Almost three months after deciding to grant summary judgment in favor of Google in Rosetta Stone Ltd. v. Google, the Eastern District of Virginia finally released its opinion articulating the reasons behind the decision.   Specifically, the Court held that Google could not be held liable for trademark infringement or dilution based on its sale of keywords utilizing Rosetta Stone’s trademarks.   The decision was a coup for Google which was absolved of liability on every count brought by Rosetta Stone.
In perhaps the most significant portion of the decision, the Court held that Google’s use of a trademark within a keyword was “functional” and, therefore, did not amount to infringing use.  In coming to this conclusion, the Court noted that keywords “have an essential indexing function because they enable Google to readily identify in its database relevant information in response to a web user’s query.”   This seemingly brings the Court in conflict with other decisions – most notably the Ninth Circuit’s opinion in Playboy v. Netscape  – which have rejected the defense of trademark functionality in similar contexts.   Accordingly, it will be interesting to see how, or if, the Court’s interpretation of the doctrine is employed in future decisions examining the unauthorized use of trademarks in conducting internet commerce.

The Court also rejected Rosetta Stone’s attempt to hold Google secondarily liable for the infringing conduct of others – a decision based, in part, on its finding that Google’s “keyword suggestion tool” did not constitute an “inducement” to infringe.   Much of the Court’s rationale, however, was based Google’s efforts to avoid and remedy infringing activity (for example, the Court seemed charmed by the existence a Google “Trust & Safety team”); consequently, this portion of the decision may have limited applicability to future defendants.

Nevertheless, the decision will likely go down as an important one that should ‘translate’ into future victories for similarly situated defendants .

Access the decision here: