yellow rectangular background while (Caruso Decl. right line. appear in a search results (Caruso Decl. Exs. 10 & 13; ^ 3 8.) Under the AdWords Program, Google offers an advertiser the ability to select certain words or phrases ("keywords") that, combined with the advertisement's quality and the maximum bid price of The Sponsored Links are displayed above or 1 28).) the organic least one an auction-style advertising program that displays (Ans. To Program Google's AdWords in the relies on at called the AdWords ("AdWords Program"). Google's AdWords Google and services. for the advertisement, will trigger a Sponsored Link to the advertiser's 20:19, chosen website. 65:13-66:8, keywords & 100:16-101:1.) from a list of words (1) Keyword Tool; (2) trademark-specific version of (Caruso Decl. Ex. Before the list 54 at Advertisers keyword tools, 24:7, & 25:2-7.) at 18:17- the of which there and (3) are a the Query Suggestion Tool. 13:18-14:4, 18:11-17, passed through a filter which removes trademarked terms received a complaint. 52 select Query Suggestion Tool; is displayed to advertisers, into the filter as Ex. or phrases generated algorithmically using Google's three: (Caruso Decl. (Caruso Decl. Alternatively, terms & 21:25-22:11.) however, it is that Google entered for which Google has Ex. 54 at 19:8-24, 23:22- advertisers can also select the keywords on their own without relying on the list generated by Google's keyword tools. (Lloyd Decl. Ex. 9 & 11.) If the advertisement's quality and bid price are sufficiently high, qualifies to be shown on Google.com 17:12-21:18, (Ans. 65:13-66:8, HH 29 & 39), For example, company that sells Ex. & (Caruso Decl. 100:16-101:1; using the AdWords Program, shoes, 52 at Spaziano Decl. 2 at GOOG-RS-0306288, children's Ex. Ex. it Ex. 1 3 at 9.) Company B, can cause Google a to display its Sponsored Link whenever a Google user conducts a search using the term, "children's shoes." Company B can also cause its Sponsored Link to appear whenever the user searches for the term "Company A," Company B's competitor, who also sells children's shoes. to buy children's term A the Consequently, shoes (Company A's trademark), from Company B, the user from Company B. advertisers front of consumers who certain products companies. If the user Company B's website would open on Thus, Program, the to view children's competitor. screen and the user might be able shoes D. inviting link, a search of a Sponsored Link would appear on Company A's clicked on Company B's the from Company A conducts search results page, shoes whenever a Google user wishing to purchase children's by participating in the AdWords are able to place their advertising in identify themselves as or services interested in offered by the advertisers' (First Am. Compl. Google's Trademark H 27.) Policy Google's policy of allowing third party advertisers to purchase specific trademarks as keyword triggers Sponsored Links began in 2004. Compl. f 44.) (Lloyd Decl. for the Ex. 1; First Am. In its Form S-l Registration Statement to the Securities Exchange Commission, informed its investors of dated April 29, 2004, Google the following: In order to provide users with more useful ads, we have recently revised our trademark policy in the U.S. and in Canada. Under our new policy, longer disable ads due advertisers of the we no to selection by our trademarks as keyword triggers for ads. (Spaziano Decl. Ex. 7). The S-l Form further states: 10 As a result of subject . . . . result this to more change trademark Adverse results in, in policy, in these or even compel, which could result in a we may be infringement lawsuits may a change loss of lawsuits in this practice revenue for us, which could harm our business. (Spaziano Decl. In 2009, Decl. Ex. Ex. 7). Google again revised its 1.) Specifically, distinct uses of advertisement allows, itself. advertisers advertisement's bearing the text or compatible products to Caruso Decl. 55 Ex. To enforce team, known as its include they (2) (1) sell its AdWords Lloyd Decl. Ex. the HH 9-11.) the the The new policy authorized trademark resell in the legitimate products components, trademark policy, Program. 1-2.) two replacement parts, trademark; the goods (Lloyd Decl. or (3) or services Exs. 2, 4; 154:6-15.) the Trust Safety Team works as part of trademark term. at a trigger to information about Google and Safety Team, complaints about advertisements of as corresponding to the provide non-competitive the (2) {Lloyd Program now makes the brand owner and its if trademark; corresponding to and (1) (Lloyd Decl. in addition to licensees, the AdWords a given keyword: Sponsored Link advertisement trademark policy. which responds to that violate certain conditions (Caruso Decl. Ex. 67 As a general practice, to address employs a trademark problems 11 with at 7:24-8:19; the Trust and fraud and counterfeiting. (Caruso Decl. 34:21-37:11, 67 at 108:2-109:16; The Ex. Team responds Google's website violate Ex. 65 to notices and its AdWords at Program. the Google efforts, Louie Decl. (Caruso Decl. For example, (Caruso Decl. Calhoun Decl. to websites or suggest Exs. at on confirmed to 21, 23-25, 28, when Rosetta Stone's a Exs. Exs. 21, B-C.) including removing 23-25, But despite have used loopholes that 28, Ex. 65 at its in Google's that deceive and misdirect sell counterfeit Rosetta Stone to consumers a connection to Rosetta Stone that does not exist. E. 53 HH 1-5.) informs Google that programming to create Sponsored Links products Ex. selling counterfeit Rosetta Stone some advertisers Google's users 50:4-51:10, responds by taking action, advertisement. 135:11-138:25; at counterfeit advertisements Jason Calhoun, particular advertiser is products, of 68 takes down any advertisements 135:11-138:25.) Enforcement Manager, Ex. (First Am. Compl. H 58.) Procedural History Based on Google's current trademark policy, brings this action alleging that Google, Program, Rosetta Stone through its AdWords is helping third parties to mislead consumers and misappropriate the Rosetta Stone Marks by using them as keyword triggers for Sponsored Links and using them within the text or title of the Sponsored Links. (First Am. 12 Compl. 1M 70-124.) Rosetta Stone alleges under the AdWords Marks or words, keyword triggers Google Comp. phrases, that companies or terms cause the Rosetta Stone similar to Sponsored Links that (i) those Marks as to be displayed, (iii) amounts to (ii) from Rosetta Stone's sell counterfeit Rosetta Stone products, are entirely unrelated to H 5.) to compete with Rosetta Stone, language education programs competitors, (iv) Program the right to use is helping these advertisers misdirect web users websites of sell that by giving third party advertisers language education. According to Rosetta Stone, trademark infringement and or (First Am. Google's conduct is driven by an economic incentive to increase the number of Sponsored Links that appear for every term entered into its search engine because Google is paid by its AdWords advertisers on a (Spaziano Decl. Ex. 1 (Ans. HI 37 "cost-per-click" basis. & 63).) In its First Amended Complaint, Rosetta Stone alleges seven Counts for relief: I the Lanham Act); (contributory trademark/service mark II (trademark/service mark infringement under infringement under the Lanham Act); III (vicarious trademark/service mark infringement under the Lanham Act); IV (trademark/service mark dilution under the Lanham Act); V (trademark infringement under Virginia Law); competition under Virginia law); under Virginia Law). and VII VI (unjust (unfair enrichment The parties now move for summary judgment 13 on all counts. Because Google filed a Motion to Dismiss Count VII of Rosetta Stone's Amended Complaint1 filings its Motion for Summary Judgment, addresses only Counts STANDARD Under Federal Rule of grant summary judgment if is no genuine Civil P. 56 (c). moving party. (1986). this Memorandum Opinion OF REVIEW Procedure 56, the Court must issue as to any material fact, judgment as a matter of that and that law. facts in a light most Anderson v. R. the favorable to the non- Liberty Lobby, Inc., Once a motion for summary judgment and supported, the Fed. In reviewing a motion for summary judgment, Court views the 255 before the moving party demonstrates moving party is entitled to Civ. 94.) I-VI. II. there (Dkt. No. 477 U.S. 242, is properly made the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Radio Corp., 587 475 U.S. 574, (1986). Indus. Co. v. Zenith tt[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. A "material 247-48 fact" of a party's case. 1 at Id. is a at (emphasis added). fact 248; that might affect the outcome JKC Holding Co. v. Wash. Sports The Court addresses Google's Motion to Dismiss Count VII in a separate Memorandum Order. 14 Ventures, fact Inc., 264 F.3d 459, is considered to be substantive affect law, and U.S. at 248; Cir. 2001). "material" the the entry of "genuine" v. facts that might 249 concerning a in the nonmoving party's 248. Rule 56(e) 265 "material" jury to return a verdict at sufficient Anderson, F.3d 259, is ill U.S. law will summary judgment." arises when the evidence Anderson, Whether a the governing Caldera, issue 2001). is determined by the suit under Hooven-Lewis A (4th Cir. "[o]nly disputes over the outcome of properly preclude 465 (4th fact to allow a reasonable requires favor. the nonmoving party to go beyond the pleadings and by its own affidavits, by the depositions, on file, answers designate specific genuine issue for trial. 317, 324 to interrogatories, facts showing that Celotex Corp. v. or and admissions there Catrett, is a 477 U.S. (1986). Ill. A. All ANALYSIS Direct Trademark Infringement Under the Lanham Act2 The first and most contentious issue between the parties is whether Google is liable for direct trademark infringement based on its practice of auctioning the Rosetta Stone Marks to third party advertisers 2 for use in their Sponsored Link titles and The Court addresses Counts I, V and VI together because the test for trademark infringement under the Lanham Act is essentially the same as that for common law trademark infringement and unfair competition under Virginia law. 15 advertisement judgment text. On this issue, the Court grants in favor of Google because no reasonable could find that Google's practice of trademarks as keyword triggers summary trier of fact auctioning Rosetta Stone's to third party advertisers creates a likelihood of confusion as to the source or origin of Rosetta Stone's products. provides, Section 32(1) the Lanham Act in pertinent part: Any person who shall, registrant - (a) counterfeit, copy, registered mark advertising of use without the confusion, or colorable of the imitation of a in connection with the any goods or services or to cause mistake, reproduce, consent in commerce any reproduction, connection with which such use (b) of counterfeit, is . . . on or in likely to cause or to deceive; or copy or colorably imitate a registered mark and apply such . . . to be used in commerce upon or in connection with the . . . advertising of goods connection with which such use confusion, or to cause mistake, or services on or in is likely to cause or to deceive, be liable in a civil action by the registrant 15 U.S.C. § 1114(1) (2005). shall .... A cause of action for trademark infringement under the Lanham Act requires the plaintiff prove that (3) (1) it possesses a mark; defendant's use of (2) defendant used the mark; the mark occurred in commerce; defendant used the mark in connection with the for sale, (5) distribution, to sale, (4) offering or advertising of goods or services; defendant used the mark in a manner likely to confuse consumers as to the source People for the Ethical or origin of goods Treatment of Animals v. 16 or services. Doughney, 263 and F.3d 359, 364 {4th Cir. likely depends on the distinctiveness of consumers; identify; (3) (4) 2001). Whether consumer confusion is following nine the mark; (2) similarity of (5) similarity of markholders; (6) defendant's Ltd., 575 however, Busch, similarity of similarity between the 393 (7) v. L (9) to the marks used by the sophistication of L.L.C. (4th Cir. & L Wings, two marks actual confusion; v. 2009). are relevant or weighed equally. Inc. the facilities intent; George & Co., F.3d 383, strength or advertising used by the the defendant's product; consuming public. (1) the goods and services markholders; quality of factors: Inc., 962 (8) the Imagination Entm't Not all Id. factors, {citing Anheuser- F.2d 316, 320 {4th Cir. the four trademark 1992)) . Here, the parties do not dispute infringement elements. 20; Def.'s Mem. Supp. (PL's Mem. Summ. J. Supp. 8-23.) The first Partial Summ. inquiry, J. 15- therefore, is whether Google's practice of auctioning the Rosetta Stone Marks as keyword triggers for Sponsored Links and allowing their use within the Sponsored Links' text or title is likely to create confusion among consumers as to the source or origin of Rosetta Stone's goods or services. Specifically, the nine confusion factors are in dispute: intent; (2) actual confusion; sophistication. (PL's Mem. and Supp. 17 (3) (1) only three of defendant's the consuming public's Partial Summ. J. 17-26; Def.'s Mem. factors 1. Supp. Summ. J. 15-20.) The Court addresses in turn. Intent No genuine dispute of material cause a reasonable juror to potential purchasers of the Rosetta Stone Marks fact exists which would find that Google Rosetta Stone's as intended to confuse products by auctioning keyword triggers or allowing use within the Sponsored Link titles and text. is no evidence that Google is attempting to pass off or services as Rosetta Stone's. trademark cases L & L Wings, the buying public' Inc., 962 F.2d 316, {quoting Pizzeria Uno Corp. Cir. 1984)). "[T]he Intent v. 321 Temple, . . to create knock-offs other's. See Pizzeria Uno, . advertisements, and pass (4th Cir. 747 Inc. 1992) F.2d 1522, them off 747 F.2d at 1535 etc., 1535 (4th as those ("[0]ne (2d Cir. 1948), of intending to make to resemble the other's so as deliberately to induce confusion."); 377 but an Anheuser-Busch, to profit from another's reputation generally attempts F.2d 374, in is generally shown by the defendant's efforts his signs, there its goods intent to profit " their Moreover, relevant is not merely an intent 'intent to confuse v. these cert, Best & Co. denied, 335 v. Miller, U.S. 818 167 (1948) (wIf the defendant selects a trademark or trade name similar to the plaintiff's with intent to palm off his wares as the plaintiff, intent may be proof of his 18 those of strong evidence of . . . the likelihood of confusion."). In simplified terms, aggregates Google's popular search engine information and provides advertising space. akin to a newspaper or magazine To attract advertisers, advertisements This is selling advertising space. Google created a system for displaying that would be economically profitable company and paid advertisers. It does not, Google-made products on its website. however, for its sell Web users do not visit Google's website to buy Google products because Google does not sell products. Any argument that Google is its goods as those of Rosetta Stone's is, To prove that Google Rosetta Stone Marks, Rosetta Stone points can generate more revenue. & Ex. 19; therefore, unfounded. unlawfully intended to trade that use of trademarked keywords 0309882 trying to palm off the to Google's knowledge in the text of Sponsored Links (Spaziano Decl. PL's Mem. on Supp. Summ. J. Ex. 18 at GOOG-RS- 23.) Rosetta Stone insists Google revised its trademark policy in 2009 knowing that the change would result in higher click-through rates. (Spaziano Decl. Ex. 17.) However, reasoned in Anheuser-Busch, insufficient evidence of evidence of financial gain alone is intent. court reversed the district as the Fourth Circuit 962 F.2d at 322. There, the court's grant of plaintiff beer manufacturer's motion for judgment notwithstanding the verdict that defendant T-shirt distributor committed trademark 19 infringement. Id. primary motive in creating the T-shirt design was profit, same the the While recognizing that the defendant's court explained that an intent thing as an intent commercial success to confuse. of the . . . Id. to make a to profit is not the ("We cannot assume T-shirt that resulted from consumer confusion; consumers may have been moved to buy the T- shirt by the simple fact of its design.) more money under that Likewise, the amused by the cleverness evidence that Google stands to make its current cannot meet Rosetta Stone's they were trademark policy, burden of proving Rosetta Stone Marks with intent absent more, that Google used to confuse the buying public. An alleged infringer may intend to benefit from the trademark without ever intending to cause Id. its earnings does Google's intent to increase necessarily demonstrate an intent consumer confusion. to mislead or confuse potential buyers of Rosetta Stone's products. Google's own business interest, its service. In fact, as a search engine, confuse its users by preventing counterfeiters advantage of 76 at 175:22-177:16; not it is in to from taking Google's success depends on its users finding relevant responses to their inquiries. Ex. not Def.'s Mem. Opp'n Summ. (Caruso Decl. J. 19.) It does not make money from advertisements of counterfeit Rosetta Stone products because counterfeiters generally use 20 stolen credit cards to secure the advertising, and battling counterfeiters is a drain on Google's resources. 9; Louie Decl. to profit flU 3-6.) (Lloyd Decl. loss would far exceed its provided search services without counterfeiting operations. immediate If Google causing Moreover, Google argues because it developed a websites its gains long if it regard to possible intentionally confuses users and deprives them of a positive experience, website will decrease, H Even if it is true that Google stands financially from higher click-through rates, term financial part, such it to lose its traffic at its revenue. it revised its technological trademark policy, tool in by which the linking to advertisements on www.google.com could be automatically checked to assess reseller or informational the website's status as a site before an advertisement containing a monitored trademark term would be displayed (Caruso Decl. Ex. Ex. technological 5). Google's This 62 at 80:18-81:5 focus Consequently, it team, thereby leaving more on securing additional cannot be Lloyd Decl. feasibility minimized the work of advertising and support for them to & 88:16-90:22; time advertisements. shown that Google's intent in providing third party advertisers with the opportunity to bid on the Rosetta Stone Marks as keyword triggers violates Act or related statutes. 21 the Lanham 2. Actual Confusion The parties agree source or origin of best evidence of Summ. J. 20; that goods consumer actual is the most likelihood of Def.'s Mem. Rosetta Stone relies on two cases J. 10.) 459 Supp. Summ. J. In Sara Lee Corp. (4th Cir. "L'eggs" 1996), v. (PL's Mem. 18.) in a In this vein, that likelihood of PL's Reply Mem. Kayser-Roth Supp. Corp., confusion. Supp. 81 Google's Summ. F.3d 455, a manufacturer of hosiery bearing the trademark brought marketed a 20-21; J. to the factor and the for its position trademark policy generally results (PL's Mem. important confusion. Opp'n Summ. confusion as "Leg Looks" suit against a competitor which brand of hosiery. The plaintiff presented six instances of actual confusion by women who bought Leg Looks® under the impression that it was a Leggs® product. Id. at 466. The record included consumer market surveys indicating that about 30-40% of consumers throughout were confused as to the source of the product, of the L'eggs® and Leg Looks® marks. infringement, on the Jd. by the at 4 67. the nation similarity In finding the court determined the confusion element based surveys which showed a 30-40% consumer confusion frequency. Id. Decided well before Google went public Google's in 1998 and before search engine gained widespread popularity, important for the legal consequence 22 Sara Lee is following a detailed set of facts which is vastly different with in this in at least direct case. At two ways. competitors Second, first blush, First, in the 100,000 v. no revised 100,000,000 Google's its advertisement of testimonies of de minimis. 575 F.3d at confusion among See George & 398 (affirming 500,000). more Since than impressions have been triggered on search results page Stone only points actual individuals out of more than trademark policy in 2004, Rosetta Stone Marks. evidence of infringement where plaintiff came forward with only four instances Google five consumer confusion evidence Rosetta Stone's Imagination Entm't, summary judgment of faced Rosetta Stone and Google are not impressions over six years is L.L.C. is language-learning software market. Rather, confusion testimonies of the Court Sara Lee is distinguishable the record here is devoid of amounting to 30-40%. Co. from what through the (Def.'s Mot. Supp. keyword use Summ. J. of 7.) the Rosetta to Google's own internal studies and the five individuals who claim to be confused by a Sponsored Link displayed on a Google search results page when they each conducted a term However, search for the "Rosetta Stone." Rosetta Stone's evidence of statements made by Google employees about Google's 2004 trademark policy and internal experiments concerned consumer impressions of advertisements that made use of third party trademarks which did not Rosetta Stone Mark. (Spaziano Decl. 23 Ex. 8-12 & 16; include a Spaziano Decl. the Tab A at Hagan Dep. five individuals who claim to be advertisement Ex. at Exs. 94:5, Sept. 56 at 13:4-16:15, Ex. 74 at 11:4-22 8-12 Ec 16; Spaziano Decl. 30, 2004, Jeffries Dep. 49:16-55:3, 2004.) None of confused referenced an Ex. 13:3-18:14, Decl. 30, used the in connection with advertising genuine (Caruso Decl. 71 Sept. that conformed to Google's policies i.e., Rosetta Stone Marks goods. 93:18-94:5, Thomas Dep. 70:8-73:21; & Ex. 57 at 13:9-24:6, 71:22-73:21; Spaziano Tab A at Hagan Dep. 75:5-79:21, PL's Mem. 93:18- Porter Dep. Supp. Summ. J. 20-21.) X-IT Products, Inc., 155 F. Supp. L.L.C. 2d 577 v. Walter Kidde Portable Equipment, (E.D. Va. 2001) equally distinguishable. There, complaint against the defendant for allegedly infringing on the plaintiff's packaging, the plaintiff is sell-sheets, of its residential escape ladder. filed an eight-count and Power-Point presentation Id. at 597. Denying summary judgment for both parties on the Lanham Act claim, the court looked to two actual instances of confusion and a survey conducted by the plaintiff's marketing expert showing a 40% confusion rate. Id. at 624. The court noted a complete absence in the defendant's record of any direct rebuttal evidence. Unlike the X-IT defendant, Id. Google provides rebuttal evidence in the form of declarations of various employees familiar with Google's search engine and advertising programs. 24 (Caruso Decl.; Lloyd Decl.; As Louie Decl.) to the five witnesses who allegedly purchased counterfeit Rosetta Google, rebuttal knowing that & 11:15-14:6, Ex. 15:4-16:15, & that & Ex. at 56 all five 20:4-28:5 & at testified Spaziano Decl. 24:6-11, Ex. 74 Porter Dep. Thus, 57 at 11:14-22, 15:2-19:20, Jeffries Dep. & 75:7-12.) at Ex. Tab A at Doyle Dep. Dubow Dep. 24:18-26:2, to directly from 13:4-16:15, 13:3-18:14, 38:18-43:10, 22:12-23:2, Thomas Dep. 71 & 74:12-75:12; 32:20-33:7, 20:2-21:2, shows (Caruso Decl. 101:1-8, 71:22-73:21, 24:20, evidence they were not purchasing the products Rosetta Stone. 13:9-24:6 Stone products after conducting a search on 23:19- 13:5-14:17, 21:11-22:12, none of the Rosetta Stone witnesses were confused about the source of their purchase but only as to whether what they purchased was genuine or counterfeit. They were not confused by the Sponsored Links, by the confusing nature of purchased. 24:20, Ex. particular, (Caruso Decl. 71 at but the websites from which they Ex. 13:3-19:22, 56 Ex. at 13:4-17:16, 74 at Ex. 71:18-73:21.) 57 at 23:2In two of the witnesses could not discern between the links offering genuine Rosetta Stone products and counterfeit ones. (Caruso Decl. Spaziano Decl. 43:19.) Ex 57 at 117:10-21, Tab A at Dubow Dep. Additionally, Ex. 117:10-21, 74 at 16:4-17:5; Thomas Dep. one of the witnesses purchased the counterfeit software through an organic 25 search and another 32:9- disposed of its authenticity 72:16-20; Dep. the software, thereby preventing an investigation of (Caruso Decl. Spaziano Decl. Ex 74 Tab A at at 15:2-18:3, Dubow Dep. 70:8-13, 79:11-81:11, & Thomas 47:12-18). Rosetta Stone's evidence of numerous by the record. contention that it has presented anecdotal examples of actual confusion is undermined Evidence of complaints to Rosetta Stone's customer care center from individuals who purchased counterfeit software between December the declarations employees. PL's Mem. 9, 2009 through March and interrogatory responses of (Calhoun Decl. Opp'n Summ. J. U 9; 11.) the record of complaints identify sources the responses product 189:23-190:19 Finally, (Le Decl. lawyers their deposition is Dr. than actual & that such as Craigslist and Kent Van Liere's Ex. 30 concerning screen at the source of a (Lien Decl. confusion. 194:1-195:15, UU 3-4.) inadequate when their reflect a mere uncertainty about rather 38; the means by which the allegedly testimony of Google shots presented at a review of Calhoun's declaration shows counterfeit products were located. Similarly, Ex. 25 at 159:21-163:11.) survey provides unreliable evidence of actual confusion because the result contained a measure of whether respondents on Rosetta Stone's However, in Mr. as rest Ex. referenced not Google, 2010 Spaziano Opp'n Decl. documents spam emails, 8, thought Google 26 "endorsed" a the Sponsored Link, responses a non-issue. Dr. to the question of whether a given respondents to offer Rosetta Stone products "endorse[d]" by Rosetta Stone, confusion as to the Decl. Ex. of actual Van Liere's 45-C at Questionnaire 3-4.) confusion, link perceived by for sale the which is not source or origin of opinion relied on was same as the products. Accordingly, the Court necessarily finds (Caruso on the point in Google's favor. 3. Consuming Public's Sophistication Contrary to Rosetta here is not the public its products, the Court's market is Stone's at-large, analysis. If relevant market therefore, the typical consumer is a factor in in the relevant sophisticated in the use of or possesses an expertise may be pertinent Perini Corp. 1990) the but only potential buyers of whose sophistication, regarding a particular product, Cir. contention, v. his sophistication or expertise in determining the Perini Constr., likelihood of confusion. Inc., 915 F.2d 121, (reversing the district court's 127-28 (4th finding of summary judgment for defendant because the court failed to consider consumer sophistication). Such sophistication may be shown by evidence of expert opinions or surveys. Bacardi also & Co., 412 F.3d 373, 390 (2d Cir. Star Indus., 2005). Inc. v. A court may "reach a conclusion about consumer sophistication based 27 solely on the nature of ("Unhurried consumers store, in the making decisions expected to exhibit the product or its price." relaxed environment about $12 sufficient to $24 As purchases, the liquor may be sophistication to distinguish between Star's and Barcardi's products, labeled.") of Id. which are differently (citation omitted). the record reflects, approximately $259 products for a single-level package and $579 three-level bundle. target market Rosetta Stone's (Caruso Decl. Ex. 53 at cost for a 115:20-116:5.) Its is comprised of well-educated consumers willing to invest money and energy in the time-intensive task of learning a language. (Caruso Decl. Consequently, Exs. it cannot encompass web users who would type Rosetta Stone Mark, of the Marks. 31 & 34, in a Ex. 69 at 86:20-88:1.) the public at large but only search query consisting of a and who must necessarily have unaided recall (Caruso Decl. Ex. 33; Def.'s Opp'n 20.) These same consumers who are willing to spend hundreds of dollars on language-learning software would reasonably take care in making such a decision. language, Given the they are more time commitment of likely to spend time learning about Rosetta Stone's products. 95:13-97:11.) demonstrate learning a searching and (Lien Decl. Ex. 36 at Their expertise and sophistication would tend to that they are able Sponsored Links and organic to distinguish between the results displayed on Google's 28 search results page. Therefore, Balancing all of factors, B. the does not Counts I, V factor strongly favors Google. disputed likelihood of the Court concludes Stone Marks under this amount that Google's use to direct of trademark the Rosetta infringement and VI. Functionality Doctrine Notwithstanding a relevant favorable infringement elements, protects Google's use of finding the for Google under the Rosetta Stone Marks The functionality doctrine provides feature is functional the article or article." U.S. 23, if wif it Traffix Devices, 32 is essential it affects as keyword that a product to the use or purpose the cost or quality of Inc. v. the functionality doctrine triggers. of confusion Mktg. Displays, the Inc., 532 (2001)(citation and internal quotation omitted) (finding that whether the product configuration is a competitive necessity is an incomplete test for functionality, must also consider whether the product the use or purpose of quality). feature the device or affects The doctrine "prevents as a court is essential its trademark law, to cost or which seeks promote competition by protecting a firm's reputation, to from instead inhibiting legitimate competition by allowing a producer to control a useful product Prods. Co., 514 U.S. 159, feature." 164 (1995). 29 Qualitex Co. v. Jacobson Although Traffix and Qualitex are functional element of both parties' cases where the mark holder's product products, the was present the principal theory is in the same- allowing competitors a monopoly on functional uses would inhibit legitimate competition. search engine, courts have information provider. F.3d 796, 803-04 more difficult Id. recognized its 2002) S & L Vitamins, 2008) as it Inc., 560 (citation omitted) still, and a pity, Inc. locating relevant websites for trademarks."); if the F. a valuable v. Welles, if a much they could do see also Designer Skin, Supp. 279 long phrases necessary to 2d 811, 819 n. 7 L.L.C. (D. v. Ariz. ("[I]t would seem more remarkable law, in its over-exuberant giddiness thrashes about with mark-type conflicts should kill as to a {''Searchers would have so only by correctly guessing the substitute role See Playboy Enters., (9th Cir. time Applying this principle in cyberspace, [readily available Internet directories and search engines].") Here, Google uses Rosetta Stone Marks, use is no different trademarked keywords, a This than the use of a Google search query to relevant to the user's search. search term like "Rosetta Stone" string of Sponsored Links and organic results page. the to identify relevant Sponsored Links. trigger organic search results In both cases, including The keywords, return a links on Google's search therefore, 30 will have an essential indexing function because in its databases user's 1510, query. 1531 relevant they enable Google information in response See Sega Enters. (9th Cir. 1992) Ltd. without the v. Inc., 1995)(finding that for purposes of Accolade, to achieve to a web Inc., 977 F.2d the plaintiff's compatibility was interoperability could not be achieved trademark sequence); Procom Tech., v. (finding that use of trademark initialization sequence functional because to readily identify 908 F. the word see also Compaq Computer Corp. Supp. "Compaq" compatibility was especially important as 1409, 1423 (S.D. inserted in computer code functional). advertisers Tex. This is rely on the keywords to place their products and services before interested consumers. Moreover, AdWords the keywords affect Program because absent to bid on trademarked terms the cost and quality of Google's third party advertisers' as keyword triggers, ability Google would be required to create an alternative system for displaying paid advertisements on its website-a system which is potentially more costly and less effective in generating relevant advertisements. In terms of encouraging competition, the keywords also serve an advertising function that benefits consumers who expend the time and energy to locate particular information, and to compare prices. Google's goods, or services, search engine provides consumers with a highly useful means for products and competitive prices. 31 of searching the internet If Google is deprived of this use of the Rosetta Stone Marks, consumers would lose ability to rapidly locate potentially relevant websites promote genuine Rosetta Stone products at Consequently, because the Court trademarked keywords advertisements functional, otherwise, competitive prices. as triggers for paid and no prohibition exists the Court holds that the functionality doctrine prevents a finding of C. that is persuaded that Google's particular use of is the infringement. Contributory Trademark Infringement Under the Lanham Act On the Court issue of contributory trademark finds that no reasonable trier of infringement, the fact could find that Google intentionally induces or knowingly continues to permit third party advertisers selling counterfeit Rosetta Stone products to use the Rosetta Stone Marks in their Sponsored Link titles and advertisement text. trademark infringement claim, defendant or [] continues infringement 844, . . 854 . ." another to infringe a to one whom it engaging in trademark Inwood Labs., (1982). show that the to supply its product knows or has reason to know is U.S. a plaintiff must "intentionally induces trademark, 456 To prevail on a contributory Although Inc. v. Ives Labs, facially applicable Inc., to manufacturers and distributors of goods, courts have applied Inwood's test for contributory trademark infringement 32 "to a service provider if he or she the infringing conduct." 93, 104 {2d Cir. Solutions, Inc., 2010) 194 Tiffany Inc. as a 1148-49 F.3d (7th Cir. "species of whose vendors 980, v. v. 600 the 984 (9th Cir. v. 1999)); Inc., v. court analogized a common law "imposes the Cherry Auction, Inc., 76 F.2d swap meet owner test for contributory trademark infringement (finding Hard Rock Cafe's application of contributory infringement, to Google's Query Suggestion Tool (the to a same duty to be . . . [as see also F.3d 259, 1996) of Network (treating trademark infringement Cir. As proof F.3d 955 sold infringing Hard Rock Cafe T-shirts Inc. over see Hard imposed on manufacturers and distributors"); Fonovisa, 265 (9th the Inwood "sound"). Rosetta Stone points trademark-specific version launched after Google changed its 2009) control eBay Inc., Concession Servs., 1992) tort," licensor on whom the Inwood] sufficient (citing Lockheed Martin Corp. Rock Cafe Licensing Corp. 1143, exercises trademark policy in and its purported allowance of known infringers to bid on the Rosetta Stone Marks. Spaziano Decl. 0309893, Exs. 123:8-124:4; Rosetta Stone Ex. 1 21-23; (Ans. f 57), Ex. Spaziano Decl. Calhoun Decl. argues (Caruso Decl. that at 53:17-61:1; Exs. Gultekin Dep. B-D.) First, Query Suggestion Tool's of generating suggested keywords to bid on brand names, 61 18 at GOOG-RS-0309888- Tab A at Uf 4-6 & 8, the Ex. for advertisers function encourages which directly induces advertisers 33 to them infringe Second, the Rosetta Stone Marks. Rosetta Stone argues (Spaziano Decl. Exs. 19-20.) that by allowing counterfeiters to open AdWords accounts and to bid on the Rosetta Stone Marks, despite receiving notice of supplying a service to their counterfeit those it knows or has engaging in trademark infringement. Calhoun Decl. Stone, Ufl 2, 4-5, Form S-l to more 7.) a spreadsheet To illustrate, that Google K 5, . . is evident the Securities . "may be subject ." (Spaziano Rosetta Stone proffers evidence of received which reflects that the dates when a Sponsored Link was the text of each Sponsored Link, March 1, 200 lawsuits 21-23; the domain names associated with each such Sponsored substance of Google's Decl. Exs. According to Rosetta which predicted that Google Rosetta Stone advised Google fraudulent, B-D.) is reason to know is the ongoing infringement trademark infringement Ex. Google (Spaziano Decl. Registration Statement to Exchange Commission, Link, Exs. Google's knowledge of from its Decl. 8, status, Ex. 2010, C.) response. and the date and (Caruso Decl. As documented, Ex. 28; from September 3, Calhoun 2009 through Rosetta Stone notified Google of approximately instances of Sponsored Links advertising counterfeit Rosetta Stone products. Summ. J. 11.) (Calhoun Decl. Exs. C-D; PL's Mem. Supp. Rosetta Stone contends that even after being notified of these websites, Links % 4, Google continued to allow Sponsored for other websites by these 34 same advertisers to use the Rosetta Stone Marks as keyword triggers and in the text of Sponsored Link advertisements. 2009 to December 2009, For example, 110 different selling Rosetta Stone products used trigger, and most of "Rosettastone" individual, these between October Sponsored Links purportedly "Rosetta Stone" included in their display. as a keyword "Rosetta Stone" Registered to the or same 110 Links were displayed on 356,675 different search-results pages. 000114 the Links their (Calhoun Decl. Ex. D at GOOG-RS-011- to GOOG-RS-011-000187.) The Court, however, is unpersuaded by Rosetta Stone's arguments. First, advertisers in optimizing their advertisements does not, itself, the mere existence of a tool that assists indicate intent to induce infringement. in Google's Query Suggestion Tool operates by searching or indexing the particular website identified by an advertiser and returning a limited number of keyword ideas for websites not affiliated with the URL. (Spaziano Decl. Ex. the list of keyword ideas 18 at GOOG-RS-0309888-0309893.) Before is provided to Google the advertisers, informs them that they are responsible for the keywords selected and for ensuring that their use of the keywords does not violate any applicable laws. (Caruso Decl. 22:11, Lien Decl. 60:1, & Ex. 23:22-24:18; 30 at 124:10-17 & Ex. Ex. 29 at 125:11-20; It is no secret that Google is 54 at 19:8-16, 40:25-42:11 Lloyd Decl. in the business of 35 Exs. 21:25& 58:15 selling & 12.) advertising space on advertisers on a an economic incentive and links engine. its and profits "cost-per-click" that appear to increase basis. from AdWords Google the number of for every term entered It would be good business practice encourage advertisers result website to bid on keywords in higher click-through rates. gain is common in all businesses. has advertisements into its for Google search to that they know will This Google therefore desire for economic is no different. desire for economic gain alone does not translate A into contributory trademark infringement. Second, there is no evidence that Google is supplying a service to those it knows or has reason to know is engaging in trademark infringement. In a recent case from the Second Circuit involving eBay Inc., auction and shopping website, eBay's promotion of a company that operates an online the court found that despite certain vendors of premium branded jewelry and its encouragement to those vendors to take advantage of the demand for Tiffany merchandise, parties' advertisements is its relationship with third insufficient to warrant a finding of contributory trademark infringement. 600 F.3d 93, 107-09 (2d Cir. demonstrate that eBay was 2010). Tiffany Inc. v. eBay Inc., Tiffany failed to supplying services to individuals who it knew sold counterfeit Tiffany goods. Id. eBay's generalized knowledge of infringement of a seller's trademark on its website 36 was insufficient to impose upon eBay an affirmative duty to remedy the problem. specific were be Absent evidence showing that contemporary knowledge of which particular infringing or would infringe contributorily liable. Like Tiffany, of Id. in the future, eBay had listings eBay could not Id. Rosetta Stone fails to show that Google knew the alleged infringing activity by its AdWords advertisers. There is little Google can do beyond expressly prohibiting advertisements for counterfeit goods, advertisements when it learns of taking down those their existence, and creating a team dedicated to fighting advertisements for counterfeit goods. Google has worked closely with law enforcement and brand owners to combat counterfeiting because it knows that those advertisements can create a bad experience for web users, who Google ultimately relies on for its business. {Caruso Decl. Exs. 21, Ex. 8:19 & 108:2-109:16, 23-25, & 28, Ex. Ex. 65 68 at at 50:4-51:10, Louie Decl. Ex. 53 67 at at 7:24- 36:5-37:16; Lloyd Decl. flU 10-11 & Ex. Exs. It would run counter to good business practice for B-D.) 6; 135:11-138:25, H 4-6; Calhoun Decl. Google to encourage and provide advertising space to those knows are infringing on the Rosetta Stone Marks. Similar to eBay's inability to detect which vendors were genuine, has no mechanism for detecting which advertisers counterfeit Rosetta Stone products. 37 it Google sold As Rosetta Stone admits, it cannot determine if a Rosetta Stone product is a counterfeit without physically inspecting it. (PL's Mem. 4.) the high rate of Even with eBay's counterfeits, the knowledge of Second Circuit did not impute specific knowledge necessary for liability. at 109. In two surveys extent of Opp'n Summ. conducted in 2004 Tiffany the degree of Tiffany, and 2005 600 purchased under the 73.1% of 2004 F.3d to assess counterfeit merchandise being sold on eBay's Tiffany found that J. the site, the purported Tiffany goods survey and 75.5% under the 2005 survey were counterfeit.3 of Id. those purchased at 97. eBay also received thousands of Notice Of Claimed Infringement Formsonline forms that allow intellectual property right owners report to eBay when they have good faith belief item infringed on a copyright or trademark. that Id. a at to listed 106. Comparing the evidence of knowledge attributed to eBay to the roughly 200 notices Google received of Sponsored Links advertising counterfeit Rosetta Stone products results pages, has not met the Court necessarily holds the burden of showing that on its search that Rosetta Stone summary judgment is proper as to its contributory trademark infringement claim. 3 The district court found that the surveys were methodologically flawed and of questionable value. 600 F.3d at 97. 38 D. Vicarious Trademark Infringement Under Rosetta Stone's also claim for vicarious fails because Google has advertisers' Marks no control over text. vicarious liability can only be infringer "exercise Perfect Assoc, 807 F.3d 788, Cafe Licensing Corp. 1150 v. liability)). to show that, aside AdWords advertisers or controls the Rosetta Stone Absent an agency relationship, imposed if 10, Inc. (9th Cir. v. the Visa 2007} defendant and over Int'l the Serv. (quoting Hard Rock Concession Servs., (reasoning that vicarious theory of of third party joint ownership or control infringing product." 494 Lanham Act trademark infringement Sponsored Links or their use in the advertisement the Inc., 955 F.2d at liability is a joint-tortfeasor In this case, Rosetta Stone would have from providing a list of keywords to its to choose from, Google has joint the alleged infringing advertisements ownership appearing on its website. Rosetta Stone's Supp. There, 2d 700, 705 reliance on GEICO v. (E.D. Va. 2004) offers Google, little Inc., 330 F. assistance. the court addressed a motion to dismiss and ended its analysis by testing the sufficiency of GEICO's allegations that Google monitored and controlled third-party advertisements after selling to the advertisers 702. While links to trademarked terms. Id. at the court found that GEICO sufficiently stated a claim for vicarious infringement, 39 it did not address the merits of the claim. Id. Thus, to satisfy a lower burden of proof. Rosetta Stone also argues because it has a legal the ability to do so, at Hagan Dep. Dep. Ex. 1 This (Ans. standard is thumbnail 43, to Relying on Perfect stop fails Mar. 28:2-11, 1U 41, a plaintiff's but GEICO had 10, that Google is vicariously liable right 27:3-18, 25:01-27:17, contrary to Rosetta Stone, 5, the to act. 2010, {Spaziano Decl. Lloyd Dep. 33:19-34:19, Sc 56); infringing conduct and & 62:4-22, 37:4-8; Calhoun Decl. UH 6 & 8, 494 F.3d at EXS. B-D.) 10 concerned copyright infringement of images of nude models. Louie Spaziano Decl. inapplicable here because Perfect allegations of Tab A 807. its Finding that the plaintiff was unlikely to succeed on the merits of vicarious infringement internet retailer, the court explained that a financial relationship is insufficient at 807-08. claims against the defendant its to establish joint ownership and control. Thus, the mere fact that Google has a See id. financial relationship with the alleged infringers does not demonstrate Google's control of the Sponsored Links appearing on its website. Google is not engaged in the business of selling goods but in selling space on a search page which happens to be a prime location for advertisers wishing to display their advertisements to online shoppers. This is no different in New York's Times Square who sell 40 space than building owners for billboards. Given Times Square's high pedestrian and vehicular traffic, located there offer advertisers great visibility, Google's popular search engine offers Aside from their location and size, billboards also allows creative and embellishments, a feature just as third party advertisers a great opportunity to display their advertisements services. billboards "customizing" for goods and advertisement by through extensions similar to a third party advertiser's ability to create the content of their Sponsored Link on Google's website. Without evidence that Google's Keyword Tools or its employees direct or influence advertisers Stone Marks, Rosetta Stone has not the appearance and content of the Rosetta Stone Marks liability cannot be E. to bid on the Rosetta shown that Google the Sponsored Links in those Links. controls and the use of Therefore, vicarious imposed on Google. Trademark Dilution Under the Lanham Act Insofar as Google does not sell it cannot be held liable language learning software, for trademark dilution. Additionally, Rosetta Stone fails to show trademark dilution where its brand awareness has only increased and where the reputation of Marks has not been harmed since Google policy in 2004. ("TDRA"), changed its its trademark Under the Trademark Dilution Revision Act which removed a plaintiff's obligation to show proof 41 of economic loss, a markholder against another person who, has become commerce famous, that is commences Dog, (2006); L.L.C., 507 "entitled to an injunction any time after the owner's mark use of a mark or trade name in likely to cause dilution by blurring or dilution by tarnishment of 1125(c)(l) at is the famous mark[.]" 15 v. Louis Vuitton Malletier S.A. F.3d 252, 264 n.2 (4th Cir. U.S.C. Haute Diggity 2007). To establish trademark dilution, Rosetta Stone must prove: famous Marks are distinctive; (2) that allegedly dilutes the Google uses a mark famous Marks; (3) a (1) and (4) its in commerce similarity exists between the Rosetta Stone Marks and Google's mark giving an association between the marks; § rise to the association is likely to impair the distinctiveness or reputation of the Rosetta Stone Marks. Louis Vuitton, 507 F.3d at 264-65 (listing the elements of a trademark dilution claim under the TDRA). dispute are the Stone's As first, to the first element, awareness 6 & and fourth elements of Rosetta claim. and have been since at 112:1-7, third, At reached 75%. Ex. 26-27; 30-34, PL's Ex. Opp'n least the Rosetta Stone Marks are 2009, when Rosetta Stone's brand (Caruso Decl. 60 24.) at Ex. 69 at 131:6-132:6; The Marks 111:6-12 Def.'s need not Mot. trademark policy in 2004. Rosetta Stone must show that 42 at any time after & Summ. have been when Google revised its only famous J. famous Instead, its Marks became famous, commerce Marks. that was § Stone Marks As on Google's if it a mark own goods similar Rosetta Stone to or services. . . . "[a]ny fair use own goods or services, . . . including use advertising or promotion that permits Nonetheless, of a famous mark § 1125(c)(3)(A) source for the in connection with consumers to compare (emphasis added). Rosetta Stone relies on cases involving defendants who used plaintiffs' marks and boost the defendants' Furstenberg Studio v. 2688184, Opp'n that a claim for dilution is not involves goods or services[.]" the Rosetta (PL's by another person other than as a designation of person's in the Rosetta Stone to the third element, that Google uses The TDRA provides actionable trade name likely to cause dilution of 1125(c)(1). does not argue 25.) Google began using a mark or at *4 (E.D. to capitalize on the plaintiffs' own goods Snyder, Va. Sept. No. or services. l:06cvl356 10 2007) fame Diane Von (JCC), 2007 WL (finding no dispute that defendants used the identical DVF mark on the inferior-quality dresses they sold and that such act was likely to cause dilution of the DVF mark); People for the Ethical Inc. 113 v. Doughney, F. Supp. 2d 915, Treatment of Animals, 920 (E.D. Va. 2000) (finding the defendant guilty of blurring the famous PETA Mark because he used an identical mark to mentally associate to that mark), aff'd, 263 F.3d 359, 369 (4th Cir. proof that Google uses the Rosetta Stone Marks 43 2001). PETA.ORG Absent to identify its own goods and services, liable for 1125(c) Marks, the Court may be its is 507 the association is 1125(c); ("'Distinctiveness' using is the argument that not sale of fails to liability under the Rosetta Stone satisfy the likely to harm the reputation of final F.3d at 265. If there the is there may be See Louis Vuitton, in turn refers the famous mark."). If there the famous evidence of a dilution by blurring 507 F.3d at 264 to the public's the famous mark identifies a single is source of evidence recognition the product that the association is likely to harm the reputation of the Marks, may be a dilution by tarnishment claim. § Assuming the Rosetta Stone Marks were distinctive since 2004, of likely to impair the distinctiveness the Rosetta Stone Marks, that Google likely to impair the distinctiveness Louis Vuitton, § that trademark dilution claim that the association famous marks or is claim. finds imposed for Google's between the marks that adopts Rosetta Stone nonetheless element of marks. Court trademark dilution. Even if § the there 1125(c). famous and the Court sees no evidence of dilution by blurring when Rosetta Stone's brand awareness has only increased since Google revised its trademark policy in 2004. The TDRA allows courts to consider the degree of recognition of a famous mark when determining whether that mark's distinctiveness has been impaired. 44 § 1125 (c)(2)(B). The Fourth Circuit has also found that no claim for dilution by blurring exists where a defendants' public 507 identification of F.3d at 264 the plaintiffs' (finding no defendant's marks and caused an increase Here, Rosetta Stone's 111:6-12 Mot. & "Chewy Vuiton" in 2005 112:1-7, Summ. J. 6 & Ex. 26-27; 75% in 2009. PL's equity also increased from 19% Decl. Ex. 32, Ex. distinctiveness impaired, 69 of at Louis Vuitton, dog toy parodied plaintiff's in plaintiff's 30-34, increases dilution by blurring brand awareness has to only marks. likelihood of where 2004-from 15% product Ex. 60 brand recognition). only (Caruso Decl. at Ex. 131:6-132:6; Opp'n 24.) Its in 2005 to 95% 120:21-122:8.) Thus, the Rosetta Stone Marks has and Rosetta Stone cannot increased since 69 at Def.'s brand awareness in 2009. (Caruso the not been show that Google's trademark policy likely caused dilution by blurring. The Court also is no evidence that finds no dilution by tarnishment when there those who purchased the allegedly counterfeit software had a reduced opinion of Marks. at (Caruso Decl. 111:6-17 & 120:21-122:8; A at Dubow Dep. 25:10-22, Exs. 45:1-46:2, Porter Dep. 31-33, Ex. Lien Decl. 60 at 131:6-132:6, Ex. Jeffries Dep. 41:15-42:8, the Rosetta Stone Thomas 1; Spaziano Decl. 40:11-41:20, Dep. Ex. 69 Tab Doyle Dep. 29:19-30:17.) The five individuals who allegedly purchased counterfeit Rosetta Stone products attested to their positive 45 impression of the brand. Dep. (Spaziano Decl. 40:11-41:20, 30:17.) Thus, Tab A at Dubow Dep. Porter the not been impaired, Dep. 41:15-42:8, reputation of and Rosetta 45:1-46:2, Thomas the Rosetta Stone cannot Dep. Jeffries 29:19- Stone Marks show that Google's trademark policy likely caused dilution by tarnishment. Rosetta Stone has not shown that distinctiveness or reputation, Google's policy of auctioning its Marks For these reasons, favor of Google The Clerk is directed Alexandria, it law. grants summary judgment in I-VI. to forward a copy of the Memorandum oTu\ day of August 2010. Virginia of resulted from Opinion to counsel. Entered this loss CONCLUSION the Court on Counts Since as keyword triggers, is not entitled to judgment as a matter of IV. suffered a which it claims the Marks has /s/ Gerald Bruce Lee United States District Judge 46
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