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(additional counsel listed inside)
No. 10-2007
_______________________________________
IN THE
UNITED STATES COURT OFAPPEALS
FORTHE FOURTH CIRCUIT
_______________________________________
ROSETTA STONE LTD.,
Plaintiff-Appellant,
v.
GOOGLE INC.,
Defendant-Appellee_______________________________________
On Appeal From the United States District Court
For the Eastern District of Virginia, Alexandria Division
_______________________________________
BRIEF FOR AMICI CURIAE CARFAX, INC., FORDMOTOR
COMPANY, HARMON INTERNATIONAL INDUSTRIES,
INCORPORATED, THE MEDIA INSTITUTE, VIACOM INC. AND
BLUES DESTINY RECORDS, LLC IN SUPPORTOF
PLAINTIFF-APPELLANT ROSETTA STONE LTD.
_______________________________________
Marcia B. Paul
Kevan Choset (Of Counsel)
Davis Wright Tremaine LLP
1633 Broadway
27th
Floor
New York, New York 10019Telephone: (212) 489-8230
Counsel for Amici Curiae Carfax, Inc.,
Harmon International Industries,
Incorporated, The Media Institute, Viacom
Inc. and Blues Destiny Records, LLC
Daniel P. Reing
Davis Wright Tremaine LLP
1919 Pennsylvania Avenue, N.W.
Suite 800
Washington, DC 20006
Telephone: (202) 973-4200
Counsel for Amici Curiae Carfax, Inc.,
Harmon International Industries,
Incorporated, The Media Institute, Viacom
Inc. and Blues Destiny Records, LLC
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Mark S. Sparschu
Brooks Kushman P.C.
1000 Town Center
22nd
Floor
Southfield Michigan 48075
Telephone: (248) 358-4400Counsel for Amicus Curiae Ford Motor
Company
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .....................................................................................1
IDENTITY OF AMICI ..............................................................................................1
PRELIMINARY STATEMENT ...............................................................................3
I. THE DISTRICT COURT ERRED IN REJECTING THE
CONTRIBUTORY INFRINGEMENT CLAIM ON SUMMARY
JUDGMENT....................................................................................................4
A. The Court Below Applied Far Too Narrow a Standard for
Inducement to Engage in Trademark Infringement ..............................5
B. That An Online Keyword-Based Advertising Service Can Be
Used to Create and Post Lawful Advertisements Does Not
Insulate It From Its Otherwise Infringing Conduct............................ 10
C. The Court Below Erroneously Limited its Contributory
Infringement Analysis to Counterfeiters............................................ 14
D. The District Courts Narrow View of Contributory Infringement
Resulted in an Incorrect Analysis of Secondary Liability for
Counterfeiters Advertisements.......................................................... 17
1. The District Court Ignored the Facts Demonstrating
Googles Knowledge of Infringements.................................... 17
2. The Decision of the Court Below Places an Unreasonable
Burden on Trademark Owners to Police Their Intellectual
Property.................................................................................... 21
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TABLE OF AUTHORITIES
Page(s)
CASES
Allstar Marketing Group, LLC v. Your Store Online, LLC,666 F. Supp. 2d 1109 (C.D.Cal 2009) .....................................................................................20
CollegeSource, Inc. v. AcademyOne, Inc.,
No. 08-cv-1987, 2009 WL 2705426 (S.D.Cal. Aug 24, 2009)................................................20
Fonovisa, Inc. v. Cherry Auction, Inc.,
76 F.3d 259 (9th Cir. 1996) ...................................................................................................8, 9
FragranceNet.com, Inc. v. FragranceX.com, Inc.,
679 F. Supp. 2d 312 (E.D.N.Y. 2010) .....................................................................................16
FragranceNet.com, Inc. v. Les Parfums, Inc.,672 F. Supp. 2d 328 (E.D.N.Y. 2009) .....................................................................................16
G.H. Bass & Co. v. Wakefern Food Corp.,21 U.S.P.Q.2d 1862 (S.D.N.Y. 1991)......................................................................................10
Georgia Pacific Consumer Products, LP v. Von Drehle Corp.,618 F.3d 441 (4th Cir. 2010) ...............................................................................................5, 11
H-D Michigan Inc. v. Bikers Dream Inc.,
48 U.S.P.Q.2d 1108 (C.D. Cal. 1998), affd in relevant part, 230 F.3d 1366 (9th
Cir.
2000) ..........................................................................................................................................9
Hard Rock Cafe Licensing Corporation v. Concession Services, Inc.,
955 F.2d 1143 (7th Cir. 1992) .............................................................................................9, 18
Inwood Labs., Inc. v. Ives Labs., Inc.,456 U.S. 844 (1982)...................................................................................................4, 5, 11, 17
Lockheed Martin Corporation v. Network Solutions Inc.,194 F.3d 980 (9th Cir. 1999) .....................................................................................................8
Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
545 U.S. 913 (2005).....................................................................................................11, 12, 13
Morningware, Inc. v. Hearthware Home Products, Inc.,
673 F. Supp. 2d 630 (N.D.Ill. 2009) ........................................................................................20
Parts Geek, LLC v. U.S. Auto Parts Network, Inc.,
No. CIVA 09-5578, 2010 WL 1381005 (D.N.J. Apr 1, 2010) ....................................15, 16, 19
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Rescuecom Corp. v. Google Inc.,
562 F.3d 123 (2d Cir. 2009).....................................................................................................15
Sony Corp. v. Universal City Studios,464 U.S. 417 (1984)...........................................................................................................10, 11
Symantec Corp. v. CD Micro, Inc.,
286 F. Supp. 2d 1278 (D. Ore. 2003).........................................................................................9
Tiffany (NJ) Inc. v. eBay Inc.,
600 F.3d 93 (2d Cir. 2010).....................................................................................16, 17, 19, 22
STATUTES
Lanham Act, 15 U.S.C. 1051 et seq...................................................................................... 11, 22
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BRIEF OFAMICI CURIAE
CARFAX, INC., FORD MOTOR COMPANY, HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED, THE MEDIA
INSTITUTE, VIACOM INC. AND BLUES DESTINY RECORDS, LLC
IN SUPPORT OF PLAINTIFF-APPELLANT
This brief is respectfully submitted by Carfax, Inc., Ford Motor Company,
Harman International Industries, Incorporated, The Media Institute, Viacom Inc.
and Blues Destiny Records, LLC (together, amici), urging reversal of the order
below.1
IDENTITY OF AMICI
Amici include some of this nations major corporations, who own a great
number of valuable trademarks, as well as a nonprofit research organization that
studies intellectual property issues.
Amicus Carfax, Inc., a privately held company founded in 1984, pioneered
the Vehicle History Report. Carfax owns federal trademark registrations for a
number of marks, including the CARFAX mark. Carfaxs products and services
are delivered primarily through the Internet, and Carfax actively markets to
customers via the Internet.
Amicus Ford Motor Company is a global automotive industry leader that
manufactures or distributes automobiles across six continents and provides related
1Both parties have consented to this amici curiae brief. No counsel for a party
authored this brief in whole or in part, and no person or entity other than amici and
their counsel made a monetary contribution to the preparation or submission of this
brief.
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products and services. It is the owner of many trademarks, including the iconic
FORD mark, which has been in use since 1895 and is one of the most well-known
marks in the world.
Amicus Harman International Industries, Incorporated is a multinational,
publically held consumer electronics company with brands protected in many
countries worldwide and owns over two thousand trademarks worldwide.
Amicus The Media Institute is an independent, nonprofit research
organization located in Arlington, Va. Through conferences, publications, and
filings with courts and regulatory bodies, the Institute advocates a strong First
Amendment, a competitive communications industry, and journalistic excellence.
The Institute also has a strong interest in intellectual property issues, and sponsors
the National CyberEducation Project.
Amicus Viacom Inc. is a leading global entertainment media company that
delivers entertainment content around the globe through television, motion pictures
and a wide range of digital media, including mobile platforms and video games. Its
family of prominent and respected brands includes MTV Networks (comprised of
the MTV, VH1, Nickelodeon, Comedy Central, CMT and TV Land channels,
among others), BET Networks, and Paramount Pictures.
Amicus Blues Destiny Records, LLC is an independent Blues record label
based in Destin, Florida. It owns the Blues Destiny Records trademark.
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PRELIMINARY STATEMENT
Amici are owners of valuable trademarks (and an organization involved in
intellectual property issues) who work diligently to develop and protect the
goodwill associated with their brands. Amici actively police their trademarks and
currently devote significant resources to guard against unauthorized uses of the
marks online. Increasingly, such unauthorized uses occur in the context of online
advertising. Because consumers often search online for known brands when
seeking to locate goods and services (and, in doing so, rely on trademarks to
signify a particular level of quality), there can be adverse consequences to such
brand owners and to consumers when they are misled and/or confused by
competitors or, worse, by counterfeiters. Accordingly, brand owners must often
rely on good-faith efforts by operators of online advertising platforms. Where an
online keyword-based advertising service such as appellee Google Inc. (Google)
fails to take the necessary steps to deter infringement, creates an environment that
fosters infringement, or suggests and implements the tools that allow others to
infringe, secondary liability is often the only realistic avenue on which amici can
rely to prevent complete erosion of the goodwill in their trademarks.
Amici take no position here as to whether the record below establishes as a
matter of law that specific third parties have (or have not) engaged in conduct
constituting primary infringement underlying a claim for secondary infringement
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by Google. However, it appears that neither party disputes that some underlying
primary infringement does in fact occur through AdWords, whether by
counterfeiters, advertisers posting misleading advertisements, or otherwise. A
program like AdWords works with advertisers by suggesting specific words,
including trademarked terms, on which they should bid; allows advertisers to
associate their ads with these specific words; displays the advertisers messages to
users who search for information about that trademarked term; and chooses which
advertisement appears, and in what order. Thus, the question addressed in this
brief is whether that level of involvement in promoting such potentially infringing
activities rises to a sufficient level to constitute infringement. Amici believe that
the district court erred when it answered that question in the negative.
ARGUMENT
I.
THE DISTRICT COURT ERRED
IN REJECTING THE CONTRIBUTORY
INFRINGEMENT CLAIM ON SUMMARY JUDGMENT
In order to be liable for contributory infringement, one must intentionally
induce[] another to infringe or continue[] to supply its product to one whom it
knows or has reason to know is engaging in trademark infringement. Inwood
Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982). The court below failed to
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apply the proper standard as explicated in the case law to the facts at issue in this
case, as explained below.
A. The Court Below Applied Far Too Narrow a Standard for Inducement
to Engage in Trademark Infringement
The district court erred in its reading of the inducement prong of the
contributory infringement standard. In Inwood, the Supreme Court provided the
framework that would eventually evolve into contributory trademark infringement
jurisprudence. The court below construed this standard of intentionally
induc[ing] another to infringe a trademark narrowly, equating inducement with
nothing less than holding ones feet to the fire. But the case law in this Circuit and
elsewhere simply does not support such a narrow view.
Just this year, this Circuit decided Georgia Pacific Consumer Products, LP
v. Von Drehle Corp., 618 F.3d 441 (4th Cir. 2010). In that case, defendant
manufactured low-price paper towels that could fit into paper towel dispensers
manufactured by plaintiff (and designed to dispense plaintiffs own paper towels).
Noting that [defendants] sales personnel made in-person sales calls on
distributors and end-user customers to market [defendants] Toweling as a less
expensive alternative to [plaintiffs] Toweling, this Court found that defendant
was contributorily liable for the fact that third parties were placing defendants
towels in plaintiffs dispensers. Id. at 451. Defendant did not itself place its paper
towels into plaintiffs paper towel dispensers, and it did not tell third parties to do
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so. Rather, it provided towels the same size as plaintiffs, and told consumers the
true fact that its paper towels were less expensive than plaintiffs. But, this Court
held, secondary liability nonetheless attached.
Just as Von Drehles sales representatives reached out and stated objective
facts to sell its product, not suggesting any actions consumers should take once
they bought that product, Google, by offering trademarks for auction to those other
than their owners in AdWords, and separately by its Keyword Tool2, likewise
appears to be reaching out and suggesting that its customers use specific
AdWords including trademarked names of their competitors to attract
customers. Use of the AdWord tools bears this out. For any customer seeking to
advertise cola (whether a counterfeiter, a manufacturer of a specific cola product,
or anyone else), Googles Keyword Tool suggests keywords that include brands
such as RC Cola and cola coca. (See Appendix A.) Such activity by keyword-
2
The district court states that there are three separate tools that suggest keywordsto advertisers: (1) Keyword Tool; (2) Query Suggestion Tool; and (3) a
trademark-specific version of the Query Suggestion Tool. Op. at 9. Because a
large part of the record is under seal, amici do not fully understand the workings of
all three of these tools. Amici have used the current online version of the
Keyword Tool in preparing this brief, and cite several examples of results
obtained therefrom.
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based advertising services clearly encourages the use of brand names to attract
unwitting consumers.3
In setting up a program that allows third parties to bid for a competitors
trademarks and then suggesting that they do so, a keyword-based advertising
service indeed evidences the requisite intent to induce competitors to bid for
competitive trademarks and to induce counterfeiters to use the real brand to lure
customers to their fake wares. The service need not have the intent to sell to
counterfeiters or competitors, so long as it intends to sell the right to use anothers
trademark in a way that is likely to cause confusion.
The court below also concluded that the mere existence of a tool that assists
advertisers in optimizing their advertisements does not, in itself, indicate intent to
induce infringement. Op. at 35. That may well be true in general terms, but it is
not the mere existence of the tool, but the inclusion in it of trademarked terms that
demonstrates the requisite intent. Likewise, for the court below to point to a lack
of evidence that Googles Keyword Tools or its employees direct or influence
advertisers to bid on the Rosetta Stone Marks (Op. at 41) simply ignores the
facts of the present case: the Keyword Tools, by their very design, do exactly that.
3The fact that Google has a separate trademark-specific version of the Query
Suggestion Tool makes any claim that it is not pushing the use of trademarked
terms particularly disingenuous. Op. at 9. In any event, the standard Keyword
Tool described above suggests RC Cola and cola coca as keywords, so that
tool alone provides inducement.
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They are selected and offered by Google to induce customers to bid on terms that it
knows or has reason to know can be and are used to trade upon intellectual
property owned by others, including but not limited to counterfeiters. When a
customer is told, You can drive traffic to your cola site by bidding on the term
cola coca, that is not merely optimizing [an] advertisement (Op. at 35). This
would be precisely the same as characterizing the statement Our paper towels are
a cheaper alternative to those trademarked paper towels, as merely a statement
about optimizing revenue. This Court has found the latter to be an inducement
and should find similarly with respect to the former.
To place the present facts in context, two contributory trademark
infringement cases from the Ninth Circuit with differing results ( Lockheed Martin
Corporation v. Network Solutions Inc., 194 F.3d 980 (9th Cir. 1999) and Fonovisa,
Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996)), are instructive. In
Lockheed, defendant Network Solutions was a domain name registrar who fulfilled
third-party requests for domain names. It did not suggest particular domain names
to applicants, but rather registered those requests and entered them into its
database, so they could be automatically accessed, or translated, whenever an
Internet user entered that domain name. Network Solutions did not provide the
translation service (i.e., it did not route the user trying to access the website at a
certain address to that website) or host the website; those functions were
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performed by unrelated companies. Because some of the registered domain names
were allegedly used by their operators to infringe Lockheeds rights, Lockheed
sought to impose secondary liability on Network Solutions. The Ninth Circuit,
equating Network Solutions wholly passive conduct with the role of the U.S.
Postal Service, found no secondary liability.
In contrast, in Fonovisa, defendant Cherry Auction operated a swap meet;
customers paid an entrance fee in order to purchase various merchandise from
individual vendors who paid Cherry Auction for booth space. Cherry Auction
supplied parking, advertised upcoming meets, and retained the right to exclude
vendors for any reason, including trademark infringement. Some vendors sold
counterfeit recordings under Fonovisa trademarks. The Court concluded that the
swap meet can not disregard its vendors blatant trademark infringements with
impunity (76 F.3d at 265), and therefore refused to dismiss the contributory
infringement claims. Indeed, providing trademarked keywords and then looking
the other way, despite having the ability to prevent, monitor, and stop infringing
activity by the purchasers of the keywords, is precisely the type of willfull[]
blind[ness] that other courts have found to establish contributory infringement.
Hard Rock Cafe Licensing Corporation v. Concession Services, Inc., 955 F.2d
1143, 1149 (7th Cir. 1992); see also Symantec Corp. v. CD Micro, Inc., 286 F.
Supp. 2d 1278 (D. Ore. 2003).
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Courts also routinely find that when a party actually places the infringing
mark on goods sold by another party, the first party will be liable for contributory
infringement. See, e.g., H-D Michigan Inc. v. Bikers Dream Inc., 48 U.S.P.Q.2d
1108 (C.D. Cal. 1998), affd in relevant part, 230 F.3d 1366 (9th
Cir. 2000)
(manufacturer who places mark on motorcycles is contributorily liable for
trademark infringement even though it does not sell to public); G.H. Bass & Co. v.
Wakefern Food Corp., 21 U.S.P.Q.2d 1862 (S.D.N.Y. 1991) (distributor
contributorily infringed goods by delivering infringing goods to retailers). When
both the idea to associate the advertisement with the trademarked keyword, and the
likely consequent association in consumers minds, are created not by the
advertiser, but by a keyword-based advertising service such as Google, which
supplied the means and facilities and the idea to do so, liability should attach4.
B. That An Online Keyword-Based Advertising Service Can Be Used to
Create and Post Lawful Advertisements Does Not Insulate It From Its
Otherwise Infringing Conduct
Google argued below that because AdWords is capable of generating lawful
advertisements, the overall program cannot itself be unlawful. That argument
echoes the concept of substantial non-infringing uses which arose in the
4Not only does Google create the idea to associate the advertisement with the
trademarked keyword, but because of its detailed knowledge of the entire
AdWords advertising scheme, Google knows the value of that association with
sufficient certainty to estimate the bid price that will be needed to secure the
specific keyword.
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copyright context in the 1984 Betamax case, Sony Corp. v. Universal City
Studios, 464 U.S. 417, 442 (1984). In that case, the Supreme Court found that
Sony, the manufacturer of the then-prevalent VCR, did not have secondary
copyright liability for the illegal copying of television programming by users of the
VCR, because it could be used for a substantial number of perfectly legal purposes
(the great time-shifting vs. library-building debate). But as the Supreme Court
made clear some two decades later in Metro-Goldwyn-Mayer Studios Inc. v.
Grokster, 545 U.S. 913 (2005), that a machine or service (or tool, as here) has
substantial non-infringing uses does not end the analysis: This view of Sony,
however, was error, converting the case from one about liability resting on imputed
intent to one about liability on any theory. Id. at 934.
As the Grokster Court explained, nothing in Sony requires courts to ignore
evidence of intent if there is such evidence, and the case was never meant to
foreclose rules of fault-based liability derived from the common law. Id. at 934-
35. Similarly, as both the Supreme Court and this Circuit have repeatedly
recognized, Lanham Act claims must be analyzed under the judicially created
doctrine of contributory trademark infringement, derived from the common law of
torts. Georgia Pacific, 618 F.3d at 449, citing Inwood, 456 U.S. at 843-54.
Therefore, this Court should look to the factors the Grokster Court identified, by
analogy, to frame the analysis of secondary liability in this case.
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In Grokster, defendants Grokster and StreamCast were not merely passive
recipients of information about infringing use. 545 U.S. at 923. Rather,
StreamCast marketed its service as the best Napster alternative; Grokster touted
its ability to provide particular copyrighted materials; both presumably did so,
according to the Court, in order to attract users of a mind to infringe. In this case,
Google offers trademarks as keywords through its AdWords program, suggests that
advertisers use particular trademarks or variants of them through its Keyword
Tool, and then displays the ad. The Grokster Court stated: the classic instance of
inducement is by advertisement or solicitation that broadcasts a message designed
to stimulate others to commit violations. Id. at 937. This is just such a classic
case.
The Grokster Court relied not only on defendants marketing materials, but
also on their fundamental business models: it held that by reason of their inherent
structure, Grokster and StreamCast had the intent to promote infringement.
Although they received no revenue from users of their free software (just as, here,
the online keyword-based service does not receive revenue from users of its web
search), Grokster and StreamCast generated their income by selling advertising
space (just as the online service does). There, the more users, the more advertisers,
the more profit; here, the more advertisers, the more click-through, the more profit.
The Court explained that [t]his evidence alone would not justify an inference of
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unlawful intent, but viewed in the context of the entire record its import is clear.
Id. at 940. So, too, here: while profit motivation alone is not enough to imply
secondary liability, when coupled with the other factors enumerated herein, the
import of the intent to induce becomes clear.
Equally important to the present analysis is the Grokster Courts conclusion
that [w]hen a widely shared service or product is used to commit infringement, it
may be impossible to enforce rights in the protected work effectively against all
direct infringers, the only practical alternative being to go against the distributor of
the copying device for secondary liability on a theory of contributory or vicarious
infringement. 545 U.S. at 929-30. The exact same is true here: trademark owners
such as amici cannot realistically, in the context of the Internet, police all misuses
of their brands. While it is also no doubt true that online keyword-based
advertising services cannot police all trademark infringements generated by online
searches, that is not what amici seek; rather, they seek to compel those services to
take actions that are well within their control to guard against infringement. This is
particularly true where, as here, the keyword-based advertising service knows who
is bidding on trademarks; knows whether the bidders are the trademark owners;
and has the ability to determine whether such bidders are resellers or using those
trademarks for First Amendment-protected purposes. In Googles case, it can
and previously did weed out all trademarks from its AdWords program.
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Consequently, strong policy reasons augur in favor of compelling such keyword-
based advertising services to do what they clearly can do to prevent infringement.
For all of these reasons, the fact that trademarked terms can at times be used
by third parties lawfully as, for instance, descriptive nominative fair uses or for
comparative advertising purposes, should be of no moment. Comparative
advertising may and often does have a salutary effect on competition, but there is
nothing beneficial about facilitating the sale of counterfeit goods, particularly if
consumers have reason to believe they are getting what they searched for.
C. The Court Below Erroneously Limited its Contributory Infringement
Analysis to Counterfeiters
The court below opens its discussion of secondary liability by saying: [T]he
Court finds that no reasonable trier of fact could find that Google intentionally
induces or knowingly continues to permit third party advertisers selling counterfeit
Rosetta Stone products to use the Rosetta Stone Marks in their Sponsored Link
titles and advertisement text. Op. 32. From the outset, the court limited its
inducement analysis to advertisers selling counterfeit Rosetta Stone products.
Indeed, the seven pages the court devoted to contributory infringement discuss
only counterfeiters.
But counterfeiters are by no means the only advertisers who can be primarily
liable for trademark infringement and can unlawfully trade upon amicis
trademarks and, in so doing, confuse the consuming public. While the district
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court considered whether Google is responsible for direct infringement, it did not
even address whether third parties (including counterfeiters and others, such as
companies that purchase the trademarks of their competitors as AdWords or like
tools) are liable for primary infringement. The courts likelihood of confusion
analysis on direct infringement correctly focused on whether consumers were
likely to be confused by Google as to source or origin by reason of Googles sale
of keywords and the resultant ads. But that is not the same as assessing whether
AdWords customers engaged in direct infringement such as to support a secondary
liability claim against Google.
The likelihood of confusion analysis may well be quite different when
viewed from the perspective of direct liability of the advertiser. For example, the
courts analysis of intent (Op. at 18-21) a key factor considered only Googles
intent to confuse. The question of whether a keyword-based advertising service
such as Google does or does not intend to confuse the buying public by allowing
one company to buy another companys name as an AdWord is a different question
from whether the purchasing company intends to confuse in this same transaction.
For example, in Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009),
multiple competitors of Rescuecom (an on-site computer servicing company)
purchased the trademarked name Rescuecom as an AdWords keyword.
Certainly the level of intent on the part of those competitors (who did not even
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arguably play a passive role) differed significantly from that of Google. Similarly,
in Parts Geek, LLC v. U.S. Auto Parts Network, Inc., No. CIVA 09-5578, 2010
WL 1381005 (D.N.J. Apr 1, 2010), defendant U.S. Auto Parts purchased the
AdWords Parts Geek in order to advertise its own web site. And it should come
as no surprise that when one conducts a Google search of Tiffany, the first
Sponsored Link is for one of Tiffanys direct competitors, Bulgari. See Appendix
B. To say that these examples are just a byproduct of allowing companies like
U.S. Auto Parts to bid for whatever words they want to select to advertise their
products is a gloss: it is part and parcel of the business model of the online
keyword-based advertising service, and its the very way that Google attracts (and,
in some cases, compels)5
so many companies to bid for AdWords.6
5The structure and scope of the AdWords marketplace has a perverse
consequence to some trademark owners, including some amici. Because (i)
Google controls almost 70% of the domestic search market; (ii) the Internet is
increasingly a venue advertisers must exploit or risk demise; and (iii) the AdWords
program not only offers up the right to use trademarks for sale to the highest
bidder, but encourages all comers to bid; many trademark owners feel that they
have no practical choice but to bid on their own trademarks and may even be
forced to consider bidding on their competitors trademarks, just to protect their
own goodwill and to stay afloat in the competitive marketplace.6
See also FragranceNet.com, Inc. v. FragranceX.com, Inc., 679 F.Supp.2d 312,
316 (E.D.N.Y. 2010), in which FragranceX.com purchased AdWords including
FRAGRANCENET, FRAGRANCENET.COM, and other variations on
plaintiffs name; FragranceNet.com, Inc. v. Les Parfums, Inc., 672 F.Supp.2d 328
(E.D.N.Y. 2009) (same).
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Accordingly, it was error for the court below to limit its secondary liability
analysis to counterfeiters as that is but one type of primary infringement which
could give rise to such liability.
D. The District Courts Narrow View of Contributory Infringement
Resulted in an Incorrect Analysis of Secondary Liability for
Counterfeiters Advertisements
Under the second prong of the Inwood standard for contributory
infringement, Google is liable for contributory infringement if it continues to
supply its product to one whom it knows or has reason to know is engaging in
trademark infringement. 456 U.S. at 854. The court below again concentrates
only on counterfeiters, as opposed to other types of primary infringers.
1. The District Court Ignored the Facts Demonstrating Googles
Knowledge of Infringements
The district court relied heavily on the Second Circuits decision in Tiffany
(NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010), noting that in that case, eBays
generalized knowledge of infringement of a sellers trademark on its website was
insufficient to impose upon eBay an affirmative duty to remedy the problem. Op.
at 37. But the knowledge of an online keyword-based advertising service like
Google necessarily extends far beyond the knowledge eBay had in that case, and
the role of such a service is materially different from eBays role in its online
auction marketplace.
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The district court made clear that Google was aware of many infringing
advertisements, including 110 advertisements purportedly selling Rosetta Stone
products posted by the same individual (which were seen by Web users on 356,675
different search results pages). Op. at 35. Google continued allowing advertisers
to post, even after being notified of infringements by those very advertisers. Id.
Google and online services like it should further be aware of infringements by the
mere fact of their provision to customers of the very tools that not only make such
infringement possible, but encourage them. It is not clear what further knowledge
a court could or should require a trademark owner to demonstrate. If a party is
informed of infringing activity and continues to permit such activity, that must rise
to the level of contributory infringement.
The district court goes on to state that Google informs them [advertisers]
that they are responsible for the keywords selected and for ensuring that their use
of the keywords does not violate any applicable laws. Op. at 35. But the Seventh
Circuit did not find analogous facts persuasive in Hard Rock, where the fact that a
flea market posted signs prohibiting vendors from selling illegal goods was
deemed insufficient, given that defendant did not examine vendors wares before
market, and any examination of those wares thereafter was, according to the court,
cursory. The same can be said where a keyword-based advertising service hosts
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advertisements for counterfeit goods: simply posting an electronic sign
prohibiting them should not be deemed enough to evade liability.
The district court similarly relies on technological limitations when it says
[t]here is little Google can do beyond expressly prohibiting advertisements for
counterfeit goods, taking down those advertisements when it learns of their
existence, and creating a team dedicated to fighting advertisements for counterfeit
goods. Op. at 37. The court again analogizes to Tiffany v. eBay, and posits that
Googles hands are tied here just as eBays were in that case. Id. But plaintiff in
eBay explicitly did not claim inducement: (Tiffany does not argue that eBay
induced the sale of counterfeit Tiffany goods on its website id. at 106) so eBay
does nothing to diminish the inducement arguments above. Further, the court
below relied on Googles policy instead of its actual practice, i.e., [i]n fact, it is in
Googles own business interest, as a search engine, not to confuse potential buyers
of Rosetta Stones products (Op. at 20), because it knows that those
advertisements can create a bad experience for web users (id. at 37). Once again,
the court confined its analysis of the bad experience to resultant purchases of
counterfeit goods, ignoring a host of other potential direct infringements. Sending
a consumer to the U.S. Auto Parts web site when s/he searches for Parts Geek
(see Parts Geek, 2010 WL 1381005, supra) will not necessarily cause a bad
experience; s/he may just end up purchasing the competitive product. Parts Geeks
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goodwill will have been exploited by U.S. Auto Parts with the online
keyword-based advertising services complicity but that does not provide any
disincentive to that service.
The district court opinion also states that some advertisers have used
loopholes in Googles programming to create Sponsored Links that deceive and
misdirect Googles users to websites that sell counterfeit RS products or suggest to
consumers a connection to RS that does not exist. Op. at 12. This casts the
problem of advertisers using keywords to suggest to consumers a connection
that does not exist as something perpetrated by a devious few. But as the spate of
litigation between competitors, one of whom purchases the others trademark as an
online search keyword indicates, this is more than a mere loophole utilized by the
fringe.7
Either Googles technological tool is not working, or Google is not
using it.8
7See supra at pp. 19-20; n.5; see also Morningware, Inc. v. Hearthware Home
Products, Inc., 673 F.Supp.2d 630 (N.D.Ill. 2009) (defendant purchased
Morningware as AdWord); CollegeSource, Inc. v. AcademyOne, Inc., No. 08-cv-
1987, 2009 WL 2705426 (S.D.Cal. Aug 24, 2009) (allegation that defendant
purchased plaintiffs trademarks, including Collegesource and Career Guidance
Foundation); Allstar Marketing Group, LLC v. Your Store Online, LLC, 666F.Supp.2d 1109 (C.D.Cal 2009) (defendant purchased AdWords of plaintiffs
trademarks, including Snuggie and Aqua Globes).8
The opinion below also relies on a clear contradiction: it justifies Googles
ability to include trademarked terms in the AdWords program because of this new
technological tool (Op. at 21), but when presented with advertisements that
violate Googles stated policy that the tool is designed to weed out, it absolved
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2. The Decision of the Court Below Places an Unreasonable Burden
on Trademark Owners to Police Their Intellectual Property
If the opinion and reasoning of the district court is not reversed, the courts
will have erected a virtually insurmountable barrier for trademark owners such as
amici who seek to protect their intellectual property in the context of online
advertising programs.
Amici understand that a line must be drawn between scenarios in which an
intellectual property owner bears the lions share of burden of policing and
protecting its property online, and scenarios in which an online keyword-based
advertising service must bear that burden. But as between trademark owners and
such advertising services, the latter are in a far better position to prevent
advertisers from improperly exploiting trademarks. Given that Google knows who
is paying for the use of such marks (and thus whether the advertiser is or is not the
owner of the trademark), and can often determine whether the advertiser is a
reseller or an informational site, it has far more of the necessary information to
determine whether any particular advertiser is an infringer than does the trademark
owner.9
Google because there is no mechanism for eliminating such advertisements (id.
at 37).9
In contrast, trademark owners must, through either manual or technical scans,
locate the sites selling counterfeit goods or otherwise infringing their marks, which
is a labor-intensive process, particularly given Googles geotargeting, i.e.,
locally varying Sponsored Links.
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Nor would placing the onus solely on trademark owners like Rosetta Stone
and the amici to police trademark infringement in online advertising programs
serve the underlying public purpose of the Lanham Act, i.e., preventing consumer
confusion. Even with a diligent policing mechanism, trademark owners can only
inform keyword-based advertising services of an infringing advertisement afterthe
advertisement has gone live and has the potential to confuse unwitting consumers,
and even then, the infringing links remain live for some period while the service
investigates the complaint. The services, in contrast, have the ready means to
identify such an advertisement before the damage is done. These facts stand in
sharp contrast to those in eBay. If Tiffany found a listing on eBay for a counterfeit
product, it could inform eBay, who would then remove the listing before the
auction ends, and no counterfeit merchandise would have been sold. But online
keyword searches do not operate on the same timeframe. While an eBay item may
be listed for days, searches happen continuously. Based on the 100,000,000
searches for Rosetta Stone over a six-year period (Op. at 23), this averages to
one search for Rosetta Stone every two seconds. No matter how vigilant
trademark owners policing, they cannot possibly inform keyword-based
advertising services of infringing advertisements before those advertisements are
seen by and have a potentially deleterious effect on the consuming public.
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CONCLUSION
The district courts decision, if left in place, would cause great harm to
trademark owners, not merely because of its effects on the parties involved, but
because it would be an open invitation to others both other keyword-based
advertising services and purchasers of competitors trademarks as keywords to
engage in wholesale in the same or similar practices. While online advertising is
an important canvas for all types of businesses, it cannot be a free-for-all, and it
should not be immune from the law that protects trademark owners and consumers
in other media. Traditional trademark law and policy require that web sites (like
others) not foster infringement. Amici recognize that the mere existence of an
online advertising platform does not imply inducement or infringement on the part
of that platform. But when such a platform provides the tools for and means of
infringement like Google does here, secondary liability must attach, lest trademark
owners will be stripped of their goodwill and online consumers confusion will
increase manifestly.
Accordingly, the district courts order should be reversed.
Dated: November 1, 2010
Respectfully submitted,
DAVIS WRIGHT TREMAINE LLP
By: /s/__Marcia B. Paul________________
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Marcia B. Paul
Kevan Choset
Daniel P. Reing
Attorneys for Amici Curiae
Carfax, Inc., Harman International
Industries, Incorporated, The Media
Institute, Viacom Inc. and Blues Destiny
Records, LLC
BROOKS KUSHMAN P.C.
By: /s/__Mark S. Sparschu______________
Mark S. SparschuAttorneys for Amicus Curiae
Ford Motor Company
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APPENDIX A
Google Keywords Tool Search Results for cola
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APPENDIX B
Google Search Results for tiffany
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UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-2007 Caption: Rosetta Stone Ltd. v. Google Inc.
CERTIFICATE OF COMPLIANCE WITH RULE 28.1(E) OR 32(A)
Certificate of Compliance With Type-Volume Limitation,
Typeface Requirements, and Type Style Requirements
1. This brief complies with the type-volume limitation of Fed. R.
App. 28.1(e)(2) or 32(a)(7)(B) because:
[Appellants Opening Brief, Appellees Response Brief, and Appellants
Response/Reply Brief may not exceed 14,000 words or 1,300 lines; Appellees
Opening/Response Brief may not exceed 16,500 words or 1,500 lines; any Reply or Amicus Brief may not exceed 7,000 words or 650 lines; line count may be used
only with monospaced type]
this brief contains 5,401 words, excluding the parts of the brief
exempted by Fed. R. App. 32(a)(7)(B)(iii), or
this brief uses a monospaced typeface and contains _____ [state the
number of] lines of text, excluding the parts of the brief exempted by
Fed. R. App. P. 32(a)(7)(B)(iii).
2. This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because:
[14-pointfont must be used with proportional typeface, such as Times New Roman
or CG Times; 12-point font must be used with monospaced typeface, such as
Courier or Courier New]
this brief has been prepared in a proportionally spaced typeface using
Microsoft Word in 14-point Times New Roman; or
this brief has been prepared in a monospaced typeface using _____[state name and version of word processing program] with ______
[state number of characters per inch and name of type style].
Dated: November 1, 2010 /s/ Marcia B. Paul
Counsel for Amici Curiae Carfax, Inc.,
Harman International Industries,
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Incorporated, The Media Institute,
Viacom Inc. and Blues Destiny
Records, LLC
/s/ Mark S. Sparschu
Counsel for Amicus Curiae Ford Motor
Company
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