TM LAW and ADWORDS andMETATAGS
AIPPI Congress October 22 Workshop V
Prof. Charles Gielen, NautaDutilh, Amsterdam, NLchair
Mincheol Kim, Knobbe Martens, Irvine, USSara Ashby, Redd, London, UK
Emmanuel Larere, Gide, Paris, France
Programma
1. Technical background (Mincheol)2. TM owner v. advertiser
– European viewpoint on confusion (Emmanuel) anddilution (Sara)
– US and Korean viewpoint (Mincheol)3. TM owner v. host
– European viewpoint (Sara)– Application in France (Emmanuel)– US viewpoint (Mincheol)
4. Q and A
Technical BackgroundTechnical Background
3© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved.
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Metatags
• Metatags (or meta tags)• HTML or XHTML code providing information about a web page
• Internet searching and keyword metatags• In the past, almost all Internet search engines used keyword metatags for searching• Keyword metatags are chosen by website owners and could be abused
• What if “NIKE” is inserted as keyword meta tag• For a website selling NIKE and other shoes• For a website of a show maker unrelated to NIKE
• In 2009 Google and Yahoo! announced• They would no longer use “keyword metatags” to produce search results• Google uses information from “description metatags” for its internet searches
<HEAD><TITLE>This is the Web Page Title</TITLE><META name="description" content="This is where you place your web page'sdescription."><META name="keywords" content=“Place, your, keywords, here, separated, by,commas"><META name="language" content=“Language"></HEAD>
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• Google sells keywords for Internet advertisements• One can purchase a term related to its business• When an Internet user searches for the purchased term, a web link to the business
appears on Google’s search results• More than one person can purchase the same term
Keywords -
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Search term
Ads ofSponsoredLinks
Descriptionmeta tag
Naturalsearchresults
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Keywords -
TM Owner v. Advertiser: the Europeanviewpoint
1. Competitor’s use of a “classical”trademark - when is it infringement?
Focus on ECJ Cases Google France, Bergspechte andPortakabin [2010]
ALGIERSBEIJING
BRUSSELSBUCHARESTBUDAPEST
CASABLANCAHANOI
HO CHI MINH CITYHONG KONG
ISTANBULKIEV
LONDONMOSCOW
NEW YORKPARIS
ST. PETERSBURGSHANGHAI
TUNISWARSAW
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Situations tackled in the ECJ cases
Situation 1 - “Pure” utilisation of trademarks as keywords A owns trademark X and B (competitor of A) registers X or
variants of X as “Adword” The ad displayed in the “sponsored links” section contains no
reference to trademark X
Situation 2 - Same as 1, but : B’s website offers second-hand X products The ad displayed in the sponsored links section refers to “used X
products”
Situation 3: - Same as 1, but : B’s website offers imitation versions of X products B registers X as “Adword”, in combination with terms like
“imitation” or “copy”
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The legal background
A trademark owner is entitled to prohibit a party from using, without hisconsent, a sign identical with or similar to that trademark, when : That use is in the course of trade; That use is in relation to goods or services identical with those for which that
trademark is registered; That use is liable to affect the functions of the trademark.
The functions of a trademark include: The function of indicating origin (which is the essential function) The function of guaranteeing the quality of the goods The functions of communication, investment and advertising
If the sign is identical with the trademark The owner may prohibit uses that affect any of the functions
If the sign is similar to the trademark The owner may only prohibit uses that affect the essential function
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When is the function of indicating origin liable to beadversely affected? When the ad does not enable normally informed and reasonably attentive
internet users (or enables them only with difficulty), to ascertain whether thegoods or services referred to by the ad originate from the trademarkowner or from a third party, i.e.: When the ad suggests that there is an economic link with the trademark owner;
or When the ad, while not suggesting the existence of an economic link, is vague to
such an extent, on the origin of the goods or services, that normally informed andreasonably attentive internet users are unable to determine, on the basis of thead, whether the advertiser is a third party vis-à-vis the trademark owner or,on the contrary, economically linked to that owner.
It is for the national court to assess, on a case-by-case basis, whether thefacts of the dispute indicate adverse effects, or a risk thereof, on the functionof origin.
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Application in France
Impact of the GoogleFrance case (dated 23 March 2010) on Frenchcase law
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Application in France: a few examples
French case law tends to consider that the trademark’s functions are notadversely affected when: No reference is made to the trademark in the ad; The name of the advertiser is mentioned in the ad (e.g. in the domain name/link).
For a recent example: French Supreme Court, 25 September 2012, Auto IES
Examples of cases involving reproduction of a trademark in the ad, by a reseller/ spare parts seller :
Trademark Competitor’s Ad Case Outcome
PCM (hydraulic pumps) PCM Pumpswww.pump-hero.com(The website only sold compatible spare parts)
Referencing prohibited.TGI Paris, 10-11-2011
Pandora (jewels) www.bijoux-online.frPANDORA jewels Discover the world of do-it-yourself jewels.
Referencing authorized.TGI Paris, 29-02-2012
Weston (shoes) Weston shoes. Greatest brands at low prices.www.shopping.com(The website actually did not sell any Weston shoes)
Referencing prohibited.TGI Paris, 15-12-2011
Weston (shoes) Weston shoes at low prices. Buy & sell. www.eBay.fr Referencing authorized.TGI Paris, 26-06-2012
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Application in France: the “simultaneity” issue
Google France case (Point 85):“In a situation which is characterised by the fact that the ad appearsimmediately after entry of the trade mark as a search term by the internet userconcerned and is displayed at a point when the trade mark is, in itscapacity as a search term, also displayed on the screen, the internet usermay err as to the origin of the goods or services in question.In those circumstances, the use by the third party of the sign identical with themark as a keyword triggering the display of that ad is liable to create theimpression that there is a material link in the course of trade between thegoods or services in question and the proprietor of the trade mark.”
Applications in France French Supreme court, 29-11-2011, PCA / Suza TGI Paris, 15-12-2011, Weston / Shopping.com But TGI Paris, 2 February 2011, Auto IES “The fact that the ad is displayed at a
point when the trade mark is, in its capacity as a search term, also displayed onthe screen, does not, by itself, cause the internet user to err as to the origin of thegoods or services”.
TM Owner v. Advertiser: the Europeanviewpoint
2. Competitor’s use of a trade mark witha reputation – when is it infringement?
Focus on ECJ CaseInterflora v Marks and Spencers
Interflora v Marks and SpencersGoogle Adwords advertising caseAdwords:
• INTERFLORA• INTERFLORA FLOWERS• INTERFLORA DELIVERY• INTERFLORA.COM
Advertisment:“M&S Flowers Onlinewww.marksandspencer.com/flowersGorgeous fresh flowers & plantsOrder by 5pm for next day delivery”
Referral to European Court of Justice byHigh Court, London
Evidence: Interflora’s advertising costs up by $750,000 p.a. Cost per click up from 2p per click to 23 – 28p per click It now took 3.75 click-throughs (on average) to obtain an
order where previously it took 3.37 The word INTERFLORA was the fifth most frequent “paid
click” driving traffic to M&S’ websiteM&S would make about £1.1million sales to customers who
had placed an order following clicking through from anINTERFLORA keyword search
Adverse effect on origin function? Google France appliedInfringement? If the facts show that users are misled into thinking M&S’
services are part of Interflora’s commercial network (becauseusers cannot tell whether M&S is economically linked toInterflora) then origin function adversely affected.
The national court will need to assess:1) whether in the basis of the general knowledge of the
market users are aware M&S is not part of the Interfloranetwork but is in competition with it
2) if that is not generally known, whether the advertenabled a user to tell that M&S was not part of thenetwork
Investment functionUse of a trade mark to acquire or preserve a
reputation capable of attracting consumers andretaining their loyalty.If the trade mark already has a reputation, keyword
use which affects that reputation or jeopardises itsmaintenance adversely affects this functionBut the mere fact that keyword use means some
consumers switch brands, or the trade mark ownerhas to adapt his efforts to acquire and preserve areputation is not enough
Trade marks with a reputationInterflora is a mark with a reputationTrade marks with a reputation are protected fromthree types of injury which are independent of theorigin function:1)use which is detrimental to the distinctive characterof the mark = “dilution”2) use which is detrimental to the repute of the mark =“tarnishment”3)Use which takes unfair advantage of the distinctivecharacter or repute of the mark = “free-riding”
Detriment to distinctive character – “dilution”Use reduces the mark’s ability to distinguish goods, so the trademark no longer capable of creating an immediate association in theminds of consumers with a specific commercial origin Interflora arguing M&S’ use gradually means users think the
word INTERFLORA is generic, for any flower-delivery service The European Court said that
• even if the national court finds there has been an adverseeffect on the origin function (because the advertising doesnot enable users to tell that M&S’ service is independentfrom the Interflora network)
• the national court would still have to consider whether as aquestion of fact has had such an impact on the market forflower delivery services that the word “interflora” has cometo designate any flower delivery service.
Unfair advantage – “free riding”
Where an advertiser rides on the coat-tails of amark with a reputation to benefit from its power ofattraction, reputation and prestige, and exploits thetrade mark owner’s marketing efforts the createand maintain the image in the mark, without payingfinancial compensation or having to make its ownmarketing efforts
On the facts?where a mark has a reputation it is likely a large
number of users will use the name as a search termwhere a competitor uses that word as a keyword,
the purpose is to take advantagea large number of people will see the competitor’s
advertwhen the competitor makes a sale, it derives a real
advantageand does not pay compensation to the trade mark
owner
Is the use ‘unfair”?
Up to the national court to determineGoogle France is clear that where the competing
goods are imitations of the trade mark owner’sgoods, likely to be “unfair advantage”But if no imitation, no dilution or tarnishment, and
no adverse affect on origin function or otherfunctions, the use “falls within the ambit of faircompetition”
Technical BackgroundTM Owner v. AdvertiserThe US and Korean viewpoint
25© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved.
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• Use in commerce?• Inserting another’s mark as keyword meta tag for its own website• Buying another’s mark for keyword advertising• Inserting another’s mark in advertisement text for its own website
• Theories of liability• Likelihood of confusion• Initial interest confusion• Dilution
• Defenses
Liability of Third Party Advertiser: US and Korea
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• Brookfield Communications• Owner of federally registered mark “MovieBuff”• Business: Searchable movie database services providing entertainment-related
information such as listings of actors, directors, upcoming movies and related news• West Coast Entertainment
• Announced to launch website of searchable database for entertainment-related news• Using “MovieBuff” in metatags of its website
• Brookfield sued West Coast claiming trademark infringement and unfair competition• Brookfield applied for TRO and injunction, both were denied• Brookfield filed an appeal and requested injunction• 9th Circuit granted injunction against West Coast based on initial interest confusion
• No likelihood of confusion• West Coast’s site appearing in the search results for the search term “MovieBuff” will
be unlikely to cause consumer confusion as the searcher will see West Coast’s sitelisted by domain name (e.g., westcoast.com)
• But liable for initial interest confusion• E.g., Fat Burgers (a fast food restaurant) posting a large sign “McDonald’s, exit 7" on
the highway when in fact McDonald’s is at exit 8 and Fat Burgers is at exit 7
Brookfield Comm. V. West Coast Ent.(9th Cir., 1999)
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• Playboy Enterprises• Owner of trademarks: Playboy, Playmate of the Year, and PMOY
• Terri Welles• Welles was the Playmate of the Year for 1981 and on the cover of 1981 Playboy• She maintained a personal website identifying her as such• The website’s metatags included Playboy’s trademarks• The website displayed “Playmate of the Year 1981” and “PMOY ‘81” repeatedly in
headlines, banner ads and wallpaper• Playboy sued Welles claiming trademark infringement and dilution
• District court held the use on the website and metatags are nominative fair use• 9th circuit affirmed
• Nominative use• A type of fair use for identifying the product itself• There was no other practical way for Welles to describe herself without using the
trademarked terms
Playboy v. Welles (9th Cir., 2002)
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• Advanced Systems Concepts• Owner of federally registered mark “ActiveBatch”• Job scheduling and management software
• Network Automation• Selling AutoMate, directly competing product of ActiveBatch• Network purchased keyword “ActiveBatch“ from Google and Bing
• Network sued Advanced, seeking declaration of noninfringement• Advanced counterclaimed trademark infringement and sough preliminary injunction• District court ordered preliminary injunction against Network
• 9th circuit reversed the district court decision• Likelihood of confusion not sufficient to support trademark infringement• Appearance of the advertisement - The advertisements for Google and Bing were
labeled as “Sponsored Links” and separated from the natural search results• Defendant’s intent - Network was not trying to mislead consumers, but to inform them
of other choices of comparable products
Network Automation v. Advanced Systems Concepts(9th Cir., 2011)
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• Advanced Wave• Owner of Korean registered trademark “VSP”• Voltage surge protectors and suppressors
• Dong Ang Kim• Kim purchased keyword “VSP” from Daum Communications (Korean search engine
operator) for keyword advertising• Kim placed “VSP엔티씨” (VSP NTC) as title of his sponsored link that is listed in the
search results using the keyword• Advanced Wave sued Kim (a scope trial), seeking finding of trademark infringement
• The case went up to the Korean Supreme Court (2010Hu3073)• The Court held no trademark infringement based on dissimilarity of the marks
• Trademark Use• Use of a keyword in advertising text of sponsored links can constitute a trademark use
when the keyword identifies the source of a product or service• Displaying information in internet search results can be advertising
• No Likelihood of Confusion• VSP represents “Voltage Sag Protector” and is a weak mark in connection with goods• VSP엔티씨 differs from VSP in its appearance, sound, and meaning
Advanced Wave v. Kim(Korean Supreme Court, 2012)
TM Owner v. Host: the Europeanviewpoint
Focus on ECJ CaseL’Oreal v eBay
Is there infringement by the “Host”?Google France ECJ decisionNo trade mark infringement by GoogleWhat the host is doing is “in the course of trade”
• Selling keyword advertising is carrying out acommercial activity with a view to commercialadvantage
But the host is not itself “using”• It is allowing its clients to use trade marks in
keyword advertising without itself “using” thetrade mark
What if the competitor sites are sellinginfringing goods or counterfeits?
Potential defence if Google is storinginformation as a “host” under Article 14 of thee-Commerce Directive
Article 14 e-Commerce Directive - Hosting
Where an information society service is provided that consists ofthe storage of information provided by a recipient of the service,Member States shall ensure that the service provider is notliable for the information stored at the request of a recipient ofthe service, on condition that:
a) the provider does not have actual knowledge of illegalactivity or information and, as regards claims fordamages, is not aware of facts or circumstances fromwhich the illegal activity or information is apparent; or
b) the provider, upon obtaining such knowledge orawareness, acts expeditiously to remove or to disableaccess to the information.
Can Google’s activities be classified ashosting?
Only if it has no knowledge of or control over theinformation storedIs its conduct merely technical, automatic, passive?Up to the national court to decide on a case-by-case
basis
What amounts to “knowledge” underarticle 14 of the e-Commerce Directive?
L’Oreal v eBay ECJ decisionFacts: eBay sellers in the UK were selling goods advertised as L’Oreal
perfume products there was infringement by the eBay sellers eBay was also:
• purchasing adwords for the trade mark terms, to advertisethe sellers
• promoting the sellers by sponsored listings• not making information about the identity of sellers
available to L’Oreal
L’Oreal v eBay – ECJ decision
Could eBay (the Host) be exempt from liability?The mere functioning of the eBay marketplace was
not “playing an active role”But, facts:
• sponsored adword (e.g.: on Google)• helped to optimise and promote the sales• gone beyond a neutral position• playing an active role
Not covered by the Article 14 exemption and may beliable
L’Oreal v eBay – ECJ decision To lose the protection of Article 14, eBay must have been
“aware of facts or circumstances from which the illegalactivity or information is apparent”
Satisfied by an objective standard:• “aware of facts or circumstances on the basis of which a
diligent economic operator should have identified theillegality in question”
This covers every situation in which the Host becomes aware,in one way or another, of such facts or circumstances
Up to the national courts to decide whether the Host hadsufficiently precise and adequately substantial information toidentify alleged illegal activities
L’Oreal v eBay – ECJ decision:The operator of an online marketplace:Must take steps to:
• bring infringements to an end• prevent further infringements
Injunction available:may be ordered to take positive steps to prevent infringingsales, or risk facing liability in the courtscannot be required to “actively monitor” all of the data ofeach of its customersMust be “fair and proportionate”, not excessively costlyBut cannot be a blanket ban on sales
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TM Owner v. Host: the European ViewpointApplication in France
France is reputedly the country where disputes between IP right holders andinternet operators are the most frequent Notable evolution of French case law under the influence of the ECJ But no stabilizing effect on French case law
as ECJ case law leaves much room for national courts’ assessment of facts
As far as trademarks are concerned, case law has mostly concerned: The Google Adwords service + a few other search engines operators eBay + a few other vending platforms operators
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GOOGLE ADWORDS (1/2)
French case law before the Google France ECJ case
Google Adwords was regarded not as a host but as an on-line advertisingagency It could not benefit from the specific liability regime for hosts
Google liability regarding the Adwords service Initially, courts tended to hold Google liable for trademark infringement Then, case law evolved:
as judges came to consider that Google used the trademark for serviceswhich were different from those covered by the trademark or supplied by theadvertiser (while similarity is required under article 5(1) of the Directive)
However, Google was still found liable on other grounds: Damage caused to or unfair advantage taken of a reputed trademark (art.
5(2)); or General civil liability for unfair behaviour
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GOOGLE ADWORDS (2/2)
French case law after the Google France ECJ case
1st post Google France decisions Paris Court of Appeal, 19 November 2010, Belle Literie; followed by other similar
judgments Google may not be held liable for trademark infringement either on article 5(1)
or on article 5(2) Google may not be held liable for unfair behaviour as it benefits from the
specific liability regime for hosts
Is the tide turning ? TGI Paris, 17 November 2011, Olivier Martinez / Google and Prima
As regards the Adwords service, Google may not be regarded as a host asits role is not neutral: The mere fact of modifying the order of appearance of the natural results
constitutes an active role Such active role is also evidenced by the Adwords Terms of Use that show
that Google has a power of control over its clients’ choice of Adwords
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eBay (1/2)
French case law before the L’Oreal / eBay ECJ case
Case law was very unstable but the growing trend in French case law was todeny eBay the host status
E.g.: the LVMH / eBay saga Paris commercial court, 30 June 2008:
eBay is not a host eBay is liable for negligence vis-à-vis trademark holders Court orders eBay to pay € 40 million in damages
Paris court of appeal, 3 September 2010 Upholds judgment on the merits but reduces damages to € 6 million
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eBay (2/2)
French case law after the L’Oreal / eBay ECJ case
Case law still extremely unstable !
Grounds underlying pro-eBay judgments eBay merely provides technical and promotional tools and has no control over ads
Grounds underlying anti-eBay judgments eBay plays an active role by providing advice and assistance for ad optimization,
by promoting ads vis-à-vis prospective clients…
eBay 2012cases January 23 March 13 April 4 May 3 June 26Court Paris C.A. Paris TGI Paris C.A. Supreme Court Paris TGI
Plaintiff Burberry Maceo AntiquesDealers Guild
LVMH Weston
Host ? No Yes Yes No Yes
Ground forcondemnation
Undue profits fromillicit merchandise(criminal offence)
N.A. N.A. Negligence N.A.
Technical BackgroundTM Owner v. Internet HostThe US viewpoint
45© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved.
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• Internet Hosts• Internet search companies – Google, Yahoo, Bing• Internet marketplace businesses – Amazon, eBay
• Use in commerce• Selling TM owner’s mark to third party as keyword for keyword advertising• Searching advertisements with the sold keywords and displaying sponsored links
• Theories• Direct Infringement• Contributory Infringement• Vicarious Liability• Dilution• Unjust Enrichment
Liability of Internet Hosts: US
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• Playboy Enterprises• Owner of marks: “Playboy” and “Playmate”
• Netscape Communications - Internet search engine operator• Netscape sold and displayed banner ads to adult entertainment companies in
response to searches using the terms “playboy” and “playmate” (keying)• Netscape did not require the source of the banner ads to be identified
• Playboy sued Netscape claiming trademark infringement and dilution• District court granted summary judgment for Netscape• 9th Circuit found genuine issue of material fact regarding infringement and dilution• Summary judgment reversed and the case remanded for further proceeding
• Initial interest confusion• 9th circuit applied this doctrine established in Brookfield v. West Coast• Displaying banner ads of a company similar to Playboy without specifying the source
of banner ads• Despite the consumer’s later knowledge that the products they are purchasing are in
fact not from Playboy, the competitors unfairly profited off of Playboy’s goodwill
Playboy Enterprises v. Netscape Communications(9th Cir., 2004)
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Rescuecom v. Google (2nd Cir., 2009)
• Rescuecom Corp.• Owner of mark “Rescuecom”• Computer repair and support business
• Google• Google AdWords included a “Keyword Suggestion Tool” recommending additional
keywords for an advertiser to purchase• Google recommended the “Rescuecom” trademark to advertisers (including
Rescuecom’s competitors) that were buying keywords through Google’s AdWords• Rescuecom sued Google, claiming trademark infringement
• District court held that Google's use of the Rescuecom trademark did not constitute a"use" under the Lanham Act
• 2nd Circuit vacated the district court ruling and remanded for further proceedings• Later Rescuecom abandoned this suit, and interestingly, Rescuecom was accused of
using Best Buy’s “geek quad” trademark as keyword• Use in commerce
• Required for infringement under the Lanham Act (US Federal Trademark Statues)• Google’s recommendation and sale of Rescuecom’s mark to its advertising customers
are not internal uses and constituted commercial use
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• Tiffany & Co. - Owner of mark “Tiffany” and world-famous branded jewelry company• Some time before 2004 Tiffany learned that counterfeit products were sold on eBay
and communicated such to eBay• eBay - Internet-based marketplace
• eBay facilitates many sales of Tiffany goods, genuine or otherwise• eBay’s effort to reduce the sale of counterfeit items on its website
• eBay’s “fraud engine” automatically finds and removes listings violating eBay policiesincluding counterfeit listings, which includes “Tiffany-specific filters”
• eBay’s “Verified Rights Owner (VeRO)” program allows trademark owners reportpotentially infringing listings to eBay by Notice of Claimed Infringement (NOCI). Uponreceipt of NOCI, eBay would remove listings involving counterfeits, cancel the bids,inform the seller of the reason within 24 hours
• eBay’s advertising to promote sales of premium and branded jewelry• eBay advertised the availability of Tiffany merchandise on its site – “Tiffany,” “Tiffany &
Co. under $150,” “Tiffany Rings,” “Tiffany & Co. under $50”• eBay used Sponsored-Link ads on search engines to read e.g., “Tiffany on e-Bay”• In response to Tiffany’s complaint, eBay told Tiffany that it had ceased buying
sponsored link, but eBay continued the practice indirectly through a third party
Tiffany v. eBay (2nd Cir., 2010)
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• Tiffany sued eBay• Tiffany alleged that eBay’s conduct (advertising the sale of Tiffany goods that turned
out to be counterfeit) constituted direct and contributory infringement, dilution and falseadvertising
• District court decided in favor of eBay on all claims• 2nd Circuit affirmed all except the false advertising claim – eBay won!!!
• Direct infringement - Nominative fair use defense• eBay used the mark to describe accurately the genuine goods offered on its site• None of eBay’s use suggested Tiffany’s affiliation with eBay or endorsement of the
sale of its products on eBay• Contributory infringement
• Liability imposed upon those who facilitate or encourage infringement• Under Inwood Labs. V. Ives Labs., 456 U.S. 844 (1982), (1) one intentionally induces
another to infringe a trademark, or (2) one continues to supply its service to one whomit knows or has reason to know is engaging in trademark infringement
• Tiffany argued that eBay knew or had reason to know that counterfeit Tiffany goodswere being sold ubiquitously on its website in view of Tiffany’s thousands NOCIs
• In reply to Tiffany’s NOCIs, eBay removed listings and suspended repeat offenders• For all other counterfeits eBay continued its services, more than general knowledge of
the sale of counterfeits is needed
Tiffany v. eBay (cont.)
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• Dilution• Tiffany alleged dilution by blurring (impairing distinctiveness of famous mark) and
tarnishing (harming the reputation of famous mark)• eBay never used the Tiffany mark to refer to eBay’s own product, thus no dilution
either by blurring or tarnishing• False Advertising
• eBay’s use of the mark in advertising was not literally false since eBay did sellgenuine Tiffany goods on its website
• But, eBay affirmatively advertised the goods sold through its site as Tiffanymerchandise
• eBay should be accountable for the words it chose to the extent that they misled orconfused consumers
• Reversed and remanded to district court for re-examination of this claim• On remand, district court concluded no additional evidence indicated that eBay’s
advertisements misled or confused customers
Tiffany v. eBay (cont.)
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• Rosetta Stone• Owner of marks: Rosetta Stone, Rosetta Stone Language Learning Success,
Rosettastone.com, Rosetta World• Language-learning software
• Google• Google sold the “Rosetta Stone” trademark to advertisers• Google changed its policy regarding the use of 3rd party trademarks over time• Prior to 2004, Google precluded both use of 3rd party trademarks in the text of an
advertisement and use of such trademarks as keywords• In 2004, Google allows trademark s as keywords even over its owner’s objections• In 2009, Google allows 3rd party trademarks in advertising text in limited situations
• Rosetta Stone sued Google claiming infringement, dilution and unjust enrichment• Google’s policy and the changes of selling its Rosetta Stone marks as keyword and
permitting the marks in advertising text caused likelihood of confusion, actual confusionand misleading Internet users into purchasing counterfeit software
• District Court – Google won over trademark owner• Dismissed Rosetta Stone’s unjust enrichment claim• Granted summary Judgment against Rosetta Stone on all other claims (no genuine
issue of material fact for jury trial)
Rosetta Stone v. Google (4th Cir., 2012)
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• 4th Circuit• Affirmed dismissal of unjust enrichment claim• Affirmed summary judgment on vicarious infringement• Vacated summary judgment on direct infringement, contributory infringement and
dilution and remanded for further proceeding – This revives trademark owners• Direct Infringement
• Google’s intent, actual confusion and sophistication of consumers are disputed out ofthe nine traditional factors for likelihood of confusion
• There is sufficient evidence to create a question of fact on the disputed factors• Summary judgment vacated and remanded
• Contributory infringement• Liability imposed upon those who facilitate or encourage infringement• Issue is whether Google continued its service to known infringers• Rosetta Stone notified Google of about 200 Sponsored Links advertising counterfeit
Rosetta Stone products - Sufficient evidence to establish a question of fact• Summary judgment vacated and remanded
Rosetta Stone v. Google (cont.)
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• Vicarious infringement• Liability based on the defendant’s relationship with a third party infringer• No evidence that Google acts jointly with any of the advertisers to control the
counterfeit Rosetta Stone products• Summary judgment against Rosetta Stone affirmed
• Unjust enrichment• Implied-in-law contract - one renders services and the other accepts without contract• Rosetta Stone failed to show that it conferred a benefit on Google for which Google
should reasonably have expected to repay• Dismissal of the claim affirmed
• Dilution• Federal dilution
• Plaintiff’s mark must be famous at time of first use by defendant• Likely to cause dilution by blurring or tarnishment• No likelihood of confusion or actual injury need be shown
• Google began using Rosetta Stone as keyword in 2004• The fame of Rosetta Stone’s mark should be measured from 2004• Summary judgment vacated and remanded
Rosetta Stone v. Google (cont.)
