Prior to 2009, Google AdWords prohibited advertisers from bidding on trademark protected phrases and keywords. Due to the implementation of an advanced algorithm allegedly capable of detecting the advertisers’ intent, Google AdWords changed the policy in 2009 and began allowing advertisers to intentionally bid on these protected keywords and phrases.
Due to AdWords selling sponsored links for specific search terms containing their company name, Rosetta Stone filed a trademark infringement lawsuit against Google shortly after the policy was updated. The popular language platform claims to have reported 190 separate occurrences of Google-sponsored links leading to counterfeiters of their popular software.
Initially the U.S. District Court dismissed Rosetta Stone’s trademark infringement lawsuit against Google. However, the Fourth Circuit Court of Appeals in Richmond, Virginia has revived the case and Judge William Traxler said the following in the court’s 47-page ruling:
“A reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks. The evidence recited by the district court is sufficient to establish a question of fact as to whether Google continued to supply its services to known infringers.”
Although the final outcome of this case is yet to be determined, the court’s decision to request that the lower court reconsider its findings is a major setback for Google. However, in a statement following the case, Google downplayed the decision and expressed confidence of an eventual victory:
“We think that the legitimate use of trademarks as keyword triggers helps consumers to make more informed choices. For what remains of the case, we’re confident we will prevail on both the merits and the law.”
Similarly, the Rosetta Stone President and CEO Stephen Swad indicated that he believed his company would eventually win the courtroom battle:
“We are pleased with the U.S. Court of Appeals’ opinion. We believe that the unauthorized sale of our trademarks to third parties, including counterfeiters, is wrong as it harms and confuses American consumers and infringes upon and dilutes Rosetta Stone’s trademarks. We are confident that we will ultimately prevail in this case.”
If Rosetta Stone ultimately wins the lawsuit, the decision will likely result in immediate changes to Google AdWords policies. These changes, which would most likely prevent additional bidding on trademark protected terms, could drastically change the advertisement strategy for some companies.