Rosetta Stone Loses Trademark Suit Against Google

• by Wendy Davis , Staff Writer @wendyndavis, April 29, 2010

One year ago, a federal appeals court ruled that the computer repair shop Rescuecom could proceed with a lawsuit against Google for trademark infringement for allegedly allowing Rescuecom's rivals to use its name to trigger search ads.

Rescuecom ultimately withdrew its case, but the appellate ruling still paved the way for a flurry of similar trademark infringement lawsuits against Google, including a potential class-action case.

Today, news comes that U.S. District Court Judge Gerald Bruce Lee in Alexandria, Va., has tossed one of those cases, a lawsuit by language learning software company Rosetta Stone.

Though Lee entered an order granting summary judgment to Google, he hasn't yet issued a written opinion, so it's not certain why he ruled against Rosetta Stone. But judging from the court papers, some of Rosetta Stone's claims appear especially weak.

One of Rosetta Stone's major complaints was that its name was used by retailers like Amazon to trigger search ads.

Rosetta Stone objected to such ads because it wanted consumers to purchase directly from itself, not from outside retailers. "Rosetta Stone conducts a substantial amount of its business over the Internet and has made a sizeable investment in the development of its online business," the company argued, adding: "It is generally more beneficial for Rosetta Stone when consumers purchase directly through Rosetta Stone."

Google countered that legitimate retailers like Amazon have every right to use trademarks to advertise the goods they sell. "If applied in traditional advertising contexts, Sunday circulars as we know them today would cease to exist, with grocery stores unable to advertise a sale on 'Coke' without first getting permission from Coke to do so," Google said in its court papers.

Without seeing Lee's written opinion, it's impossible to know what factors went into his decision. Certainly, however, Google had the stronger argument on the use of trademarks by retailers.

It's possible that other companies to sue Google will stand a better chance if they focus on the use of their trademarks by rivals, as opposed to retailers.

But for now Google's record in court remains unbroken: The company has settled some cases -- including a trademark infringement lawsuit by American Airlines -- but to this day has never lost a contested lawsuit about trademark infringement on AdWords.