Posted July 13, 2009 7:51 am by with 12 comments

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Rosetta StoneRosetta Stone, the company that makes the software that can help you learn any language (according to their advertising that is) is joining the line of companies who are suing Google over trademark infringement in AdWords campaigns. The Washington Post reports says that the company has filed their suit in the U.S. District Court for the Eastern District of Virginia

Rosetta Stone asked the court to stop Google from allowing other firms — including competitors — to use its trademarks to sell ads associated with online searches.

“Google and its advertisers benefit financially from and trade off the goodwill and reputation of Rosetta Stone without incurring the substantial expense that Rosetta Stone has incurred in building up its popularity, name recognition and brand loyalty,” Michael Wu, general counsel of Rosetta Stone, said in a statement.

We talked about this potential tsunami of trademark concerns when Google announced its plans to allow advertisers to use other trademarked names in their ads. At the crux of the issue according to trademark experts is whether consumers are being confused by the ads. In other words, are they being duped? Of course they are. They’re consumers. Marketers are trying to ‘convince’ people to use their version of whatever product and they’ll usually do whatever they can to that end.

“That’s where things are unclear,” Santa Clara University law professor Eric Goldman said. “There’s not a lot of social science explaining what consumers think when they do search and if there is consumer confusion.”

Let’s get this straight. Google is opening up this area for more revenue. It’s pretty simple. One would have to suspect that they did a pretty significant analysis of how many lawsuits would potentially arise from this and what the payout might be. Weigh that against the higher revenue from more paid search advertisers and Google will say that this policy won’t do any evil. It’ll just make more money.

What’s your feeling about this policy that Google enacted in June (which was already in place at Yahoo and Microsoft, by the way)? Should companies just learn to live with it and take the extra brand recognition or should there be complete ownership of certain trademarked terms by the trademark owners? Do you think Google even really cares?

  • “In other words, are they being duped? Of course they are. They’re consumers. Marketers are trying to ‘convince’ people to use their version of whatever product and they’ll usually do whatever they can to that end.”

    The above paragraph should be required reading for anyone considering buying online. Shared with my network!

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  • Companies have to protect their trademarked brands. I hope they win. Google shouldn’t allow others to bid on someone else’s trademark. I do think it can be confusing to consumers when ads for other companies show up in the sponsored results.

    Jill’s last blog post..Measuring Your Marketing: Campaign Tracking via Google Analytics – Part 1

  • I am of mixed feelings on the issue. I think that people should are smart enough to recognize when they are being sold an imitation product. I also think that advertising on someone else’s brand increases competition, which can only be good for the market. Television offers comparison advertising all of the time, so I don’t see how this is all that different.

  • Mike G

    This is excellent. Google is always preaching “don’t be evil” – I love the hypocrisy. I found a competitor using my TM and was really upset. I sent goolge three notices of TM infringement via their online webform and each time it was ignored. I sent a cease and desist letter to my competitor. I felt like they were misleading the consumer, stealing traffic and real dollars from the use of my name. I’m behind RS on this one.

  • Roy

    Will prospects be confused? Are there bears in the woods?
    Will some be duped? If you don’t believe that, I have some cheap, ocean-front property for sale, in Nebraska. Do you think Google cares? Passionately… about making money. Do you think Google will stop this type of advertising? When pigs fly or chickens go “oink”, whichever comes first.

  • Clif

    Google is not misleading any consumers. They are a merely a medium. The advertisers are misleading consumers. If I rent space on a billboard to advertise that I sell authentic Prada handbags, but I really don’t – only fakes – then the rip-off is solely in my hands, not the owner of the billboard. Would the billboard owner be a good guy for canceling my contract and removing my advertisement – yes, but is it his responsibility? Absolutely not.

  • I’m going to side with Rosetta Stone on this one too. How did Rosetta Stone get its name? Because they created a damn good product. If a competitor of Rosetta Stone actually had a good product, wouldn’t consumers be searching for the competitor’s name instead?

    It is not fair for Google to assume that a consumer wants a copycat application that isn’t a good performer. It is not fair for the consumer to be duped into buying something that he didn’t actually want simply because Google, which is supposed to be relevant (and perhaps in this case, accurate) is leading the consumer to buy the wrong product.

    Google might think it’s best to get more money in this economy, but this is a sticky situation and speaks volumes of how ethically questionable the entity is becoming.

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  • I don’t believe this is good competition. Does Google, care? No. But, they will care if they lose in court. The argument has been mentioned before about it being the same as TV. No, it isn’t. You don’t have Coke advertising using Pepsi’s name or visa-versa. You don’t have smaller companies like Trader Joes, trying to advertise as if they are Safeway. It is an infringement on a trademark.

    Matter of fact, you rarely see an ad where a someone directly names a competitor. They may imply it or show a product similar such as a can of soda colored a certain way, but they can’t use the competitors name with out their permission.

    Competitors should not be able to bid on trademarked names, period. Companies such as Rosetta Stone have spent who knows how much on advertising,etc., developing their name. Someone else should not profit from it.

  • ChrisCD – you see brands advertising on TV using other brands all the time. They do comparison advertising. Coke compares itself to Pepsi, Kia compare themselves to other Toyota. As long as these companies are comparing and not posing as – which Google’s T&C’s expressly forbid – then I don’t see a conflict.

    Personally, if I go looking for a product and someone (in this case Google) recommends something else as potentially cheaper, faster, or better, I’m at least going to look at it.

    Oh, and Tamara, I don’t think anyone is actually getting duped here. It’s not like Coke is advertising on Pepsi and saying ‘we are Pepsi.’ At most they are getting tricked into visiting a competitor’s website. They’re not being forced into buying something they don’t want.

    Cory Huff’s last blog post..Capitalism for Creative People

  • Dean Fox

    Sorry, but the Prada bag example misstates the issue here, because they’re not suing overcounterfeit copies of Rosetta Stone-branded products. Fakes are clearly illegal, but Google’s practice of allowing advertisers to key their ad placements to searches for another company’s trademarked, brand-named products is not . . . yet. It should be.

    The resulting search results surround the legitimate page listings with paid ads above and to the side. It’s logical to assume that those ads may be siphoning away customers who were responding to the company’s various marketing campaigns or word-of-mouth, denying them of sales they might have legitimately earned. The ads wouldn’t be appearing on the page had the consumer not been looking for the trademarked product.

    Some will argue that this practice gives the consumer a more complete search result, and I can agree with that. Although I can’t fault Google for making this possible, it’s just not right, and I hope the companies that are suing to end this are victorious.

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  • Huh? Presumably the situation is different in the US or G have already banned most ads but it is very hard to know, from the UK, what all the fuss is about.

    A search for “Rosetta Stone” on yielded 3 sponsored results and gave 4. In both cases one was Rosetta Stone itself and another was Amazon; the third was a dubious looking, “review” page that appeared designed solely to direct traffic towards an alternative product . The fourth was a site legitimately advertising an alternative product without use of the name in the ad

    In general, the primary purpose of trademark law is, surely, to defend the public from misrepresentation and not to protect the claimed “goodwill and reputation” of the trademark owner (which, in the case of Rosetta Stone, is, for me, precisely zero since I have never heard of them.) Therefore, as long as there is no attempt to misrepresent themselves, advertisers are doing nothing wrong and Google has no case to answer. If I am a reseller of a trademarked product should I not be allowed to advertize that fact? And, if I sell a legitimate alternative product should I not be allowed to advertize that fact?

    Ultimately, if it were proven that Google is trading illegally off the goodwill and reputation of trademark owners, then it is going to have a dramatic effect on PPC advertising and even the behaviour of search engines. Presumably, for any search for any trademarked term, Google, or any other search engine, would only be allowed to show one result in paid ads or natural SERPS – that of the trademark owner. I cannot see any benefit in creating such a monopolized system for anyone except, of course, the trademark owner!