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If you've ever used Google's Adwords, you'll understand the significance of this case. The Fourth Circuit Court of Appeals on Monday revived parts of a lawsuit by Rosetta Stone against Google for trademark infringement.
The lawsuit alleged that Google was infringing on Rosetta Stone's trademarks when the Internet giant sold the marks to third-party advertisers for use as search keywords, the Chicago Tribune reports.
Google's Adwords feature allows advertisers to purchase a keyword. Essentially, when the keyword is then typed into a Google search, the paid advertiser's ad would appear in a prime location. So if "Rosetta Stone" were the keyword purchased, then an Internet user typing in that word would see the paid advertiser's featured ad pop up among the search results.
With regard to trademarks, Google has the policy that an advertiser can purchase a trademarked term only if (1) the purchaser is a reseller of that trademarked product, (2) the purchaser makes or sells component parts for that trademarked product, (3) the purchaser offers compatible parts or goods for use with that trademarked product, or (4) the sponsor provides information or reviews about the trademarked product.
Rosetta Stone claims that this policy still hasn't prevented Google from selling the trademarked words to counterfeit producers of Rosetta Stone products. The result, claims Rosetta Stone, is not only a likelihood of confusion but actual confusion by consumers.
In entering a summary judgment against Rosetta Stone, the district court held that there was no issue of genuine fact as to whether there was a likelihood of confusion by Google's use of the trademark "Rosetta Stone." The court also said that the "functionality doctrine" shielded Google from any liability.
The Fourth Circuit Court of Appeal remanded the case and directed the district court to examine when Google first appeared to dilute the trademark, and whether or not the trademark was well recognized at the time of dilution.
The determination of these questions will no doubt be on the radar of IP lawyers across the world, as this isn't the first time that Google AdWords has come under heat.