Gary Rinkerman's on "Rosetta Stone vs. Google"

And here comes Gary's opinion on "Rosetta Stone vs. Google":

In "Rosetta Stone vs. Google", the Fourth Circuit Court of Appeals held that evidence may show that Google's practice of selling rights to use the "Rosetta Stone" trademarks as keywords in the Google AdWord program constitutes: (a) direct trademark infringement; (b) contributory trademark infringement, and (c) trademark dilution.

As with the YouTube web content case, the number of amici who filed briefs in the Rosetta Stone case was in the dozens. Because of its potentially far-reaching effects and influence, the Rosetta Stone case is of substantial interest to: (a) trademark owners; and (b) website and search engine owners that use, or allow the use of, third-party trademarks to attract users to products or services offered by entities that do not own and are not licensed to use the marks.

Brief Background Google maintains an "AdWord" program that operates as follows: In addition to the natural list of results produced by a keyword search, Google’s search engine also displays paid advertisements known as "Sponsored Links" with the natural results of an Internet search. Google’s AdWords advertising platform permits a sponsor to "purchase" keywords that trigger the appearance of the sponsor’s advertisement and link when the keyword is entered as a search term. In other words, an advertiser purchases the right to have his ad and accompanying link displayed with the search results for a keyword or combination of words relevant to the advertiser’s business. Rosetta Stone, a publisher of language-learning software and products, brought suit against Google's practice of allowing third parties to purchase rights to use Rosetta Stone's trademarks as "key words" in Google's AdWord program.

Key Holdings Notably, because the issue was whether summary judgment should have been granted, the Court in the Rosetta Stone case viewed the evidence in a light most favorable to Rosetta Stone. The Court's key holdings are as follows:

As to direct trademark infringement, the Court found that there was evidence (including internal Google studies) that a jury might construe as supporting Rosetta Stone's claim that Google's use of the Rosetta Stone trademark in Google's AdWord program produced actual confusion and was likely to cause such confusion as to Rosetta's sponsorship of, or relation to, third party sites that sold counterfeit and otherwise improper copies of Rosetta Stone's products. Moreover, the Court noted that "a reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks" (emphasis in original). (Also, particularly notable is that the evidence submitted by Rosetta Stone included deposition testimony from Google's in house counsel.)

As to contributory trademark infringement, the Court stated that, "[t]he most significant evidence in this regard reflected Google’s purported allowance of known infringers and counterfeiters to bid on the Rosetta Stone marks as keywords. . . . [w]e conclude that the evidence recited by the district court is sufficient to establish a question of fact as to whether Google continued to supply its services to known infringers." However, in a somewhat truncated portion of the opinion, the Court refused to reverse the grant of summary judgment against Rosetta's assertion that Google was also vicariously liable for the counterfeiter's use of Google's AdWords program to sell counterfeit products. In short, the Court held that there was no evidence that Google acted in concert with sellers of counterfeit Rosetta Stone products "to control the counterfeit Rosetta Stone products." (The Court also upheld summary judgment against Rosetta's Virginia state unjust enrichment claim, holding that the evidence did not support the contention that Google should paid for use of third-party trademarks in Google's AdWord program.)

As to Rosetta's trademark dilution claim, the Court held that lower court erred when it held that Rosetta was required to show that Google used the Rosetta Stone marks as an identifiers for Google's own goods or services. Therefore, the Court remanded this issue back to the lower court for findings on, e.g., fair use.

As noted above, and as the number of amici also demonstrate, the Viacom and Rosetta Stone cases demonstrate that copyright and trademark issues in the Internet context are currently "hotbeds" of litigation and that the outcomes of such cases can have substantial effects on trademark owners, copyright owners and website operators.

Best,

Gary

Gary Rinkerman's on "Viacom vs. YouTube"

Gary Rinkerman (Drinker Biddle and Reath LLP) has kindly send us his opinion on two recent cases  before US Courts involving Google: "Viacom vs. YouTube" is the first of those cases.

In one of the most "watched" cases on the "safe harbor" provisions of the Digital Millennium Copyright Act ("DMCA"), the Second Circuit issued its opinion in "Viacom v. YouTube". In essence, Viacom sought more than a billion dollars in copyright infringement damages for tens of thousands of video clips that were uploaded to YouTube by users and appeared on the YouTube website between 2005 and 2008.

The Court's main holdings are:

1. The Court affirmed the lower court's ruling that the "safe harbor" shelter from copyright liability will be forfeited if the service provider has: (a) actual knowledge that the subject material is infringing; or (b) is aware of facts or circumstances from which the infringing activity is apparent. However, in order to disqualify the service provider from safe harbor protection, the knowledge must be "knowledge of specific and identifiable infringements."

ALSO, the Court reversed the lower court's grant of summary judgment of non-liability on the part of the defendants. A key factor in the reversal was evidence that, in determining how much it should bid for global rights for Premier League soccer content, YouTube searched its own site to gather information on how many "hits" occurred with regard to such unlicensed content already posted on YouTube. In addition, internal YouTube memoranda regarding the potential to preemptively remove "blatantly infringing" material actually identified specific examples of such materials on the YouTube site. Additional discussions and identification of specific, infringing content also were present in internal YouTube emails. Therefore, the Court remanded for further proceedings on the issue of specific knowledge in light of the above-identified evidence.

ALSO, the Court stated that "willful blindness" to specific instances of infringement can abrogate DMCA immunity, although there is no general duty to monitor.

2. Rejecting another aspect of the lower court approach, the Court held that, in order to remove the safe harbor protection of the DMCA, the "right and ability to control" the content on the part of the service provider "requires something more that the ability to remove or block access to materials posted on a service provider's website." On the other hand, the Court stressed that "the right and ability to control" abrogation of DMCA immunitydoes not require specific knowledge of particular infringements. Therefore, the Court remanded on the issue of whether plaintiffs "adduced sufficient evidence to allow a reasonable jury to conclude that YouTube had the right and ability to control the infringing activity and received a financial benefit attributable to that activity."

3. In defining what is meant by DMCA-sheltered "storage" of accused content, the Court agreed that several software functions that, e.g., facilitated access and display fell within a broad definition of "storage." HOWEVER, while certain software functions that facilitated access and playback did not trigger liability, the Court remanded on the issue of whether syndication by YouTube of content specifically selected by YouTube for wireless access (including transcoding the video content for display on wireless equipment) constitutes mere "storage." In the Court's view, plaintiffs argued "with some force" that this business transaction fell outside the definition of mere "storage." The Court therefore remanded for a factual determination and application of law on the issue of whether any of the plaintiff's content was included in the materials specifically selected by YouTube for transcoding for wireless access.

4. The Court rejected the argument that YouTube's practice of restricting its content identification technology to only certain designated "partners" violated the requirement that the DMCA-sheltered service providers use standard technical measures to identify and terminate repeat infringers. In other words, the Court held that YouTube's policy of not making its proprietary search mechanisms available for general use did not disqualify YouTube from protection under the DMCA.

We anticipate that there will likely be further vigorous dispute regarding the Court's remand - as well as a continued trend in submission of amicus briefs on these and related issues. (The current opinion lists more than thirty such amicus briefs.)

Best,

Gary