676 F.3d 144 (4th Cir. 2012), 10-2007, Rosetta Stone Ltd. v. Google, Inc.

Docket Nº:10-2007.
Citation:676 F.3d 144, 102 U.S.P.Q.2d 1473
Opinion Judge:TRAXLER, Chief Judge:
Party Name:ROSETTA STONE LTD, Plaintiff-Appellant, v. GOOGLE, INCORPORATED, Defendant-Appellee. The UK Intellectual Property Law Society, Amicus Curiae, Eric Goldman; Public Citizen; Martin Schwimmer, Limited Intervenors. International Trademark Association; Blues Destiny Records, LLC; Carfax, Incorporated; Ford Motor Company; Harmon International Industries,
Attorney:Clifford M. Sloan, Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, D.C., for Appellant. Margret Mary Caruso, Quinn, Emanuel, Urquhart & Sullivan, LLP, Redwood Shores, California, for Appellee. Mitchell S. Ettinger, Jennifer L. Spaziano, Skadden, Arps, Slate, Meagher & Flom, LLP, Washington...
Judge Panel:Before TRAXLER, Chief Judge, KEENAN, Circuit Judge, and HAMILTON, Senior Circuit Judge. Chief Judge TRAXLER wrote the opinion, in which Judge KEENAN and Senior Judge HAMILTON joined.
Case Date:April 09, 2012
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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676 F.3d 144 (4th Cir. 2012)

102 U.S.P.Q.2d 1473

ROSETTA STONE LTD, Plaintiff-Appellant,

v.

GOOGLE, INCORPORATED, Defendant-Appellee.

The UK Intellectual Property Law Society, Amicus Curiae,

Eric Goldman; Public Citizen; Martin Schwimmer, Limited Intervenors.

International Trademark Association; Blues Destiny Records, LLC; Carfax, Incorporated; Ford Motor Company; Harmon International Industries, Incorporated; The Media Institute; Viacom, Inc.; Burlington Coat Factory Warehouse Corporation; Business Software Alliance; Chanel, Incorporated; Coach, Incorporated; Government Employees Insurance Company; Harrah's Entertainment, Incorporated; Longchamp USA, Incorporated; National Football League; Oakley, Incorporated; Professional Golfers' Association of America, Incorporated; Rolls-Royce North America, Incorporated; S.A.S. Jean Cassegrain; Sunkist Growers, Incorporated; Swarovski North America, Ltd.; The Association for Competitive Technology; The Sunrider Corporation; Tivo, Incorporated; Tiffany & Company; Tumi, Incorporated; United Continental Holdings, Incorporated; 1-800 Contacts, Incorporated; Convatec, Incorporated; Guru Denim, Incorporated; Monster Cable Products, Incorporated; PetMed Express, Inc.; Volunteers of America, Amici Supporting Appellant,

Public Citizen; Public Knowledge; Electronic Frontier Foundation; eBay Incorporated; Yahoo! Incorporated, Amici Supporting Appellee.

No. 10-2007.

United States Court of Appeals, Fourth Circuit.

April 9, 2012

Argued: Sept. 22, 2011.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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ARGUED:

Clifford M. Sloan, Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, D.C., for Appellant.

Margret Mary Caruso, Quinn, Emanuel, Urquhart & Sullivan, LLP, Redwood Shores, California, for Appellee.

ON BRIEF:

Mitchell S. Ettinger, Jennifer L. Spaziano, Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, D.C., for Appellant.

Cheryl A. Galvin, Henry Lien, Austin D. Tarango, Quinn, Emanuel, Urquhart & Sullivan, LLP, Redwood Shores, California; Jonathan D. Frieden, Odin, Feldman & Pittleman, PC, Fairfax, Virginia, for Appellee.

Charles Lee Thomason, Spalding & Thomason, Bardstown, Kentucky, for The UK Intellectual Property Law Society, Amicus Curiae. David H. Bernstein, Debevoise & Plimpton LLP, New York, New York; Kurt E. Anderson, Giordano, Halleran & Ciesla, PC, Red Bank, New

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Jersey; A. Justin Ourso, III, Jones, Walker, Waechter, Poitevent, Carrere & Denegre LLP, Baton Rouge, Louisiana, for International Trademark Association, Amicus Supporting Appellant.

Marcia B. Paul, Kevan Choset, Davis Wright Tremaine LLP, New York, New York, Daniel P. Reing, Davis Wright Tremaine LLP, Washington, D.C., for Blues Destiny Records, LLC, Carfax, Incorporated, Harmon International Industries, Incorporated, The Media Institute, and Viacom, Inc.; Mark S. Sparschu, Brooks Kushman PC, Southfield, Michigan, for Ford Motor Company, Amici Supporting Appellant. Randall K. Miller, Arnold & Porter, McLean, Virginia, Roberta L. Horton, Tricia A. Cross, Brent S. LaBarge, Arnold & Porter LLP, Washington, D.C., for Burlington Coat Factory Warehouse Corporation, Business Software Alliance, Chanel, Incorporated, Coach, Incorporated, Government Employees Insurance Company, Harrah's Entertainment, Incorporated, Longchamp USA, Incorporated, National Football League, Oakley, Incorporated, Professional Golfers' Association of America, Incorporated, Rolls-Royce North America, Incorporated, S.A.S. Jean Cassegrain, Sunkist Growers, Incorporated, Swarovski North America, Ltd., The Association for Competitive Technology, The Sunrider Corporation, TiVo, Incorporated, Tiffany & Company, Tumi, Incorporated, and United Continental Holdings, Incorporated, Amici Supporting Appellant. Brad R. Newberg, Reed Smith LLP, Falls Church, Virginia, for 1-800 Contacts, Incorporated, Convatec, Incorporated, Guru Denim, Incorporated, Monster Cable Products, Incorporated, and PetMed Express, Inc., Amici Supporting Appellant. Thomas G. Southard, Karl Wm. Means, Alan B. Sternstein, Shulman, Rogers, Gandal, Pordy & Ecker, PA, Potomac, Maryland, for Volunteers of America, Amicus Supporting Appellant.

Paul Alan Levy, Public Citizen Litigation Group, Washington, D.C., for Public Citizen, Amicus Supporting Appellee.

Harold Feld, John Bergmayer, Rashmi Rangnath, Public Knowledge, Washington, D.C.; Corynne McSherry, Electronic Frontier Foundation, San Francisco, California, for Public Knowledge and Electronic Frontier Foundation, Amici Supporting Appellee.

R. Bruce Rich, Jonathan Bloom, Mark J. Fiore, Weil, Gotshal & Manges LLP, New York, New York, Michael Lyle, Weil, Gotshal & Manges LLP, Washington, D.C., for Yahoo! Incorporated and eBay, Incorporated, Amici Supporting Appellee.

Before TRAXLER, Chief Judge, KEENAN, Circuit Judge, and HAMILTON, Senior Circuit Judge.

Affirmed in part, vacated in part, and remanded by published opinion.

Chief Judge TRAXLER wrote the opinion, in which Judge KEENAN and Senior Judge HAMILTON joined.

OPINION

TRAXLER, Chief Judge:

Appellant Rosetta Stone Ltd. appeals from an order, see Rosetta Stone Ltd. v. Google Inc., 730 F.Supp.2d 531 (E.D.Va.2010), granting summary judgment against Rosetta Stone on its claims against Appellee Google Inc. for trademark infringement, see 15 U.S.C. § 1114(1)(a); contributory and vicarious trademark infringement; and trademark dilution, see 15 U.S.C. § 1125(c)(1). Rosetta Stone also appeals from an order dismissing its unjust enrichment claim under Virginia Law. See Rosetta Stone Ltd. v. Google Inc., 732 F.Supp.2d 628 (E.D.Va.2010). For the reasons that follow, we affirm the district court's order with respect to the vicarious infringement and unjust enrichment claims; however, we vacate the district

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court's order with respect to the direct infringement, contributory infringement and dilution claims and remand these claims for further proceedings.

I. Background

In conducting a de novo review of the district court's order granting summary judgment in favor of Google, " we view the facts and draw all reasonable inferences therefrom in the light most favorable to [Rosetta Stone], as the nonmoving party." Georgia P. Consumer Prods., LP v. Von Drehle Corp., 618 F.3d 441, 445 (4th Cir.2010). Bearing this standard in mind, we review the underlying facts briefly.

Rosetta Stone began in 1992 as a small, family-owned business that marketed its language-learning software under the brand name " Rosetta Stone." 1 By 2006, Rosetta Stone had become an industry leader in technology-based language-learning products and online services, and, by January 2010, it had become a publicly traded corporation with 1,738 employees and gross revenues of approximately $252 million. Its products consist of " software, online services and audio practice tools" available in over thirty languages. J.A. 203.

Rosetta Stone owns and uses several registered marks in connection with its products and services: ROSETTA STONE, ROSETTA STONE LANGUAGE LEARNING SUCCESS, ROSETTASTONE.COM, and ROSETTA WORLD. Using this family of registered marks, Rosetta Stone markets its brand through various types of media, including the Internet, television, radio, magazines and other print media, and kiosks in public venues. From 2003 through 2009, Rosetta Stone spent approximately $57 million for television and radio advertising, $40 million for print media marketing, and $12.5 million to advertise on the Internet. In 2009, Rosetta Stone's marks enjoyed the highest level of brand recognition by far in the domestic language-learning market.2 Rosetta Stone has achieved international success as well, with its products in use in over 150 countries.

Rosetta Stone began advertising in connection with Google's website and online services in 2002 and has continued to do so since that time. Google operates one of the world's most popular Internet search engines— programs that enable individuals to find websites and online content, generally through the use of a " keyword" search. See Retail Servs., Inc. v. Freebies Publ'g, 364 F.3d 535, 541 n. 1 (4th Cir.2004). When an Internet user enters a word or phrase— the keyword or keywords— into Google's search engine, Google returns a results list of links to

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websites that the search engine has determined to be relevant based on a proprietary algorithm.

In addition to the natural list of results produced by the 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. Most sponsors advertising with Google pay on a " cost-per-click" basis, meaning that the advertiser pays whenever a user of Google's search engine clicks on the sponsored link.

Google displays up to three sponsored links in a highlighted box immediately above the natural search results, and it also displays sponsored links to the right of the search results, but separated by a vertical line. As this suggests, more than one sponsor can purchase the same keyword and have a link displayed when a search for that keyword is conducted. Would-be advertisers purchase their desired keywords through an auction where advertisers bid...

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