End Of Bogus Trademark Lawsuits Over AdWords In Sight

from the getting-there... dept

For years, we've pointed to the series of ridiculous trademark lawsuits filed against Google over Adwords, and wondered when it would finally be settled and understood that advertising on a third party site against a competitor's trademark is just good marketing, not trademark infringement. To bring up an analogy, many of us are used to supermarkets that display coupons near competing products -- or where you get handed competing coupons printed out at checkout. This is the exact same concept. It's perfectly reasonably that if you're searching for a certain brand name, a competing company may seek to buy clearly marked advertisements that attempt to offer you a better deal. There's no confusion by the consumer and no "dilution" of the original brand. It's just good competition. Even more bizarre is the fact that these lawsuits targeted Google, rather than the advertiser directly. After all, Google just provides the platform. If an ad is actually confusing to users, then the only trademark claim would be against the company who actually created the confusing ad, not the platform that hosts it.

Back in 2005, with the high profile Geico case, we had hoped that the court would set the record straight on all this, but it chose to punt on the key questions, and Google and Geico eventually settled, which only resulted in a bunch more similar lawsuits. Perhaps the most well known was the one that Rosetta Stone filed back in 2009 (the ninth such case). That case has been kicking around for years, with various ups and downs. Rosetta Stone even went so far as to support SOPA's predecessor, COICA, in the hopes that it would be useful in making Google liable for the ads others placed on its site.

We had thought that a clear headed judge would point out the obvious, but instead, we got a massively confused ruling that was quite troubling in which it was unclear if the judge really understood the issues at play. Given all of this, it's not a huge surprise that Google figured out a way to settle the case out of court. While it probably had to pay a small sum to make that happen, Eric Goldman notes, nothing in what's been announced suggests that Google agreed to change any of its practices. He also notes that, at this point, nearly every such case against Google has ended in a Google win or quiet settlement in which Google's policies are left intact:

Irrespective of the specific settlement terms, ending this case is a strategic win for Google because it takes out the last “major” US trademark owner challenger to AdWords.  Combined with the recent dismissal of the Jurin lawsuit, Google is now down to two pending US trademark lawsuits over AdWords: CYBERsitter and Home Decor Center.  Despite CYBERsitter’s recent intermediate “win,” I don’t think either of the two remaining lawsuits are dangerous to Google.  As a result, Google is tantalizingly close to successfully running the table on all of the US trademark challenges to its AdWords practices.  When this happens, Google will have legitimized the billions of dollars of revenues it makes by selling trademarked keywords in AdWords.

Eric may be slightly more optimistic on this than I am. Having seen so many of these cases come and go, I still expect others to jump in, in the hopes of getting offered a similar "settlement" just to go away. Hopefully one of the remaining cases ends in a clear judicial smackdown against companies who are trying to stretch trademark law well beyond its intended purpose.

Filed Under: advertising, adwords, trademark
Companies: google, rosetta stone

Lodsys Continues Demanding Cut Of Smartphone Apps; Developers Hit Back In Court

from the innovation? dept

The story of Lodsys is, by now, quite an infamous one in smartphone app development circles. The "company" (and I use that term loosely) owns a few patents, which it basically claims covers any iPhone app that involves in-app payments:

• 5,999,908: Customer-based product design module
• 7,133,834: Product value information interchange server
• 7,222,078: Methods and systems for gathering information from units of a commodity across a network
• 7,620,565: Customer-based product design module

This is despite the fact that Apple offers in-app payments as a feature of its platform, and Apple, in fact, holds a license to the patent in question. Of course, Lodsys and its supporters argue that Apple's "license" only applies to Apple and that it's proof that the patent is valid. That's not accurate however. The patents Lodsys holds were spun out of Intellectual Ventures, so it's most likely that Apple's "license" to them comes from the fact that it's one of the many large tech companies who have paid off IV to be protected from such patents. Apple has said that it will defend iPhone developers in court if they take on Lodsys, but it's still an expensive proposition, and even some of the most principled app developers are realizing that it's cheaper to settle than to fight.

This is, of course, exactly what Lodsys (and many other patent trolls) rely on. The patent system today is such that if you get sued, you're almost guaranteed to have to spend at least $1 million defending yourself in court. This is not fair. This is not reasonable. But it's a key element in our broken system, and the trolls exploit it as much as they possibly can.

Thankfully, some companies are trying to fight back. Despite Apple's promises to fight on behalf of its developers, Lodsys continues to both threaten and sue, including going after some big companies, like Dell, Rosetta Stone and Overstock. Of course, one reason why Lodsys wants to keep going is that at least one of its patents expires in a few months -- and it probably wants to squeeze as much out of it as possible. As the article linked here by Jeff Roberts highlights, a Seattle app developer, A Thinking Ape, has decided to jump ahead of the line by filing for a declaratory judgment against Lodsys. Lodsys's initial threat letter and A Thinking Ape's filing are embedded below. The filing includes details of many other declaratory judgment filings against Lodsys and argues that the patents are both invalid and that A Thinking Ape doesn't infringe them anyway. It certainly would be nice to see Lodsys smacked around in court a bit, but Lodsys and its secretive "owners" are still likely making out like bandits by effectively taxing tons of app makers.

Filed Under: app, patent troll, smartphone
Companies: a thinking ape, apple, dell, lodsys, overstock, rosetta stone

Unfortunate: Appeals Court Revives Misguided Rosetta Stone Lawsuit Against Google

from the can't-we-get-this-straight-already?!? dept

There have been a number of silly lawsuits against Google for the fact that companies can buy AdWords ads based on trademarked terms. These lawsuits are problematic on a few different levels. First, using trademarked keywords to trigger ads isn't infringement. It's a perfectly reasonable use. In the same way that a supermarket often places coupons for certain brands/products near competing products, advertising competitors is perfectly reasonable. Second, even if there is trademark infringement, it should be limited to the advertiser itself, not to Google, who is merely the platform. Even though a few courts had more or less said this in the past, software company Rosetta Stone decided to sue anyway back in 2009. The lawsuit was dumped pretty quickly, with the court getting the big questions right (though it went a little weird on some of the finer points).

Rosetta Stone appealed, and basically got every company who hates Google to join in on the fun. Not only that, but Rosetta Stone even used its loss as a reason to support SOPA's predecessor, COICA, saying that Google is "the gateway for criminals into America."

No, I'm not joking. Rosetta Stone literally said the fact that Google allows competitors to put up ads based on trademarked keywords makes it the (not "a", but "the") "gateway for criminals into America."

Unfortunately, rather than give the company the slap down it deserves, it appears that a somewhat confused appeals court is reviving the case and sending it back to the lower court to reconsider. The reasoning in this 7th Circuit ruling is extremely troubling on a variety of levels.

Quite amazingly, the court actually suggests that there's a possibility that Google is guilty of direct infringement of Rosetta Stone's trademarks. This makes no sense. Even if you somehow twisted things to make Google liable in some manner or another, the only possible liability has to be for secondary liability, because it's not the one directly making use of the trademarks in the first place. It's providing the platform and the advertisers are using the marks. This is pretty basic stuff, and it makes you wonder the technical literacy of the appeals court panel (or why they presume to judge a case where they clearly don't understand what they're talking about).

Another bizarre point is on the question of "intent." The court accepts much of Rosetta Stone's argument that because Google changed its policy over time to allow greater usage of trademarked terms, that it had intent to infringe. While that is one possible interpretation, there are much more sensible explanations that aren't so nefarious. Google stopped allowing the use of trademarked terms early on because it was a waste of time and resources to fight stupid lawsuits like this one. As it continued to grow, it realized that there was no legal reason why it shouldn't allow such uses, and it changed its policies. And, of course, it then gets hit with a stupid lawsuit... and the court seems to use the fact that Google changed its policy as potential evidence that it "intended to cause confusion"? That makes no sense at all. Google knows damn well that if it "intends to cause confusion" that it's going to lose a trademark lawsuit. Why would it ever do that? The company made clear that it expected to get sued, but it was doing this because it believed the law was on its side. It's quite a twist to claim "intent" to "cause confusion" based on that.

Next, the appeals court accepts as evidence of confusion, Rosetta Stone finding some guy who was confused by a counterfeit reseller's site and bought a counterfeit version of their software. Note that the guy was not confused by Google, but by the third party site. The lower court smartly rejected this as anecdotal and properly pointed out that the confusion arose not from Google, but from the other site. But the appeals court rejects that argument and says that the testimony is valid.

After that, the court also moves on to the question of contributory (rather than direct infringement) and bizarrely argues that the reasonable standard set forth in the famous Tiffany v. eBay case cannot be applied at the summary judgment level. This was the ruling that found that eBay was not guilty of contributory trademark infringement for counterfeit goods sold on eBay, in part because eBay made reasonable efforts to remove the infringing content when it became aware of it. This is a reasonable standard, and one that it makes sense to use in this case also, as the lower court did. However, the appeals court basically says that this standard can really only be used after a costly and wasteful trial, even if the court could get around all that by noting the obvious fact that the service provider is a good actor in getting rid of infringing works when it learns of them.

Things get equally troubling when we get down to the question of trademark dilution. The lower court rejected Rosetta Stone's arguments here on a few factors, but the appeals court sends that back too. Specifically, the lower court pointed out that there was no dilution because Google wasn't using the Rosetta Stone trademarks to identify its own (different) products, thus there was no dilution. This is the correct interpretation of the law, because the entire point of the (very new) concept of "dilution" in trademark law is that it can't be used to "dilute" the value of the trademark by applying it to different products. Here, no one is claiming that Google is making use of Rosetta Stone's marks to impart the value of that mark on something different. So the lower court got that right... but the appeals court gets confused and denies this reasoning, instead saying that this is really a "fair use" discussion, which can only be used as a defense, rather than a proactive argument at the summary judgment stage. Once again, that's batty. It only encourages long, drawn-out, wasteful and useless trials where none are needed.

The court did accept some of the more minor arguments of the lower court, but sent back all of the major issues. Hopefully the district court does a full trial and still comes to the same (correct and reasonable) conclusion, but in the meantime, they have to waste time and resources on a silly trial that was properly dumped in the first place.

Filed Under: adwords, competition, trademark
Companies: google, rosetta stone

Rosetta Stone Says Google Is A 'Gateway For Criminals'; Urges Congress To Make Google Liable For Infringement Via COICA

from the translate-this dept

Rosetta Stone seems to be working overtime to make sure I never buy its software. It's actually too bad, since I was recently looking for some language training software (if anyone has recommendations on decent competitors, please let me know). Lately, the company has been on a tear trying to blame Google for the fact that some users are putting up AdWords on trademarked terms -- sometimes pointing to unauthorized versions of Rosetta Stone's software. Of course, like with nearly every other such lawsuit, Rosetta Stone lost badly in the district court, and the appeal is ongoing.

However, we noticed that Rosetta Stone was one of the companies that had signed a letter in support of COICA, and assumed it was just about trying to stop sites from offering unauthorized versions. However, it appears that Rosetta Stone actually would like the censorship law to go much further, specifically suggesting that COICA include making Google liable for any infringement found via the site.

The company's CEO even made this absolutely ridiculous statement:

"Think of Google as the gateway for criminals into America as it's currently configured,"

Google correctly responded that Rosetta Stone's "exaggeration doesn't belong in a serious conversation." Of course, it really makes me wonder what the folks at Rosetta Stone are doing and thinking. Promoting and supporting censorship and blaming third parties for infringement is no way to run a business.

Filed Under: coica, liability
Companies: google, rosetta stone

Why Is Google Fighting So Hard To Keep Filing In RosettaStone Lawsuit Secret?

from the open-up dept

Last year, we wrote about an effort by Public Citizen along with lawyers Eric Goldman and Martin Schwimmer, to have RosettaStone and Google remove the massive number of redactions that were made in the legal filings each has put forth in the companies' trademark dispute. As Paul Levy of Public Citizen noted at the time, this case will have important public policy impact on others, and it's only fair that the details be known. Despite being secretive upfront, it seems that RosettaStone has mostly been amenable to this and has provided unredacted filings (which have shown that the redacted info never should have been redacted in the first place). Yet, it appears that Google is still fighting this. Eric Goldman points out that Google appears to be working to avoid having to reveal what it redacted, though it's not clear why. Of course, all this really does is make you wonder what Google is hiding.

Filed Under: sealed arguments, secrecy
Companies: google, rosetta stone

If You Don't Offer Legit Versions, Is It That Big A Surprise That People Want Unauthorized Copies?

from the if-that's-all-they-can-get... dept

Sage Freehaven points us to an amusing, but telling, customer service chat between a guy in the UK who wanted to buy the latest version of RosettaStone's Vietnamese language program, and a RosettaStone customer service rep. The guy's main concern is that it appears an older version is available in the UK, but he wants the newer version, which the company refuses to ship to the UK, even though it's been out elsewhere for a long time. He then asks if the company will give a free upgrade when it finally launches the newer version in the UK, and the customer service rep has no idea. The response, not surprisingly, is that it's just easier to get an unauthorized copy: There's simply no logical reason for Rosetta Stone to do this. I'm sure it has its excuses, with talk about localization and different regional rights and whatnot, but those things don't make much sense in a global economy these days. If a product is available somewhere, not offering a legal, authorized version somewhere else is simply setting yourself up to push people who otherwise want to buy into seeking alternatives.

Filed Under: authorized copies, unauthorized copies
Companies: rosetta stone

Why Are Rosetta Stone & Google Hiding Details In Court Case... And Why Is The Judge Allowing It?

from the redact-this dept

Paul Levy has been staying on top of a rather important aspect of the ongoing Rosetta Stone/Google lawsuit over whether or not Google is liable for trademark infringement over keywords ads that might point to counterfeit copies of Rosetta Stone software. So far, Rosetta Stone has lost badly and it seems likely that will continue. However, what caught Levy's attention is that in the appeal, both sides worked out an agreement to file certain aspects of their briefs "under seal" thus hiding from the public large segments of the facts related to this case that will surely set an important precedent one way or the other. That's hugely problematic and Levy complained about it. Both companies agreed to unseal their briefs, though Google has not yet done so, and Rosetta Stone only did so at the last minute, leaving little to no time for potential amici to make use of the unredacted filings in making their own arguments. However, once Rosetta Stone's brief was released unredacted, it was quickly realized that the redacted sections had no reasons for the redactions in the first place, as they did not contain confidential information at all.

And now it's looking even more ridiculous, because while the briefs have been (or will be) released in unredacted form, the 15 volumes of Joint Appendix is still mostly (13 of the 15 volumes) being filed under seal. Lawyers Eric Goldman, Marty Schwimmer and Levy have filed motions to intervene and to have the entire Joint Appendix unsealed. In explaining why, Levy notes:

For more than three decades, the courts have recognized a general policy under both the common law and the First Amendment under which judicial records -- both briefs that argue how judges should resolve vases, and the evidence submitted in support of those arguments -- should be open to the public unless there are very good reasons why particular pieces of evidence should be kept secret. That is the best way for consumers to understand how their courts are operating and why judges reach their decisions, as well as to monitor the activities of the parties to litigation. But Rosetta Stone and Google have flagrantly disregarded these rules in the course of litigating their trademark dispute in federal court in Virginia, and more recently in the Fourth Circuit....

The pressures of commercial litigation have created an increasing tendency for private litigants and judges alike to ignore the requirements for public scrutiny by entering joint agreements in which each side gets to keep its own information secret. To save time and expedite discovery, particularly in "rocket-docket" jurisdictions that put a high premium on expedited resolution of cases, parties agree that each side can designate documents as "confidential" subject to the later right to challenge the need for confidentiality. The agreements typically further provide that, when discovery materials are used in support of dispositive motions, anything designated as confidential must then be filed under seal.

As he notes, in theory each side can challenge this, but they rarely do, since they tend to both agree to keep each other's info secret -- and it's the public that loses out. Hopefully the court pays heed to this and pushes Google and Rosetta Stone to unseal the full filings in the case.

Filed Under: redacted info, secrecy, trademark, under seal
Companies: google, rosetta stone

Nearly Every Company That Hates Google Piles On To Rosetta Stone Case

from the even-against-their-own-interests dept

For many, many years, we've covered the long list of cases involving some company suing Google because someone else bought an AdWords ad based on a keyword that the plaintiff had the trademark on. As we've discussed over and over and over again, these lawsuits make little sense for a couple of reasons. First, a trademark does not give you total control over the word, but only in cases where there is a likelihood of confusion (or dilution, though, that's a bit of a separate issue). Having a competitor advertise on your keywords is unlikely to confuse anyone. It's perfectly reasonable to try to put your ads where people are looking for your competitor's products. It's why when you go to the supermarket, they often will hand out coupons to you for competing products to what you've bought. That's not illegal, it's competition. Second, if there actually is any confusion in the ad, the liability would be on the advertiser, not on Google.

Thankfully, in most of these cases, the courts have recognized this and Google has prevailed. One high profile one, decided a few months back, was an attempt by language software firm, Rosetta Stone, to sue Google over ads on the site. Rosetta Stone failed badly, and while there were some quirky aspects to the ruling, it got the "big questions" right.

Rather than recognizing the nature of trademark law, Rosetta Stone is appealing, and the case is generating a lot of attention. Eric Goldman has a rundown of amici briefs supporting Rosetta Stone's position, and it's basically a "who's who" of companies who hate Google and are or were involved in other lawsuits against Google. You have Viacom and Blue's Destiny, who both sued (and lost to) Google on copyright issues. It seems they're hoping that if secondary liability in trademark can be applied to Google on this issue, perhaps they can use it to argue for more secondary liability in copyright law. That's a longshot, and it's a pretty childish reason to file an amicus brief here. There are some other companies that have sued over trademark keyword advertising in the past... And then there's the Association for Competitive Technology (ACT) and the Business Software Association (BSA), both of which have very strong ties to Microsoft. This seems really strange, because a loss for Google here would absolutely harm Microsoft. As Eric Goldman notes:

Could Microsoft be foolish enough to use this lawsuit as an opportunity to tweak its arch-enemy Google, even though an adverse ruling in this case would almost unquestionably be against Bing's best interests?

Even more bizarre is that eBay also has pretty strong ties to ACT, and eBay has been fighting against a long series of ridiculous secondary liability trademark claims from luxury goods makers (many of whom signed on to the exact same brief by ACT. It would appear that this brief actually appears to go against many of the best interests of ACT's largest members. A very strange move by ACT who should know better.

One other oddity: apparently Rosetta Stone's opening brief in the case was heavily redacted for no good reason, which seems problematic on such a high profile case that could impact a variety of technologies and services. Thankfully, Paul Levy saw this and questioned why there were so many redacted parts, and the lawyers have agreed to release an unredacted version of the brief.

Filed Under: advertising, keyword advertising, trademark
Companies: ebay, google, microsoft, rosetta stone, viacom

As Expected, Rosetta Stone Loses Badly To Google In Claiming Trademark Violations For AdWords

from the when-will-these-lawsuits-stop? dept

There have been so many baseless lawsuits against Google for selling trademarked keywords as part of its AdWords program, that you would think lawyers would recommend against even bothering. Google always wins -- as it should. First of all, despite what some people believe, trademark does not give you complete control over the mark. The purpose of trademark law is to avoid consumer confusion. More recently the whole "dilution" theory has been tacked on to trademark law as well, but that is still somewhat limited. Beyond that, if there is consumer confusion in an AdWords ad, Google is still the wrong party to sue. Instead, the liability belongs on whoever created the confusing ad.

While a lot of the more recent such cases have been from smaller companies, a lot more attention was paid to the news that language software firm Rosetta Stone sued Google over this issue last year. Eric Goldman, who's been tracking all of these types of lawsuits against Google, has a detailed discussion on the judge's ruling throwing out Rosetta Stone's case and giving a pretty complete victory to Google. Goldman notes that there are a few problems with the ruling, but it gets the big questions right. Now, hopefully, lawyers and companies will finally start to realize there's nothing illegal about Google selling ads on your trademarked terms.

Filed Under: adwords, trademark
Companies: google, rosetta stone

Secretive Patent Holder Sues Lots Of Companies For Remote Activation Software

from the gotta-get-it-done-before-bilski dept

Brian points us to the news of yet another questionable patent lawsuit filed by yet another shell company, yet again in Eastern Texas against a ton of software companies. The patent in question (5,222,134) is for a "secure system for activating personal computer software at remote locations," and was originally filed back in 1991 and granted in 1993 -- meaning that the patent is actually nearing end of life. Odd, then, that it was suddenly noticed that all these companies were infringing. The lawsuit is filed by a shell company called BetaNet, and no one seems willing to speak. The lawyers representing BetaNet won't say who is behind the company, or how they even got the patent. This is typical. Many of these types of lawsuits are filed by shell companies to hide who is actually behind them. As for the defendants, here's the list:

Adobe, Apple, Arial Software, Autodesk, Carbonite, Corel, Kodak, IBM, Intuit, Microsoft, McAfee, Online Holdings, Oracle, Rockwell, Rosetta Stone, SAP, Siemens, and Sony.

Obviously, none of those companies could have come up with ways to remotely activate software without this patent (yes, that's sarcasm). As the Register notes in the link above, even some of the software products listed as violating this patent don't seem to involve activation at all, raising serious questions about how they could possibly violate this patent. This sounds like yet another case of someone having read the book Rembrandt's in the Attic and deciding to go trolling for companies to sue with a meaningless patent.

Filed Under: activation, east texas, patents, software
Companies: adobe, apple, arial software, autodesk, betanet, carbonite, corel, ibm, intuit, kodak, mcafee, microsoft, online holdings, oracle, rockwell, rosetta stone, sap, siemens, sony