Unfortunate: Appeals Court Revives Misguided Rosetta Stone Lawsuit Against Google

from the can't-we-get-this-straight-already?!? dept

There have been a number of silly lawsuits against Google for the fact that companies can buy AdWords ads based on trademarked terms. These lawsuits are problematic on a few different levels. First, using trademarked keywords to trigger ads isn’t infringement. It’s a perfectly reasonable use. In the same way that a supermarket often places coupons for certain brands/products near competing products, advertising competitors is perfectly reasonable. Second, even if there is trademark infringement, it should be limited to the advertiser itself, not to Google, who is merely the platform. Even though a few courts had more or less said this in the past, software company Rosetta Stone decided to sue anyway back in 2009. The lawsuit was dumped pretty quickly, with the court getting the big questions right (though it went a little weird on some of the finer points).

Rosetta Stone appealed, and basically got every company who hates Google to join in on the fun. Not only that, but Rosetta Stone even used its loss as a reason to support SOPA’s predecessor, COICA, saying that Google is “the gateway for criminals into America.”

No, I’m not joking. Rosetta Stone literally said the fact that Google allows competitors to put up ads based on trademarked keywords makes it the (not “a”, but “the”) “gateway for criminals into America.”

Unfortunately, rather than give the company the slap down it deserves, it appears that a somewhat confused appeals court is reviving the case and sending it back to the lower court to reconsider. The reasoning in this 7th Circuit ruling is extremely troubling on a variety of levels.

Quite amazingly, the court actually suggests that there’s a possibility that Google is guilty of direct infringement of Rosetta Stone’s trademarks. This makes no sense. Even if you somehow twisted things to make Google liable in some manner or another, the only possible liability has to be for secondary liability, because it’s not the one directly making use of the trademarks in the first place. It’s providing the platform and the advertisers are using the marks. This is pretty basic stuff, and it makes you wonder the technical literacy of the appeals court panel (or why they presume to judge a case where they clearly don’t understand what they’re talking about).

Another bizarre point is on the question of “intent.” The court accepts much of Rosetta Stone’s argument that because Google changed its policy over time to allow greater usage of trademarked terms, that it had intent to infringe. While that is one possible interpretation, there are much more sensible explanations that aren’t so nefarious. Google stopped allowing the use of trademarked terms early on because it was a waste of time and resources to fight stupid lawsuits like this one. As it continued to grow, it realized that there was no legal reason why it shouldn’t allow such uses, and it changed its policies. And, of course, it then gets hit with a stupid lawsuit… and the court seems to use the fact that Google changed its policy as potential evidence that it “intended to cause confusion”? That makes no sense at all. Google knows damn well that if it “intends to cause confusion” that it’s going to lose a trademark lawsuit. Why would it ever do that? The company made clear that it expected to get sued, but it was doing this because it believed the law was on its side. It’s quite a twist to claim “intent” to “cause confusion” based on that.

Next, the appeals court accepts as evidence of confusion, Rosetta Stone finding some guy who was confused by a counterfeit reseller’s site and bought a counterfeit version of their software. Note that the guy was not confused by Google, but by the third party site. The lower court smartly rejected this as anecdotal and properly pointed out that the confusion arose not from Google, but from the other site. But the appeals court rejects that argument and says that the testimony is valid.

After that, the court also moves on to the question of contributory (rather than direct infringement) and bizarrely argues that the reasonable standard set forth in the famous Tiffany v. eBay case cannot be applied at the summary judgment level. This was the ruling that found that eBay was not guilty of contributory trademark infringement for counterfeit goods sold on eBay, in part because eBay made reasonable efforts to remove the infringing content when it became aware of it. This is a reasonable standard, and one that it makes sense to use in this case also, as the lower court did. However, the appeals court basically says that this standard can really only be used after a costly and wasteful trial, even if the court could get around all that by noting the obvious fact that the service provider is a good actor in getting rid of infringing works when it learns of them.

Things get equally troubling when we get down to the question of trademark dilution. The lower court rejected Rosetta Stone’s arguments here on a few factors, but the appeals court sends that back too. Specifically, the lower court pointed out that there was no dilution because Google wasn’t using the Rosetta Stone trademarks to identify its own (different) products, thus there was no dilution. This is the correct interpretation of the law, because the entire point of the (very new) concept of “dilution” in trademark law is that it can’t be used to “dilute” the value of the trademark by applying it to different products. Here, no one is claiming that Google is making use of Rosetta Stone’s marks to impart the value of that mark on something different. So the lower court got that right… but the appeals court gets confused and denies this reasoning, instead saying that this is really a “fair use” discussion, which can only be used as a defense, rather than a proactive argument at the summary judgment stage. Once again, that’s batty. It only encourages long, drawn-out, wasteful and useless trials where none are needed.

The court did accept some of the more minor arguments of the lower court, but sent back all of the major issues. Hopefully the district court does a full trial and still comes to the same (correct and reasonable) conclusion, but in the meantime, they have to waste time and resources on a silly trial that was properly dumped in the first place.

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Companies: google, rosetta stone

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Comments on “Unfortunate: Appeals Court Revives Misguided Rosetta Stone Lawsuit Against Google”

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Mark Harrill (profile) says:

Re: Re:

Have you ever actually talked to a judge about technical matters at all? I used to help run IT for a courthouse and getting them to understand basics requires its own Rosetta Stone Geek -> Judge.

Rulings like this show that they don’t understand the technology involved and what the difference is between the purported infringer and the platform being used. By this logic if someone advertised on a billboard using my trademarked words, I could sue the billboard maker, the billboard owner AND the entity who rented the space to the billboard owner. Does that make sense?

Anonymous Coward says:

Re: Re: Re:

If you look at the issues raised, it doesn’t appear to be particularly mired in technical detail. Issues like direct infringement, contributory infringement and intent don’t seem masked in deep technological mystery in this case. I’d be willing to bet that counsel raised the issues that you brought up in a manner to inform the court and they looked at the law and were unpersuaded. What in the opinion leads you to believe that a lack of technical understanding, rather than the law, was the root cause for the remand?

Anonymous Coward says:

Re: Re: Re: Re:

Apparently the simple matter of adding ‘on the internet’ is enough to change what the law means. Could a newspaper be sued for direct trademark infringement if I used a trademark I don’t control in a classified ad? Fuck no. Apparently adding ‘on the internet’ to this situation is enough technical detail to mire the case in so that a different conclusion was reached.

Anonymous Coward says:

Re: Re:

It’s remarkable that you have yet to raise a valid point and expect anyone to take you seriously.

If you can’t raise a valid point because you don’t have one then don’t expect to be taken seriously.

If you can’t be bothered to raise a valid point because you’re too lazy then expect that no one can be bothered to take you seriously.

Trademark law is to prevent people from falsely representing an entity. One should be able to reference an entity’s name in order to reference the entity, for instance, if criticizing that entity or giving it positive reviews or discussing it in general or selling a product originating from that entity (ie: a used Honda Civic). What trademark should prevent is me from selling a a non-Canon printer while advertising it as a Canon printer. Trademark is (or at least should be) to protect consumers from being mislead, not to protect companies from talking about them and re-selling and re-advertising their products.

Chosen Reject (profile) says:

Re: Re: Re:

I’m tired of all this “right” and “wrong” business. You see it often in schools. My teachers were always biased towards the students that did their homework, and wrote their tests in such a biased way that only smart kids could succeed. Every time I complained, the teacher would launch into some diatribe about how my answers were “wrong” and the other students’ answers were “right”. Utter hogwash, I say. It’s bias, man, pure and simple.

Anonymous Coward says:

Re: Re: Re: Re:

woosh! Yup, right over your head.

You are making the same stupid assumption that Mike makes, that there is a RIGHT and WRONG answer here. When the courts rule against Mike’s wishes, they are WRONG. When they agree with him, they are RIGHT.

The problem is, in this case that may be RIGHT, even if they don’t agree with Mike.

There is no absolute right answer here, so yeah, you missed the point entirely!

Lord Binky says:

Re: Re: Re:2 Re:

This isn’t an Ink Blot test (I have a feeling you’d give them some interesting answers), There is a correct answer. If you are trying to define something, and decide whether or not anything fits that definition, there is a correct answer. If it looks like a duck, quacks like a duck, and has genetics like a duck… is it a duck? Under your assumption, you can’t be wrong saying it’s a goat.

Anonymous Coward says:

Re: Re: Re:2 Re:

Holy crap do you twist logic to avoid appearing like you don’t know what you’re talking about.

If it makes you feel any better, instead of “right” we’ll say, “consistent with the intent of the law” or “in alignment with the public benefits intended by the application of the law.”

So, these federal judges appear to fail to understand the objectives and application of liability. Or are you suggesting that the application of liability should be on a case-by-case basis and not consistent with any common principles?

Dave (profile) says:

Re: Re: Re:2 Re:

You are completely, utterly, and without any equivocation wrong.

Either Google is infringing *or* they are not. This is not new case law and the precedent *clearly* points to not. The judge freaked out because he saw the name Google on the docket and saw his chance to tame the wild wild west of the internet.

Because the internet is different. Even when it is the same.

Anonymous Coward says:

Re: Re:

I always love it – when the courts do something you agree with, they are smart and intelligent. When they do something you don’t like, they are “confused”.

Talk about bias!

Yep. Pirate Mike has the worst-known case of confirmation bias on the planet, but there is a certain beauty in working backwards like Pirate Mike: Whether or not the court got it “right” is determined by whether or not Mike likes the result, which in turn is determined by whether or not the result is good for rights holders. If the decision hurts rights holders, then it’s “right,” and vice versa.

You can play along at home! No actual analysis needed!

Anonymous Coward says:

Re: Re:

You do realize that you’ve drawn that conclusion by using only those court decisions that are the subject of posts, right? Meaning that you’ve drawn your conclusion based on only the set of of court decisions he chose to post about–which is a very small set. You’ve given a fantastic textbook example of selection bias. Well done!

rubberpants says:

Re: Re: Re:

This guy cracks me up, responding to his own posts “Oh I agree, blah blah” in the exact same tone and diction as the original and thinks no one would notice? What an amateur.

The “Change Identity” button on Vidalia is going to get worn out if you don’t stop pushing it so much dude.

Anonymous Coward says:

Re: Re: Re:2 Re:

And by the way, I have no idea why my IP address is changing. It’s the library’s wireless I’m using, so it must be the way their system works. I haven’t moved from this seat in two hours, so if my IP address is changing, it’s not because I’m changing it on purpose.

Anonymous Coward says:

Re: Re: Re:

Judges make mistakes all the time, and judges do not all agree on what the law actually is. The law is always in flux.

Still, the point being made is that Mike’s “analysis” about whether a court got it “right” is based solely on whether he likes the result, not what the law actually is.

Sneeje (profile) says:

Re: Re: Re: Re:

And that is a particularly weak analysis since you have no evidence of such. It would be equally valid to claim that Mike is only stupid when you disagree with him and brilliant when you do.

But you already knew that. You prefer to peacock and try to make yourself feel superior to everyone else, without actually demonstrating any grasp of the material.

BTW, its not working.

Anonymous Coward says:

“First, using trademarked keywords to trigger ads isn’t infringement.”

Agreed, as long as you’re not claiming to represent the trademark holder when I’m really not the trademark holder. For instance, if I sell Nike shoes on Ebay (I hope Nike doesn’t now sue me for using their word), I’m obviously not claiming to represent Nike even though I’m using the keyword Nike to sell my shoes. Because my shoes are Nike shoes.

Anthony Butler says:

US Law courts side with lawyers?

As this article points out, the moves by the appeals court is to foster the need for lengthy, expensive, wasteful and pointless trials. The only people who will benefit from this are lawyers. So the appeals court has sided with the right of lawyers to make a living arguing over something that has no point in being discussed.

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