Documente Academic
Documente Profesional
Documente Cultură
IN THE
United States Court of Appeals
FOR THE FOURTH CIRCUIT
__________________________
v.
GOOGLE INC.,
Defendant-Appellee.
__________________________
Clifford M. Sloan
Mitchell S. Ettinger
Jennifer L. Spaziano
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1440 New York Avenue NW
Washington, DC 20005
Phone Number: 202.371.7000
Email: cliff.sloan@skadden.com
TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................... iii
INTRODUCTION .....................................................................................................1
i
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CONCLUSION........................................................................................................32
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TABLE OF AUTHORITIES
Cases Page(s)
Anheuser-Busch, Inc. v. L & L Wings, Inc., 962 F.2d 316 (4th Cir. 1992) ...............4
Austl. Gold, Inc. v. Hatfield, 436 F.3d 1228 (10th Cir. 2006) ...................................3
CareFirst of Md., Inc. v. First Care, P.C., 434 F.3d 263 (4th Cir. 2006) .................9
GEICO v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2004) ...............................25
General Analytics Corp. v. CAN Ins. Cos., 86 F.3d 51 (4th Cir. 1996) ..................22
Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (1982)....................................24
Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700 (3d Cir. 2004) ..............................14
Perini Corp. v. Perini Constr., Inc., 915 F.2d 121 (4th Cir. 1990) .........................16
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Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808 (7th Cir. 2002) ...............4, 5
Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009) ..............................27
Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455 (4th Cir. 1996) ...........14, 17, 18
Schering Corp. v. Pfizer Inc., 189 F.3d 218 (2d Cir. 1999) ....................................15
Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992)........................21
Shakespeare Co. v. Silstar Corp. of Am., 110 F.3d 234 (4th Cir. 1997) ...................6
Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2010),
cert. denied, 562 U.S. --- (Nov. 29, 2010)............................................. passim
15 U.S.C. § 1115................................................................................................11, 12
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INTRODUCTION
The judgment for Google should be vacated for the reasons
Rosetta Stone set forth facts showing genuine issues for trial. In concluding
opinion, presumably recognizing the District Court’s analysis cannot stand. Then,
in presenting its own arguments, Google mischaracterizes this case. Rosetta Stone
brought this case to stop Google’s auction and sale of the Rosetta Stone Marks to
third parties for use as keywords and in the content of their sponsored links.
Google, however, asserts that Rosetta Stone challenges not only these uses of its
Marks, but all uses of the Rosetta Stone Marks on the Internet. GB at 2. Rosetta
the Internet, but Google’s auction and sale of the Rosetta Stone Marks, which is
likely to confuse consumers and dilute the Marks, violates established trademark
law.
Google – not Rosetta Stone – seeks a special rule of trademark law for
the Internet. Google argues that the Internet practices challenged here could cause,
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at most, initial interest confusion, GB at 12, 15-17, even though the Lanham Act
decades, should not apply to its practices on the Internet. GB at 21-22. Finally,
stores can trigger trademark liability, but argues that uncertainty on the part of
Court’s analysis, its own analysis suffers from the same infirmities: Google
the facts in the light most favorable to Google, downplays the evidence presented
by Rosetta Stone, and, ultimately, asks this Court to weigh the facts and find in
Google’s favor.
Among other things, Google asks this Court to ignore (i) the search-
results pages that appear on Google’s website when a user queries a Rosetta Stone
Mark; (ii) Google’s own extensive involvement in the sponsored link campaigns of
its customers; (iii) Google’s own internal studies showing user confusion; and (iv)
Google’s carefully designed business model by which it profits every time a user
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“clicks” on any sponsored link that appears, as a result of Google’s auction and
selection, when a user queries a Rosetta Stone Mark. Because triable issues of
material fact exist with respect to these issues, and many others, the District
ARGUMENT
trademark infringement are met and that the only open issue is whether Google
used the Rosetta Stone Marks in a manner likely to confuse consumers. Rosetta
summary judgment to Google. RSB at 19-42. Google’s brief does not support a
different conclusion.
“depends by its nature on initial interest confusion,” which Google asserts is not
1
“Initial interest confusion in the internet context derives from the unauthorized
use of trademarks to divert internet traffic, thereby capitalizing on a trademark
holder’s goodwill.” Austl. Gold, Inc. v. Hatfield, 436 F.3d 1228, 1239 (10th Cir.
2006). It “occurs when a customer is lured to a product by the similarity of the
mark, even if the customer realizes the true source of the goods before the sale
(cont'd)
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importantly, Rosetta Stone’s claim does not depend on initial interest confusion.
L & L Wings, Inc., 962 F.2d 316, 318 (4th Cir. 1992) (citation omitted).
who were misled by sponsored links on Google search-results pages for “Rosetta
Stone” into believing the sponsored link was endorsed or affiliated with Rosetta
Stone and that they were purchasing genuine Rosetta Stone product. JA(41)-4592-
show merely “initial interest confusion”; it proves actual confusion regarding the
________________________
(cont'd from previous page)
is consummated.” Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808, 812
(7th Cir. 2002). “What is important is not the duration of the confusion, it is the
misappropriation of . . . goodwill.” Id. at 812-13.
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Indeed, Rosetta Stone did not even mention initial interest confusion
in its opening brief until page 34, where it noted that, “[i]n addition to providing
added). Thus, a fundamental premise of Google’s brief – that only initial interest
Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005), it has not rejected the
doctrine. Id. at 316-18. Rather, Lamparello left open the question of whether the
doctrine applies in cases, such as this, where the defendant uses the plaintiff’s mark
Rosetta Stone submits that the cases that have applied the doctrine in
such situations were correctly decided, see id.; RSB at 34 n.11; supra note 1, and
that initial interest confusion should be recognized here because Google profits
misappropriating Rosetta Stone’s goodwill for its own financial gain. See
Promatek, 300 F.3d at 812-13; Dkt. 78-1. Regardless whether the Court adopts the
traditional confusion.
5
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copies a protected mark applies “only where defendants have copied a mark to sell
their own counterfeit or competing goods.” GB at 39. This Court, however, has
stated that the presumption arises “when the copier inten[ds] to exploit the good
of Am., 110 F.3d 234, 237 (4th Cir. 1997) (quotation omitted). Rosetta Stone
created by the Rosetta Stone Marks (and other trademarks it sells) in 2004, when it
decided to permit its customers to bid on the Marks, and again in 2009, when it
decided to permit certain customers to use the Marks in their sponsored links.
confusion “does not apply here” because “Google does not provide competing or
pages sponsored links for counterfeit goods and allows those sponsored links to
use the Rosetta Stone Marks as keyword triggers and in their text. These
6
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which confusion has been presumed, both of which are present here: (i) using
identical marks on the same goods; and (ii) using a trademark in whole or in part in
conclusion that Google’s practices are not likely to confuse consumers cannot be
sustained.
facts as undisputed, and asks the Court to view the facts in the light most favorable
judgment.
Google presents its sponsored links in artificial isolation and out of context,
addressing separately “ads that do not violate Google’s policies,” GB at 18-33, and
7
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“ads for counterfeit products,” GB at 33-40. Google thus frames the confusion
www.learningsofts.com), and reseller sites (Barnes & Noble, Staples, and J&R
8
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consumer.” CareFirst of Md., Inc. v. First Care, P.C., 434 F.3d 263, 271 (4th Cir.
2006) (citation omitted); see also Johnson & Johnson Vision Care, Inc. v. 1-800-
Contacts, Inc., 299 F.3d 1242, 1248 (11th Cir. 2002) (“a court must analyze the
message conveyed in full context” and “must view the face of the statement in its
entirety, rather than examining the eyes, nose, and mouth separately and in
presentation thus is flawed – the Court may not look at each sponsored link, but
stated trademark policies. Google asserts that the Court first should consider
whether the use of the Rosetta Stone Marks to refer to the company or its products
is actionable, then determine whether the use of the Marks in sponsored link text
constitutes infringement, and finally assess whether keyword bidding infringes the
Marks. GB at 17-40.
In fact, Google does not restrict its sale of the Rosetta Stone Marks to
purchasers that are lawfully referring to Rosetta Stone or its products – in practice,
it allows anyone to bid on and buy the Marks and to have their sponsored links
9
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Google’s trademark policies purport to restrict the actual use of the Rosetta Stone
Marks in sponsored link text to customers that are lawfully referring to Rosetta
regularly allows counterfeiters to display sponsored links that use the Marks in
their text, including counterfeiters who have been previously identified to Google
4757.2 Moreover, because sponsored links using the Rosetta Stone Marks appear
21-26. It considered the three “disputed” factors – actual confusion, intent, and
explained in Rosetta Stone’s opening brief, all nine factors favor confusion.
2
Google merely looks for the presence of certain words or phrases, such as
“counterfeit,” in the sponsored link text or the advertiser’s website – a practice
that, to say the least, a jury might find not to be a serious effort to avoid
allowing counterfeiters to use trademarks in sponsored link text. See JA(41)-
4655-4656, 4661-4663, 4698, 4706-4708, 4755-4757.
10
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the mark), 2 (similarity of the marks), 3 (similarity of the goods and services the
marks identify), 4 (similarity of the facilities the parties use in their businesses), 5
(similarity of the advertising the parties use) and 8 (quality of the defendant’s
product) all favor a finding of confusion. Instead, Google argues that these
its practices, under the guise of a carve-out for “online ad text,” that has no basis in
the law, and certainly no warrant in the Lanham Act. To the extent Google seeks
to raise a “fair use” defense, see 15 U.S.C. § 1115(b)(4), it can present that defense
at trial, where a fact-finder can resolve the disputed issues. But Google’s fair use-
converted into a broad shield of statutory immunity that protects it against the
consequences, for example, of its extensive publication of the Rosetta Stone Marks
3
For this reason, concerns about free expression raised in amicus briefs
supporting Google from advocacy groups are misplaced. Dkt. 113, 114.
Congress addressed these concerns in the fair use provision of the Lanham Act,
(cont'd)
11
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the six undisputed factors, all of which strongly favor confusion, is no more
understates and misconstrues this evidence. In discussing “ads that do not violate
Google’s policies,” Google addresses only the expert confusion study and
34-37. When it discusses its use of the Rosetta Stone Marks as keywords, Google
evidence supports the conclusion that Google’s use of the Rosetta Stone Marks is
________________________
(cont'd from previous page)
15 U.S.C. § 1115(b)(4), which Google has not advanced as a basis for summary
judgment.
12
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with companies they believed were sponsored by Rosetta Stone and to buy what
they thought was genuine Rosetta Stone product but that, in fact, was counterfeit
JA(33)-698.
testimony of these consumers, Google does not contest the substance of their
Imagination Entertainment Ltd., 575 F.3d 383 (4th Cir. 2009), Google suggests
that in weighing this evidence, the Court should consider the “100,000,000 ads
Court’s holding, however, falls short. Google seeks to compare the number of
Rosetta Stone’s actual confusion witnesses (the maximum number permitted by the
District Court’s deposition limits) to the largest possible universe Google can
invoke – the total number of sponsored links (without even mentioning that
says nothing about the actual number of sales to other entities (including
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counterfeiters) through the relevant sponsored links, or about the number of users
significant that Rosetta Stone was able to identify any consumers who were
Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 720 (3d Cir. 2004) (emphasis added)
(citation omitted). While Google notes that Kos is not controlling, GB at 35, it
does not address the logic of Kos and ignores Sara Lee Corp. v. Kayser-Roth Corp.,
81 F.3d 455 (4th Cir. 1996), in which this Court made the same point: “[I]ndeed,
we can but wonder how often the experiences related by the trial witnesses have
been repeated – but not reported – in stores across the country.” Id. at 466-67.
Rosetta Stone (which was absent in George & Co.), and Google’s factual rebuttal,
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from Google’s practices and concluded that “17 percent of consumers demonstrate
RSB at 33-34. Google apparently agrees, as it does not rely on the District Court’s
design and methodology. Id. These alleged deficiencies bear on the weight a fact-
finder could give the survey; they provide no basis for discarding this evidence of
confusion at the summary judgment stage. See, e.g., Schering Corp. v. Pfizer Inc.,
189 F.3d 218, 228 (2d Cir. 1999) (“[E]rrors in methodology [] properly go only to
Google also asks this Court to reinterpret the Van Liere report,
asserting that “the survey data reveals that participants were not actually confused
by Sponsored Links.” GB at 26. Google argues that Dr. Van Liere’s conclusions
questions the way Dr. Van Liere counted confusion and subtracts from Dr. Van
Liere’s results the sponsored links that Google deems “purely referential.” Id.
While Google would be free to argue these points to a jury, summary judgment
15
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requires that the Van Liere report be viewed in the light most favorable to Rosetta
Stone. See, e.g., Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 124 (4th Cir.
1990).4
confusing. One set of studies demonstrates that Internet users frequently cannot
distinguish between sponsored links and organic search results (especially with
regard to the sponsored links at the top of the search-results pages). JA(41)-4298-
4360; JA(46)-5257-5275. Google states without any support that these studies
GB at 29. This assertion contradicts Google’s assurances to its users that its
organic search engine identifies the most relevant sites in response to user queries.
JA(2)-28. A user who is “unable to differentiate [the top sponsored links] from
16
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believes that the top sponsored link is the top – i.e., most relevant – organic search
result.5
A second set of studies shows that Internet users are confused by the
these studies are irrelevant because they “tested neither the limited use of
trademarks permitted by Google’s 2009 policy nor any ads using Rosetta Stone’s
marks.” GB at 28. Rosetta Stone, however, does not challenge Google’s carefully
conclusions reached in Google’s studies were not mark-specific, and Google relied
not tell that three of the sponsored links displayed on a Google search-results page
for “Rosetta Stone” were not resellers of genuine Rosetta Stone software. JA(46)-
5699-5707, 5805-5811. Google argues that these witnesses were not confused –
they were merely uncertain. GB at 36. But this Court expressly recognized in
466.
5
Google recently changed its practices and now uses the term “ads” instead of
“sponsored links” on its search-results pages.
17
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witnesses there were “consumers in stores, ready to make a purchase, with access
to the actual products.” GB at 36. Here, again, Google seeks a special carve-out
stores with access to the actual products. They involve consumers faced with
Nothing in the Lanham Act removes the resulting confusion from the scope of the
statute. Google also argues that the witness testimony in Sara Lee was “coupled
with numerous other instances of actual confusion and surveys showing thirty to
forty percent confusion.” GB at 36. So, too, here – Rosetta Stone proffered
question presented, asserting that Rosetta Stone “lack[s] any evidence that Google
Rosetta Stone products.” They include, for example, Google’s repeated sale of the
18
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Rosetta Stone Marks to counterfeiters even after Rosetta Stone complained about
In any event, the record shows that Google implemented its trademark
policies despite (i) its own studies showing high levels of confusion and (ii)
thousands of complaints about the infringing nature of its conduct. RSB at 38.
them, id. at 30-31, which the District Court correctly denied, finding them
even if admissible, the jury could not draw any conclusions from these complaints
the jury, however, is a matter for the District Court to handle at trial; it does not
19
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these facts – or the District Court’s failure to consider them – in its brief. GB at
32-33.
product that are not protected under trademark law – it does not create immunity
from a trademark infringement claim for alleged infringers who claim that certain
features are functional to their own products. RSB at 42-45. Three of the amicus
briefs filed in support of Rosetta Stone, including the brief filed by the
great detail the flaws in the District Court’s analysis of the functionality doctrine.
Rosetta Stone and these amici, except to say that “no legal principle” justifies
narrowly construing the doctrine. GB at 42. Rosetta Stone and the amici, however,
do not seek to narrowly construe the doctrine: the doctrine itself has no application
to the facts here. As the Ninth Circuit held when faced with the exact argument
adopted by the District Court, “[t]he fact that the marks make defendants’
Netscape Commc’ns Corp., 354 F.3d 1020, 1031 (9th Cir. 2004).
20
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Circuit “briefly touched upon functionality” in Playboy, but suggests the decision
is questionable because the Ninth Circuit did not address the purported
“inconsistencies” with its prior decision in Sega Enterprises Ltd. v. Accolade, Inc.,
Playboy, as here, the alleged infringer argued that using the trademark owner’s
trademark would make the alleged infringer’s product more functional. In Sega,
the alleged infringer argued that the trademark owner’s trademark was a functional
feature that must be included in a video game program in order for the game to
In short, all the authorities cited by both parties (and the amici)
support the same conclusion: the Rosetta Stone Marks are not functional within
District Court itself expressly recognized the facts that precluded summary
21
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judgment. Id. Google’s response does not support its assertion that these facts
continuing to supply its products to customers it knew or had reason to know were
inducement, Google does not dispute that Rosetta Stone presented evidence
showing Google’s awareness of the infringing nature of its sponsored links and
use trademarks, including the Rosetta Stone Marks, in sponsored link text. RSB at
46-47. Instead, Google argues that these facts are not sufficient to demonstrate the
distinguishable, however, does not mean that Rosetta Stone failed to proffer
General Analytics Corp. v. CAN Ins. Cos., 86 F.3d 51, 54 (4th Cir. 1996)
22
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argues that such evidence is insufficient under Tiffany (NJ) Inc. v. eBay, Inc., 600
F.3d 93 (2d Cir. 2010), cert. denied, 562 U.S. --- (Nov. 29, 2010), to establish the
following a fully litigated bench trial, that eBay was not liable for the sale of
that eBay was supplying its service to individuals who it knew or had reason to
know were selling counterfeit Tiffany goods.” 600 F.3d at 109. As Google
(emphasis added); see also Tiffany, 600 F.3d at 107. Here, in contrast, Rosetta
individuals were selling counterfeit Rosetta Stone goods and Google’s continued
23
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sale of the Rosetta Stone Marks to such individuals. See JA(29)-640-641; JA(33)-
consisting of, among other things, “some 4,000 employees ‘devoted to trust and
infringement’ and 70 who ‘work exclusively with law enforcement.’” 600 F.3d at
98. In sharp contrast, Rosetta Stone showed that the resources Google devotes to
employees, Google devotes just 150 man hours per week (less than four employees)
6
To the extent Tiffany stands for the proposition that “general” knowledge may
never be sufficient for secondary trademark liability, it conflicts with venerable
principles and precedents. See, e.g., Coca-Cola Co. v. Snow Crest Beverages,
Inc., 64 F. Supp. 980, 989-90 (D. Mass. 1946) (Wyzanski, J.), aff’d, 162 F.2d
280 (1st Cir.), cert. denied, 332 U.S. 809 (1947) (knowledge of widespread
infringing activity may be sufficient for secondary trademark liability), cited
with approval in Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854
(1982).
24
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sponsored links and there have been many instances where Google has taken no
judgment.
evidence showing that Google controls the selection and appearance of the
sponsored links that appear on its search-results pages and the use of the Rosetta
4658-4659. Google asserts that it does not “act in concert to create counterfeit
goods” and that it “has no control over counterfeiters’ websites,” but it does not
address its joint ownership and control of the infringing sponsored links. GB at
erroneous. See GEICO v. Google, Inc., 330 F. Supp. 2d 700, 705 (E.D. Va. 2004).
on dilution based on its conclusions that (i) because Google does not sell language
learning software, its use of the Rosetta Stone Marks constitutes a “fair use” within
the meaning of the dilution statute and (ii) Rosetta Stone cannot demonstrate
25
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dilution because its brand awareness has increased since 2004. RSB at 53-57. As
explained in Rosetta Stone’s brief and in the briefs filed by amici, neither of these
conclusions is sustainable under established trademark principles. See id.; Dkt. 37-
use” argument, and thereby triggering a fair use analysis that cannot be resolved on
summary judgment on this record. RSB at 53-54.7 Instead, Google argues that it
cannot be held liable for dilution because it “does not use the Rosetta Stone marks
on Google’s own goods and services.” GB at 54. But 15 U.S.C. § 1125(c)(1) does
not require that the defendant use the plaintiff’s mark on its own goods and
services; it requires that the defendant use the plaintiff’s mark in commerce. See
Dkt. 38-1 at 19-23. Google does not dispute that it uses the Rosetta Stone Marks
in commerce.
To support its argument, Google cites only Tiffany. There, the Second
Circuit held that because eBay did not sell the goods at issue, “it did not itself
engage in dilution.” Tiffany, 600 F.3d at 112. Unlike eBay, however, Google uses
the Rosetta Stone Marks – it sells the Rosetta Stone Marks to third parties and
selects and displays a limited number of sponsored links on its search-results pages
7
Indeed, Google concedes that at least some of its uses of the Rosetta Stone
Marks are not fair uses under the dilution statute. See GB at 54.
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when a user queries a Rosetta Stone Mark. Indeed, prior to Tiffany, the Second
Circuit held that Google’s use of trademarks constitutes a use in commerce under
the Lanham Act. Rescuecom Corp. v. Google Inc., 562 F.3d 123, 129-30 (2d Cir.
matter of law, claiming that the Court was merely acknowledging an interesting
“trend.” GB at 55. The purported absence of actual dilution, however, was the
basis for the District Court’s ruling. JA(29)-652. As explained in Rosetta Stone’s
brief and the briefs of various amici, a plaintiff need not prove actual dilution to
succeed on a trademark dilution claim. RSB at 54-56; Dkt. 37-1 at 13-17; Dkt. 38-
1 at 23-27.
Because the District Court focused only on the current strength of the
Rosetta Stone Marks, it failed even to consider the cases in which courts have
found dilution where, as here, the defendant has used the plaintiff’s mark and the
plaintiff’s mark has been linked to counterfeit products. See, e.g., PETA v.
Doughney, 113 F. Supp. 2d 915, 920 (E.D. Va. 2000), aff’d, 263 F.3d 359 (4th Cir.
2001); Diane Von Furstenberg Studio v. Snyder, No. 1:06cv1356 (JCC), 2007 U.S.
8
To the extent Tiffany stands for the proposition that a defendant that does not
itself sell the goods at issue cannot be held liable for trademark dilution, see GB
at 54, it conflicts with the plain language of § 1125(c)(1).
27
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Dist. LEXIS 66633, at *11 (E.D. Va. Sept. 10, 2007).9 Google argues that PETA
and Von Furstenberg are inapposite because they involved defendants that used the
Google again misses the mark. These cases stand for the proposition that either
using the plaintiff’s mark or linking the plaintiff’s mark to counterfeit products
presented evidence that Google uses the Rosetta Stone Marks in each of these ways.
because “Rosetta Stone” was not a famous mark in 2004. GB at 56-57. Google
suggests that, because “Rosetta Stone” had not achieved general fame in April
2004, when Google started its practice of auctioning trademarks, Google cannot be
held liable for any blurring or tarnishment of the Rosetta Stone Marks that has
resulted from Google’s practices since then. Id. Google’s argument is without
merit.
9
Google’s assertion that Rosetta Stone somehow “waived” any argument based
on the District Court’s failure to properly analyze dilution is groundless. GB at
55. Rosetta Stone plainly raised this issue in its briefing below, citing both the
statute and relevant case law. JA(32)-688-689; JA(44)-5158-5160; JA(52)-
6522-6523. Moreover, “the [statute] directs the court to consider all factors
relevant to the issue, including six factors that are enumerated in the statute.”
Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 266 (4th
Cir. 2007).
28
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the Rosetta Stone Marks in sponsored link text in 2009 – when even Google
recognizes the Rosetta Stone Marks were famous. JA(41)-4676. Finally, this case
involves Google’s auction and sale of the Rosetta Stone Marks on an ongoing basis.
Google thus “commences” use of the Rosetta Stone Marks in commerce each time
enrichment claim for two reasons: (i) the Amended Complaint alleged facts that
plausibly stated an unjust enrichment claim and (ii) the Communications Decency
alleges that Google (i) used the Rosetta Stone Marks without Rosetta Stone’s
29
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authorization; (ii) sold the Marks as keyword triggers for third-party advertising;
and (iii) retained profits from those sales without paying Rosetta Stone for the
Google further argues that Rosetta Stone did not have a reasonable
expectation of compensation because “Rosetta Stone did not plead any facts to
support a claim that Google typically paid trademark owners for AdWords
revenue” or that “Google led Rosetta Stone to believe Google would pay for use of
argues that because it brazenly uses all trademarks without any subjective intention
of paying for the value that it receives in doing so, no one can state a claim against
plaintiff need only demonstrate that the defendant should reasonably have expected
to pay the plaintiff for the benefit taken. RSB at 58. The Amended Complaint
alleges facts plausibly suggesting that Google reasonably should have expected to
pay Rosetta Stone for the benefits it reaped from its sale of the Rosetta Stone
Marks. JA(8)-196-197. Indeed, the record shows that Google (i) began selling
“[s]ignificant potential revenue impact,” JA(41)-4265, and (ii) knew that it might
30
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have to pay trademark owners for auctioning their marks as it warned investors of
the potential adverse financial consequences that might result from lawsuits by the
protections because it has structured its AdWords program so that it gets paid when
a user actually clicks on a sponsored link. GB at 57-58. But how Google gets paid
is beside the point as the practice at issue here is Google’s auction and sale of
trademarks as keywords – conduct to which the CDA does not apply regardless of
enrichment claim was improper given the extensive allegations of Google’s active
responding to this argument, Google discusses only its Keyword Tool, asserting
that the tool “does not create the content of the advertisements.” GB at 59.
involvement in creating content, including evidence that Google tells its customers
to “put the keywords that trigger the ad in the ad’s headline and description” and to
10
Thus, Google’s assertion that “Rosetta Stone did not argue any additional
factual points” in connection with summary judgment briefing, GB at 61, is
incorrect.
31
Case: 10-2007 Document: 137 Date Filed: 12/13/2010 Page: 37
CONCLUSION
This Court should reverse the District Court’s orders and remand this
32
Case: 10-2007 Document: 137 Date Filed: 12/13/2010 Page: 38
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