• by Wendy Davis , Staff Writer @wendyndavis, July 8, 2008

Rosetta Stone, a company that sells software to teach foreign languages, has become the latest company to sue over keyword advertising on Google. Rosetta Stone is miffed because its name is being used by rivals as a trigger for search ads, according to a report in the Wall Street Journal.

  Unlike some companies -- including American Airlines, Rescuecom and Geico -- Rosetta Stone didn't sue Google, which has the resources to defend itself in court and a track record of winning. Rather, Rosetta Stone sued rivals, including Rocket Languages and Libros Media.

In its lawsuit, Rosetta Stone accuses the other businesses of leveraging the Rosetta Stone tradename to advertise their own products. The company also accuses rivals of tarnishing the name Rosetta Stone with ads containing copy like, "Rosetta Spanish A Scam?" and "Read These Reviews Before Buying Rosetta Spanish!"

Clearly, Rosetta Stone feels aggrieved by these ads. But that doesn't mean the company is likely to win a trademark infringement lawsuit.

Consider, to date, Google hasn't lost any lawsuits accusing it of trademark infringement based on its paid search program. In the first case to go to trial, brought by insurance company Geico, the judge found that consumers weren't confused by rival insurance companies' search ads. Without that confusion, the judge held, there was no trademark infringement. (Google and Geico later settled another portion of the case.)

Computer repair shop Rescuecom also sued Google and lost. There, the trial judge never reached the question of whether people were confused by ads for Rescuecom rivals. Instead, the judge ruled that arranging for a trademarked term to trigger a search ads isn't a "use in commerce." The Second Circuit Court of Appeals is currently considering an appeal in that case, but even if that court reverses and orders a trial, that doesn't mean that Rescuecom will prevail.

Google has the wherewithal to fight these lawsuits in court, where it argues that allowing trademarks to serve as ad triggers is no different from arranging to run an ad in a print magazine for, say, Toyota, next to an article about Ford.

Given Google's track record, it might make sense that companies would sue rival marketers directly rather than the deep-pocketed search giant. At the same time, some of the companies to pursue trademark infringement cases against fellow search marketers have lost badly. In one recent case, the First Circuit Court of Appeals rebuffed Boston Duck Tours' claim on the ground that "duck tours" is now generic, according to Santa Clara University's Eric Goldman. "Plaintiffs in keyword advertising lawsuits can end up worse off than they started," Goldman blogged. "This is a good reminder to plaintiffs to do a careful cost-benefit analysis when bringing keyword advertising lawsuits and to include the risk of asset loss in the calculations."