Rosetta Stone v. Google Appellate Briefs: Google’s Opening Brief and Rosetta Stone’s Unredacted Brief

By Eric Goldman

Due to the intervention of Public Citizen, Rosetta Stone filed an unredacted brief in its appeal of Rosetta Stone v. Google. The actual redacted material seemed hardly worthy of confidentiality; in some cases, the information already was clearly public, and in other cases the information was so inconsequential that it strains my mind trying to think why anyone cared about its confidentiality.

I’ve gone through the redactions, and a few of the more interesting tidbits of newly revealed information:

– discussion of Google’s consumer survey in 2004 when third party trademarks appeared in the ad copy (page 8). One survey distillation said that there was an “overall very high rate of consumer confusion” with an average of 30-40% and 94% of consumers confused at least once. I’d need to parse the actual studies, but we should remember this was 2004, when Google’s method of presenting advertising was relatively new. Six years later, I would love to see the stats if we replicated that study. I am confident there would be much lower rates; and compared against a baseline level of confusion among online users generally regardless of what they see, my guess is that the numbers would be pretty close to the baseline.

– discussion of Google’s trademark policy change in 2009. The brief argues that the 2004 survey evidence shows Google knew consumers would be confused in 2009. Given the many changes in technology and consumer expectations from 2004 to 2009, that’s not really a credible argument to me. More remarkable to me is that Google says it didn’t test consumer reactions to this policy change at all. Google is known for being an obsessive tester of UI changes, so to fly blind on this seems conspicuously anomalous.

The evidence also indicates that Google expected to generate at least $100M of new annual incremental revenues from the 2009 policy change, and up to $1B annual. For those pundits who were loving Google’s year-over-year profit increases from 2009 to 2010, we have a partial explanation.

– Rosetta Stone has spent approx. $100M on advertising (page 23). It would be interesting to compare how much Rosetta Stone is wasting on legal fees in this case and how far they could advance their marketing objectives if they redirected those litigation dollars.

– Both Google’s current and former Chief Trademark Counsels (Terri Chen and Rose Hagan, respectively) “could not tell that three of the sponsored links – two ads for counterfeiters and one for a Rosetta Stone competitor – were not advertising the sale of genuine Rosetta Stone software” (page 36).

This seems to cut against Rosetta Stone’s position. If Google’s most experienced trademark counsel can’t spot the ads for fakes, then how does Rosetta Stone expect lower-level employees or machines to do so?

In this respect, I’m reminded of the ludicrous arguments from Viacom about YouTube’s ability to spot fake uploads. Viacom and its lawyers couldn’t do it (recall that Viacom’s lawyers TWICE withdrew its complaint about videos that it thought were illicit uploads but weren’t); so how could Viacom expect YouTube to be more accurate than its lawyers? Ditto for Rosetta Stone.

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Unfortunately, Google’s opening appellate brief is similarly swiss-cheesed by redactions. I believe Paul Levy will be working to get those redactions revealed. Substantively, Google’s brief covers predictable ground; I thought this paragraph nicely distilled Google’s factual position:

The core facts relating to the alleged trademark infringement are undisputed. It is undisputed that Google operates an advertising program through which advertisers can bid for the opportunity to have their ads displayed next to search results in response to user queries that contain trademarks. It is undisputed that Google does not prohibit resellers and information websites from using trademarks in ad text to refer to genuine products. It is undisputed that advertisers are responsible for their selection of keywords and ad text and that Google contractually prohibits advertising counterfeit goods or otherwise infringing intellectual property. It is undisputed that Google takes substantial proactive and reactive efforts to enforce its policies. It is also undisputed that counterfeiters exist and sometimes violate Google’s policies and take evasive actions to further their own agendas. It is undisputed that Google has never suggested to any counterfeiter that it copy and sell fake Rosetta Stone software, or otherwise induced any counterfeiter to do so. And it is undisputed that Google responded to Rosetta

Stone’s complaints about ads that were not in compliance with Google’s policies.

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The case library:

* Google’s opening response brief

* UK Intellectual Property Law Society amicus brief in support of neither party

* Rosetta Stone’s opening appellate brief: redacted and unredacted.

* INTA’s amicus brief in favor of Rosetta Stone.

* Carfax et al amicus brief in favor of Rosetta Stone.

* Association for Competitive Technology et al amicus brief in favor of Rosetta Stone.

* ConvaTec et al amicus brief in favor of Rosetta Stone.

* Volunteers of America amicus brief in favor of Rosetta Stone.

* District court’s main opinion granting SJ. My blog post.

* District court’s opinion granting a motion to dismiss on the unjust enrichment claim.

* Rosetta Stone’s initial complaint. My blog post.