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Google’s Shield from Trademark Infringement: AdWords
- 2/4/2011

AdWords continues to be an extremely lucrative advertising tool for Google.  Under AdWords, parties pay Google for “sponsored” words that drive web traffic to the parties’ web sites.   Those sponsored words include trademarks.  In a recent district court decision in the state of Virginia, Google was held not liable for trademark infringement, even though it sold AdWord rights to “Rosetta Stone” a registered trademark owned by Rosetta Stone Ltd.  While the purchaser of the AdWord may be liable for trademark infringement, Google appears to have a shield to stand behind.

In Rosetta Stone Ltd. v. Google Inc., 2010 U.S. Dist. Lexis 78098 (E.D. Va. 2010), a competitor of Rosetta Stone, Inc. purchased the mark “Rosetta Stone” from Google as an AdWord.  The Court rejected Rosetta Stone’s argument that Google should be held liable for trademark infringement on the grounds that AdWords serves an essential indexing function, which allows Google to locate relevant search results in response to a search.   This use, the Court concluded, is no different than the use of a Google search query to trigger relevant organic search results.  Thus, the search term "Rosetta Stone" will return both Sponsored Links and so-called organic links on Google's search results page.  This, according to the Court, is a favorable outcome because it allows an advertiser to place its products before interested consumers.

The Court did not address how a search for “Rosetta Stone” differs from a search for something more generic, such as “language courses.”  Under the AdWords program, the former search is guaranteed to display a competitor at the top of the first page of results, while the latter search may or may not display that competitor on the first page.  Thus, by purchasing another’s trademark as an AdWord, the competitor gains a benefit that would not otherwise be available.

An appeal of this ruling is now before the Federal Court of Appeals.