act et al amicus brief in rosetta stone v google

8/8/2019 ACT et al Amicus Brief in Rosetta Stone v Google

1/59

RECORD NUMBER: 10-2007

United States Court of Appealsfor the

Fourth CircuitROSETTA STONE LTD.,

Appellant,

v.

GOOGLE INC.,Appellee.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA AT ALEXANDRIA

BRIEF OF AMICI CURIAE IN SUPPORTOF APPELLANT ROSETTA STONE LTD.

RANDALL K. MILLER

ARNOLD &PORTER LLP

1600 Tysons Boulevard

Suite 900

McLean, Virginia 22102

(703) 720-7000

ROBERTA L. HORTON

TRICIA A. CROSS

BRENT S. LABARGE

ARNOLD &PORTER LLP

555 Twelfth Street, N.W.

Washington, DC 20004

(202) 942-5000

Counsel for Amici Curiae

COUNSEL PRESS VA (800) 275-0668

Case: 10-2007 Document: 37-1 Date Filed: 11/01/2010 Page: 1


2/59

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUITDISCLOSURE OF CORPORATE AFFILIATIONS AND OTHER INTERESTS

Only one form needs to be completed for a party even if the party is represented by more than

one attorney. Disclosures must be filed on behalf of all parties to a civil, agency, bankruptcy ormandamus case. Corporate defendants in a criminal or post-conviction case and corporate amici

curiae are required to file disclosure statements. Counsel has a continuing duty to update this

information.

_______ Caption: __________________________________________________No.

Pursuant to FRAP 26.1 and Local Rule 26.1,

______________________ who is _______________________, makes the following disclosure:(name of party/amicus) (appellant/appellee/amicus)

1. Is party/amicus a publicly held corporation or other publicly held entity? YES NO2. Does party/amicus have any parent corporations? YES NO

If yes, identify all parent corporations, including grandparent and great-grandparent

corporations:

3. Is 10% or more of the stock of a party/amicus owned by a publicly held corporation or

other publicly held entity? YES NOIf yes, identify all such owners:

4. Is there any other publicly held corporation or other publicly held entity that has a direct

financial interest in the outcome of the litigation (Local Rule 26.1(b))? YES NOIf yes, identify entity and nature of interest:

5. Is party a trade association? (amici curiae do not complete this question) YES NO

If yes, identify any publicly held member whose stock or equity value could be affectedsubstantially by the outcome of the proceeding or whose claims the trade association is

pursuing in a representative capacity, or state that there is no such member:

6. Does this case arise out of a bankruptcy proceeding? YES NO$*!4)1"!,().2,*4!%.4!20312))!%.(!2+)!-)-&)01!/*!%.4!'0)(,2/015!'/--,22))#

CERTIFICATE OF SERVICE

**************************

I certify that on _________________ the foregoing document was served on all parties or their

counsel of record through the CM/ECF system if they are registered users or, if they are not, by

serving a true and correct copy at the addresses listed below:

_______________________________ ________________________(signature) (date)

10-2007

11/1/2010

/s/ Brent S. LaBarge 11/1/2010

Rosetta Stone Ltd. v. Google Inc.

amicusThe Association for Competitive

Technology



3/59

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

DISCLOSURE OF CORPORATE AFFILIATIONS AND OTHER INTERESTS

Only one form needs to be completed for a party even if the party is represented by more thanone attorney. Disclosures must be filed on behalf of all parties to a civil, agency, bankruptcy or

mandamus case. Corporate defendants in a criminal or post-conviction case and corporate amici


information.

_______ Caption: __________________________________________________No.


______________________ who is _______________________, makes the following disclosure:

(name of party/amicus) (appellant/appellee/amicus)



corporations:


other publicly held entity? YES NO

If yes, identify all such owners:






6. Does this case arise out of a bankruptcy proceeding? YES NO

If yes, identify any trustee and the members of any creditors committee:


**************************




_______________________________ _______

(signature) (date)

Burlington Coat Factory

Warehouse Corporation

Parent: Burlington Coat Factory Investment Holdings, Inc.;Grandparent: Burlington Coat Factory Holdings, Inc.

10-2007

11/1/2010



amicus



4/59





information.

_______ Caption: __________________________________________________No.





corporations:










**************************




_______________________________ ________________________(signature) (date)

10-2007

11/1/2010



Business Software Alliance amicus

4

4

4

4

4



5/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Chanel, Inc. amicus



6/59


7/59





information.

_______ Caption: __________________________________________________No.





corporations:










**************************




_______________________________ ________________________(signature) (date)

10-2007

11/1/2010



Government EmployeesInsurance Company amicus

4

4

Parent: GEICO Corporation. GEICO Corp. is an indirect subsidiary of Berkshire Hathaway Inc.

4

4

4



8/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Harrah's Entertainment, Inc. amicus



9/59


10/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Longchamp USA, Inc. amicus

S.A.S. Jean Cassegrain



11/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



National Football League amicus



12/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Oakley, Inc. amicus

Luxottica U.S. Holdings Corp.

Luxottica Group S.p.A.



13/59





information.

_______ Caption: __________________________________________________No.





corporations:










**************************




_______________________________ ________________________(signature) (date)

10-2007

11/1/2010



The Professional Golfers'Association of America Amicus

4

4

4

4

4



14/59





information.

_______ Caption: __________________________________________________No.





corporations:








6. Does this case arise out of a bankruptcy proceeding? YES NO$*!4)1"!,().2,*4!%.4!20312))!%.(!2+)!-)-&)01!/*!%.4!'0)(,2/015!'/--,22))#


**************************




_______________________________ ________________________(signature) (date)

10-2007

November 1, 2010


Rolls-Royce North America, Inc. Amicus

Rolls-Royce North America Holdings, Inc.; Rolls-Royce plc; Rolls-Royce Group plc

Rolls-Royce Group plc is publicly traded on the London Stock Exchange

amicus

11/1/2010




15/59





information.

_______ Caption: __________________________________________________No.





corporations:










**************************




_______________________________ ________________________(signature) (date)

10-2007

11/1/2010



Sunkist Growers, Inc.amicus

4

4

4

4

4



16/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



The Sunrider Corporation amicus



17/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Swarovski North America Ltd amicus

Parent: Swarovski U.S. Holdings Limited; Grandparent: Swarovski International Holding AG



18/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Tiffany & Co. amicus



19/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



TiVo Inc. amicus



20/59






information.

_______ Caption: __________________________________________________No.






corporations:












**************************




_______________________________ _______

(signature) (date)

10-2007

11/1/2010



Tumi, Inc. amicus

Parent: Tumi II, LLC; Grandparent: Tumi I, Inc.



21/59


22/59

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES .................................................................................... ii

Page

I.

IDENTITY OF AMICI ....................................................................................1

II. INTEREST OF AMICI CURIAE AND AUTHORITY TO FILE ................. 8

III. ARGUMENT .................................................................................................12

A. The District Court Imposed Improper Requirements for a DilutionClaim ...................................................................................................12

1. Likelihood of Dilution, Not the Actual Harm Standard

Espoused by the District Court, is the Correct Measure ...........13

a. Dilution by Blurring Does Not Require a Showing ofActual Harm ....................................................................14

b. Dilution by Tarnishment Likewise Does Not Require aShowing of Actual Harm ................................................17

2. Dilution May Lie Even if the Parties Are NotCompetitors ...............................................................................18

3.

A Dilution Claim may be Actionable Even if theDefendant Does Not Use the Mark on its Own Goods orServices .....................................................................................19

B. The District Court Has Misapplied the Functionality Defense ...........20

1. The District Courts Ruling is Contrary to the PrinciplesUnderlying the Functionality Doctrine .....................................22

2. The District Court Erred in Applying the Functionality

Doctrine to Non-functional Trademarks ...................................24

3. Words and Phrases Serve Neither a Utilitarian Nor anAesthetically Functional Purpose .............................................26

IV. CONCLUSION ..............................................................................................30



23/59

ii

TABLE OF AUTHORITIES

Page(s)CASES

Am. Online, Inc. v. AT & T Corp.,

243 F.3d 812 (4th Cir. 2001) ..............................................................................

:

28

Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc.,457 F.3d 1062 (9th Cir. 2006) ................................................................ 22, 25, 26

Boston Prof. Hockey Assn, Inc. v. Dallas Cap & Emblem Mfg., Inc.,510 F.2d 1004 (5th Cir.1975) ............................................................................. 25

Brunswick Corp. v. British Seagull Ltd.,35 F.3d 1527 (Fed. Cir. 1994) ............................................................................ 19

Compaq Computer Corp. v. Procom Technology, Inc.,908 F. Supp. 1409 (S.D. Tex. 1995) ............................................................. 28, 29

Designer Skin, L.L.C. v. S & L Vitamins, Inc.,560 F. Supp. 2d 811 (D. Ariz. 2008) .................................................................. 24

Ford Motor Co. v. Lloyd Design Corp.,184 F. Supp. 2d 665 (E.D. Mich. 2002) ............................................................. 25

Home Builders Assn of Greater St. Louis v. L&L Exhibition Mgmt., Inc.,226 F.3d 944 (8th Cir. 2000) .............................................................................. 26

In re Armament Sys. & Procedures, Inc.,Serial No. 75/107678, 2005 WL 2451651 (T.T.A.B. Sept. 12, 2005) ............... 26

Jay Franco & Sons, Inc. v. Franek,615 F.3d 855 (7th Cir. 2010) ........................................................................ 22, 23

Kellogg Co. v. Exxon Corp.,209 F.3d 562 (6th Cir. 2000) .............................................................................. 17

Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC,507 F.3d 252 (4th Cir. 2007) .......................................................................passim

Moseley v. V Secret Catalogue, Inc.,537 U.S. 418 (2003) ...................................................................................... 12, 16



24/59

iii

Playboy Enters., Inc. v. Netscape Commcns Corp.,354 F.3d 1020 (9th Cir. 2004) ............................................................................ 24

Playboy Enters., Inc. v. Welles,279 F.3d 796 (9th Cir. 2002) .............................................................................. 23

Rosetta Stone Ltd. v. Google Inc. ,No. 1:09 CV 736 (GBLT/TCB),2010 WL 3063152 (E.D. Va. Aug. 3, 2010) ...............................................passim

Sega Enters. Ltd. v. Accolade, Inc.,977 F.2d 1510 (9th Cir. 1992) ...................................................................... 28, 29

Starbucks Corp. v. Wolfes Borough Coffee, Inc.,588 F.3d 97 (2d Cir. 2009) ................................................................................. 16

Stoller v. Sutech U.S.A., Inc.,199 F. Appx 954 (Fed. Cir. 2006) ..................................................................... 26

Tools USA & Equip. Co. v. Champ Frame Straightening Equip. Inc.,87 F.3d 654 (4th Cir. 1996) ................................................................................ 27

TrafFix Devices, Inc. v. Mktg. Displays, Inc.,532 U.S. 23 (2001) ........................................................................................ 19, 22

V Secret Catalogue, Inc. v. Moseley,605 F.3d 382 (6th Cir. 2010) ..................................................................12, 13, 14

Visa Intl Serv. Assn v. JSL Corp.,610 F.3d 1088 (9th Cir. 2010) ...................................................................... 13, 18

Vuitton et Fils S.A. v. J. Young Enters., Inc.,644 F.2d 769 (9th Cir. 1981) .............................................................................. 25

STATUTES

15 U.S.C. 1125 ...............................................................................................passim

:

OTHER AUTHORITIES

Google AdWords Third Party Authorization Request,https://services.google.com/inquiry/aw_tmauth (last visited Oct. 29,2010). .................................................................................................................. 21

:



25/59


26/59

1

I. IDENTITY OF AMICI1. The Association for Competitive Technology (ACT), with offices in

Washington, D.C. and Belgium, Brussels, is an international grassroots advocacy

and education organization representing more than 3,000 small and mid-size

information technology firms from around the world. ACT is the only

organization focused on the needs of small business innovators from around the

world. ACT, established in 1998, advocates for an environment that inspires and

rewards innovation. ACT also provides resources through the INNOVATORS

NETWORK to help its members leverage their intellectual assets to raise capital,

create jobs and continue innovating.

2. Burlington Coat Factory Warehouse Corporation (BCF) is aprivately-held company that has, since 1972, operated a chain of retail stores

selling mens, womens and childrens apparel, accessories, gifts, infantile

furniture and home products under the registered service mark BURLINGTON

COAT FACTORY. At the present time, there are over 435 brick-and-mortar

stores operating under that registered mark in 44 states. Since 1995, BCF has also

actively sold the same product categories on the internet through its website

www.coat.com.

3. The Business Software Alliance (BSA) is an association of theworlds leading software and hardware technology companies. On behalf of its



27/59

2

members, BSA promotes policies that foster innovation, growth, and a competitive

marketplace for commercial software and related technologies. BSA members rely

on trademark, copyright and patent protection to establish property rights in their

critical assets and provide essential legal protection for their substantial

investments in those assets. As a group they hold a significant number of

trademarks, copyrights and patents. Because intellectual property policy is vitally

important to promoting the innovation that has kept the United States at the

forefront of software development, BSA members have a strong stake in the proper

functioning of the U.S. intellectual property system.

4. Chanel, Inc. (Chanel) manufactures and distributes high qualityluxury goods worldwide under multiple famous marks. Chanel is the owner and/or

exclusive licensee of all rights in and to the registered mark CHANEL and

several highly recognizable design marks for use on shoes, boots and sunglasses.

5. Coach, Inc. (Coach) was founded more than sixty years ago as afamily-run workshop in Manhattan. Since then, Coach has manufactured,

marketed and sold fine leather products, including handbags, wallets, accessories,

footwear, jewelry and watches. Coach sells its goods through its own specialty

retail stores, department stores, catalogs and via an Internet website

www.coach.com throughout the United States. Coach has used a variety of



28/59


29/59

4

continents. The companys properties operate primarily under the HARRAHS,

CAESARS and HORSESHOE brand names; Harrahs also owns the WORLD

SERIES OF POKER and a majority interest in the London Clubs International

family of casinos. Harrahs Entertainment is focused on building loyalty and value

with its customers through a unique combination of great service, excellent

products, unsurpassed distribution, operational excellence and technology

leadership.

9. S.A.S. Jean Cassegrain is a family-owned corporation based in Paris,France. The companys wholly-owned U.S. based subsidiary, Longchamp U.S.A.,

Inc., markets and distributes luxury goods including handbags, luggage,

accessories and clothing throughout the United States. S.A.S. Jean Cassegrain is

the owner of several United States trademark registrations for the

LONGCHAMP and LE PLIAGE marks, and others. LONGCHAMP

products are sold worldwide through LONGCHAMP specialty boutiques, fine

department stores and via the Internet at www.longchamp.com.

10. The National Football League (the NFL) is an unincorporatedassociation of thirty-two Member Clubs, each of which owns and operates a

professional football team. NFL football is, and for many years has been, the most

popular spectator sports in the United States. The NFL brand of professional

football, and the identifying names, logos, uniform designs and other indicia



30/59

5

associated with the NFL, are enormously popular with both sports fans and the

general public. The NFL owns numerous famous marks, including trademarks

consisting of or incorporating NFL and SUPER BOWL.

11. Oakley, Inc. (Oakley) was founded in 1975 and revolutionized thesunglass market in the 1980s with its sports-oriented eyewear. Oakley

manufactures and sells high quality sunglasses, apparel, watches, bags and

accessories and has enjoyed enormous commercial success over the last three and a

half decades. Domestically, it sells its products to a network of authorized retailers

and also sells direct to consumers through its own branded stores and via its

website. Oakley has many registered trademarks, including its famous ellipsoid

O and the OAKLEY house mark.

12. Founded nearly a century ago in 1916, The Professional GolfersAssociation of America (The PGA of America) is the worlds largest sports

organization, encompassing 28,000 golf professionals. The PGA of America

conducts the PGA CHAMPIONSHIP tournament, one of golfs four Majors,

and also organizes the U.S. RYDER CUP team in its matches against European

golfers.

13. Rolls-Royce North America Inc. is a U.S. affiliate of Rolls-Royce plc,a publicly-traded English company (together, Rolls-Royce). Rolls-Royce is a

world-leading provider of power systems and services for use on land, at sea and in



31/59

6

the air and has established strong positions in four global markets civil

aerospace, defense aerospace, marine and energy. Rolls-Royce owns and uses

many trademarks worldwide and the ROLLS-ROYCE name and mark is one of

the most recognized global brands. Rolls-Royce North America Inc licenses

trademarks from its UK affiliates.

14. Founded in 1893, Sunkist Growers, Inc. (Sunkist) is a non-profitagricultural marketing cooperative that is owned by its grower-members. Sunkist-

branded fresh fruit and over 600 licensed products bearing the Sunkist trademark

are sold around the world. Sunkist owns more than 125 federal trademark

registrations and over 1700 registrations worldwide for a variety of goods and

services.

15. The Sunrider Corporation (Sunrider) is a privately held Utahcorporation. Sunrider was founded in 1982, and is a manufacturer and direct seller

of herbal health, beauty, food, and household products. Sunriders products are

sold in 42 countries. Sunrider owns and uses a wide variety of trademarks

including SUNRIDER, CALLI, and KANDESN.

16. Swarovski North America Limited (Swarovski) is a Rhode Islandcorporation that manufactures, markets and sells fine cut crystal, jewelry and

decorative objects throughout North America under the well-known



32/59

7

SWAROVSKI brand. Swarovski licenses the SWAROVSKI trademark from

its affiliate.

17. Tiffany & Co. is the publicly held parent corporation of Tiffany andCompany (Tiffany). Under license from its affiliate Tiffany (NJ) LLC, Tiffany

uses various well-known trademarks, including, TIFFANY, TIFFANY & CO.,

and T&CO. for the manufacture and sale of fine jewelry, gifts, leather goods and

accessories.

18. TiVo, Inc. (TiVo) is the developer of the worlds first digital videorecorder and today markets its products and related services internationally. The

famous TIVO name is protected by numerous U.S. and foreign trademark

registrations, and TiVo markets its products and provides access to its services at

www.tivo.com. TiVo has received numerous awards for its products and services.

The TIVO box offers one of the worlds largest selections of movies, music and

video for download, including through Netflix, Blockbuster, Amazon, and

YouTube. The TIVO experience should not be confused with a generic DVR.

19. Tumi, Inc. (Tumi) is a privately held corporation. Tumi sells high-end travel and business cases, business products, and small leather goods and

accessories. Tumi is recognized as one of the worlds leading brands of travel,

business and lifestyle accessories, and TUMI products are available in leading

department stores and specialty stores throughout the United States and around the



33/59

8

world. In addition to department and specialty stores, and Tumi retail stores,

Tumis products are available online at Tumis website, www.tumi.com. Tumi is

the owner of nearly fifty federally registered trademarks, including numerous

marks consisting of or incorporating the famous TUMI mark.

20. United Continental Holdings, Inc. is a publicly-traded Delawarecorporation, and is the parent company of both Continental Airlines, Inc. and

United Air Lines, Inc. United Continental Holdings, Inc., through its subsidiaries

Continental and United, is engaged in the business of transporting passengers,

cargo and mail and owns and uses the famous CONTINENTAL AIRLINES and

UNITED AIRLINES trademarks both in the United States and throughout the

rest of the world.

II. INTEREST OF AMICI CURIAE AND AUTHORITY TO FILEAmici are a diverse group of companies that provide consumer goods and

services, including luxury items, food and health products, insurance services, and

entertainment services. Amicis trademarks -- many of which are internationally

famous -- are among their key assets. Amici also include an association of the

worlds leading software and hardware technology companies, an association

representing more than 3,000 small and mid-size information technology firms,

and a Harvard professor who is an expert in the Internet area.



34/59

9

Amici have a direct interest in seeing that the courts properly interpret the

federal trademark dilution law, which is designed to protect famous marks even

against third party uses that are not likely to cause confusion. The district courts

misinterpretation of the federal dilution standard, if endorsed by this Court, could

frustrate Amicis ability to pursue successful dilution claims in this Circuit.

Likewise, Amici have a strong interest in seeing the district courts

misconstruction of the functionality defense reversed. This narrow defense

prevents a plaintiff from establishing trademark rights in functional product

features that are essential to the use of a product or affect its cost or quality, or

otherwise confer a significant competitive advantage. A functionality analysis is

commonly applied to nontraditional features, such as color or design. It is rarely, if

ever, applied to word marks as the district court did here. That court further

misapplied the doctrine by focusing on Googles use of the Rosetta Stone word

marks in its search engine. The court erroneously held that Googles use was

protected by the functionality defense, instead of analyzing whether Rosetta

Stones word marks themselves were functional. Under the courts view, every

corporate defendant could escape liability whenever a defendants business

functions more efficiently by using others trademarks.

This case is important to Amici because of the way in which Google sells

keywords, including Amicis famous marks. The district court described Googles



35/59

10

search engine as aggregat[ing] information and provid[ing] advertising space in

a manner akin to a newspaper or magazine selling advertising space. Rosetta

Stone Ltd. v. Google Inc., No. 1:09 CV 736 (GBLT/TCB), 2010 WL 3063152, at

*7 (E.D. Va. Aug. 3, 2010). This analogy is incorrect. Rather, Google offers an

AdWords program that functions as an auction and Google then selects the

bidder it prefers. Google allows third parties to bid on keyword terms, including

others famous trademarks, to trigger their advertisements as Sponsored Links

when an Internet visitor types a mark into Googles search engine. As a result, a

brand owner may find itself bidding against others, including competitors, so that it

can display advertisements triggered by its own marks.

The AdWords program generates significant revenues for Google based on

the value that purchasers place on keywords, including Amicis marks. For

example, Googles publicly available Traffic Estimator tool, which helps would-

be keyword purchasers estimate the daily costs of advertisements associated with

given keywords,1 estimates that the daily cost of amicus Oakleys OAKLEY as a

keyword to be $920.53.2

1 See Google, Inc., 2009 Annual Report 9, available athttp://investor.google.com/financial/2009/filings-archives.html.

By Googles own estimates, based on one advertisement

alone, it stands to make $6,443.71 per week and $335,072.92 per year from the

2 Google AdWords: Traffic Estimator, https://adwords.google.com/o/Targeting/Explorer?__c=1000000000&__u=1000000000&ideaRequestType=KEYWORD_STATS#search.none (last visited Oct. 28, 2010).



36/59

11

sale of that mark as a key word. The estimated daily cost for amicus National

Football Leagues NFL mark is $1,782.51 according to Googles Traffic

Estimator. Based on that estimate, Google would generate $12,477.57 per week

and $648,833.64 per year from selling NFL as a keyword. Over the last three

years, Googles advertising revenues exceeded$60 billion. See Google, Inc., 2009

Annual Report 41. Indeed, more than95% of the companys total revenue was

generated from advertising. Id. at 37.

The difficulty for Amici is that Google has created a major advertising

market that is conducive to infringing and dilutive ads. Although not all of the

keywords Google sells are trademarks (some are generic terms), the fact that

Google is able to sell well-known marks as keywords for significant amounts

illustrates the value that third parties put on famous marks, including Amicis

marks. Hence, Amici are concerned, among other things, that their marks will be

diluted through Googles program. The district courts conclusion that Google

makes a so-called functional use of otherwise nonfunctional and protectable

marks when it sells these marks as keyword advertising triggers only compounds

the harm. This finding effectively insulates Googles sale of trademarks from any

kind of liability, regardless of the renown of the brand or any resulting confusion

or dilution.



37/59

12

Amici submit this brief, with the consent of all parties, pursuant to

Rule 29(a) of the Federal Rules of Appellate Procedure.

III. ARGUMENTA.The district court misinterpreted the Trademark Dilution Revision Act of

2006 (TDRA) in a way that has broad-reaching implications, not only for

Rosetta Stone, but also for Amici and other owners of famous marks. First, the

district court erred by requiring a trademark owner both to demonstrate actual

harm and to show that the trademark owners brand awareness has decreased (or

did not increase) as a result of the defendants unauthorized use of its mark.

Additionally, contrary to the plain language of the statute, the district court held

that a claim for dilution requires the defendant to use the contested mark on its own

goods or services. 2010 WL 3063152, at *16.

The District Court Imposed Improper Requirements for a DilutionClaim

These requirements are conspicuously absent from the statute. The TDRA

requires only that the plaintiff own a famous mark that is distinctive, and that,

after the mark has become famous, the defendant commences use of a mark or

trade name in commerce that is likely to cause dilution by blurring or dilution by

tarnishment of the famous mark, regardless of the presence or absence of actual or

likely confusion, of competition, or of actual economic injury. 15 U.S.C.



38/59

13

1125(c)(1);Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d

252, 264-65 (4th Cir. 2007).

1. Likelihood of Dilution, Not the Actual Harm StandardEspoused by the District Court, is the Correct Measure

The district court harkened back to the actual harm test for establishing

dilution. The standard for showing dilution under federal law, however, has

changed over time as Congress and the courts have struggled to find the right

balance. Although dilution was initially a creature of state statute, Congress

enacted the first federal anti-dilution law in 1995 to establish a national standard

for trademark dilution. InMoseley v. V Secret Catalogue, Inc., 537 U.S. 418

(2003) (V Secret I), the Supreme Court interpreted that statute as requiring proof

ofactual dilution, not just a likelihood of harm. V Secret Catalogue, Inc. v.

Moseley, 605 F.3d 382, 387 (6th Cir. 2010) (V Secret II). Yet Congress

determined that this standard creates an undue burden for trademark holders who

contest diluting uses and should be revised. Id. (quoting H.R. Rep. No. 109-23,

at 5 (2005), reprinted in 2006 U.S.C.C.A.N. 1091, 1092).

Accordingly, Congress enacted the TDRA in 2006. H.R. 683, 109th Cong.

(2006). Describing the purpose of the TDRA, the House Judiciary Committee

Report stated that the new language in the legislation [provides] . . . specifically

that the standard for proving a dilution claim is likelihood of dilution . . . . V

Secret II, 605 F.3d at 387 (quoting H.R. Rep. No. 109-23, at 9). The likely to



39/59

14

cause dilution language significantly change[d] the meaning of the law from

causes actual harm under the preexisting law. Id. at 388. As a result, mark

owners are no longer required to show actual dilution of their trademarks;

likelihood of dilution is sufficient. Id. at 387.

On its face, the statute applies both to dilution by blurring and dilution by

tarnishment, two claims that Rosetta Stone asserted. As shown below, actual

harm is not required in either case.

a.Blurring occurs when a mark previously associated with one product also

becomes associated with a second. Visa Intl Serv. Assn v. JSL Corp., 610 F.3d

1088, 1090 (9th Cir. 2010).

Dilution by Blurring Does Not Require a Showing ofActual Harm

3

[s]ince Rosetta Stone has not shown that its Marks suffered a loss ofdistinctiveness or reputation, which it claims resulted from Googlespolicy of auctioning the Marks as keyword triggers, it is not entitled to

judgment as a matter of law.

Although the district court correctly refers to the

likelihood of dilution standard, 2010 WL 3063152, at *16, it nonetheless required

Rosetta Stone to show proof of actual harm. It held that:

3 The TDRA directs a court to consider all factors set forth in the dilution statute,15 U.S.C. 1125(c)(2)(B), in assessing a blurring claim -- something theRosettaStone court failed to do. Louis Vuitton , 507 F.3d at 266. Although certain factorsin a blurring analysis may not be relevant to a given case, a trial court must offer asufficient indication of which factors it has found persuasive and explain why theyare persuasive so that the courts decision may be reviewed, id., something the

Rosetta Stone court also did not do.



40/59

15

Id. at *17 (emphasis added). As explained, however, the requirement that the

plaintiff suffer actual dilution was removed in the TDRA and replaced with a

likely to cause dilution standard. V Secret II, 605 F.3d at 387. Because [t]he

word likely or likelihood means probably, a plaintiffneed notshow that its

marks actually suffered a loss of distinctiveness to establish a claim for dilution by

blurring. See id. If the law were otherwise, the dilution standard would be too

stringent.

To take a real-world example, an individual applied with the Patent and

Trademark Office to register RYDER SIPPY CUP for drinking vessels (Serial No.

77/888,108 (now abandoned)). Amicus PGA of America should not have been

hindered in asserting a dilution claim against this applicant if it could not have

shown actual harm, i.e., that the distinctiveness of the RYDER CUP mark had

actually declined as a result of the RYDER SIPPY CUP mark.

The district courts reliance onLouis Vuitton in asserting that, in this Circuit,

no claim for dilution lies where defendants product only increases public

identification of the plaintiffs marks, likewise is misplaced. 2010 WL 3063152,

at *17 (citingLouis Vuitton , 507 F.3d at 264). Louis Vuitton considered whether

the defendants use of CHEWY VUITON and CV marks on dog toys was likely

to impair the distinctiveness of the plaintiffs famous LOUIS VUITTON and LV

marks. 507 F.3d at 265. Critical to theLouis Vuitton courts analysis was the



41/59

16

defendants use of the plaintiffs marks as a parody. 507 F.3d at 267. TheLouis

Vuitton court explained that a successful parody simultaneously mimics the famous

markandcommunicates that it is notthe famous mark, but is only satirizing it. Id.

Accordingly, that court posited that by making a famous mark the object of the

parody, a successful parody mightactually enhance the famous marks

distinctiveness by making it an icon. Id. (emphasis added). The might actually

enhance language that the district court lifted fromLouis Vuitton related solely to

the effect of a parody, id. at 267, 268, and has no place in a blurring analysis that

does not involve a parody.

The district court also found no dilution because Rosetta Stones brand

awareness has only increased over time. 2010 WL 3063152, at *16. This,

however, is not the right test. Heightened brand recognition over time might well

happen for famous marks as a result of mark owners own advertising efforts --

despite dilutive actions by Google or anyone else. Yet dilution, by its very nature,

is the gradual diminution or whittling away of the famous mark, which is

described as death by a thousand cuts -- where significant injury is caused by the

cumulative effect of many small acts of dilution. H.R. Rep. No. 109-23 at 25

(emphasis added) (prepared statement of Rep. Howard Berman). Rosetta Stone

and Amici should not have to wait until dilutive conduct actually decreases brand

awareness before taking action. See, e.g., V Secret I, 537 U.S. at 436 (Kennedy, J.,



42/59

17

concurring) (A holder of a famous mark threatened with diminishment of the

marks capacity to serve its purpose should not be forced to wait until the damage

is done and the distinctiveness of the mark has been eroded.), superseded by

statute on other grounds, TDRA, Pub. L. No. 109-312, 120 Stat. 1730.

b.The district courts analysis of dilution by tarnishment suffers a similar fate.

Tarnishment is the association arising from the similarity between a mark or trade

name and a famous mark that harms the reputation of the famous mark. 15

U.S.C. 1125(c)(2)(C). It may occur when the famous mark is linked to products

of shoddy quality, or is portrayed in an unwholesome or unsavory context, with the

result that the public will associate the lack of quality or lack of prestige with the

famous mark. Starbucks Corp. v. Wolfes Borough Coffee, Inc., 588 F.3d 97, 110

(2d Cir. 2009) (internal quotation marks omitted).

Dilution by Tarnishment Likewise Does Not Require aShowing of Actual Harm

In analyzing tarnishment, the district court again imposed the requirement

that the plaintiff suffer actual harm to its reputation as an element of the TDRA. It

reasoned that because Rosetta Stone had not shown that its reputation had been

harmed, it could not state a claim for dilution by tarnishment. 2010 WL 3063152,

at *17. This is not the law, and would be a dangerous precedent for Amici who

could not show actual customer complaints that they had received as a result of

inferior products or services.



43/59

18

2.The district court held that Google could not be liable for dilution simply

because Google, unlike Rosetta Stone, does not sell language teaching programs.

2010 WL 3063152, at *16. Effectively, the court found no dilution because the

parties are not competitors. Contrary to this holding, the dilution statute

specifically provides that a trademark owner may obtain injunctive relief

regardless of the presence or absence of . . . competition. 15 U.S.C. 1125(c)(1)

(emphasis added); see also Kellogg Co. v. Exxon Corp., 209 F.3d 562, 576 (6th

Cir. 2000) (district court erred in dismissing plaintiffs claim for dilution of cartoon

tiger mark because parties products were dissimilar; FTDA allows for relief on

dilution grounds regardless of whether or not parties are competitors).

Dilution May Lie Even if the Parties Are Not Competitors

Indeed, the federal dilution statute is not designed to address directly

competitive goods (a traditional infringement action does that), but to prohibit the

use of famous marks on differentgoods or services in a manner that is likely to

cause dilution. Classic examples cited in the original statutes legislative history

include the use of DUPONT shoes, BUICK aspirin, and KODAK pianos. H.R.

Rep. No. 104-374, at 3 (1995), reprinted in 1996 U.S.C.C.A.N. 1029, 1030.4

4 Moreover, through its AdWords program, Google literally is creatingassociations between famous trademarks and third party products, therebyassociating the products of third parties, via Sponsored Links, with the famousmarks. Thus, there may be many products, not just one, competing for



44/59


45/59

20

Googles AdWord program does. It sells not only generic words but also others

famous trademarks as keywords to attract advertisers. While Google may not be

using these marks to identify its own goods or services, it is using them in

commerce to capitalize on their fame and boost its own revenues.

B.The district court also erred in concluding that the functionality doctrine

protects Googles use of the Rosetta Stone Marks as keyword triggers. 2010 WL

3063152, at *11. The functionality doctrine prevents a plaintiff from establishing

trademark rights in product features that are essential to the use of a product, affect

its cost or quality, or otherwise confer a significant non-reputation-related

competitive advantage. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23,

33 (2001) (emphasis added). Thus, courts have cited this doctrine in denying trade

dress protection for a dual-spring mechanism that made road signs more wind

resistant, id. at 30, as well as for the color black that reduced the perceived size of

an outboard boat engine,Brunswick Corp. v. British Seagull Ltd., 35 F.3d 1527,

1532 (Fed. Cir. 1994).

The District Court Has Misapplied the Functionality Defense

Under the functionality doctrine, the Rosetta Stone word marks are not

functional product features. They are neither essential to the use of the plaintiffs

software learning system, nor do they affect its cost or quality or otherwise give

Rosetta Stone a non-reputation-related competitive advantage. The same is true of



46/59

21

Amicis word marks. Because the Rosetta Stone word marks are solely a

designation of source for Rosetta Stones software, this should have been the

beginning and end of the district courts functionality inquiry.

The district court, however, did not analyze whether Rosetta Stones marks

are functional. Instead, the court found that these word marks, when used as

keywords in Googles AdWords advertising program, made this program more

functional. This finding necessarily barred Rosetta Stone from recovering on its

infringement and dilution claims against Google.

The functionality doctrine, however, is not based on this type of balancing.

It does not look at whether a plaintiffs nonfunctional mark makes a defendants

product or service more useful. Indeed, in any given case, virtually every

defendants use of anothers mark with that defendants product would have a

function or purpose.

Moreover, a functionality analysis properly relates to nontraditional product

features, such as design or color, rather than to word marks. It should have no

relevance in a case involving the Rosetta Stone word marks or Amicis word

marks.

The district courts creation of a new functionality doctrine has negative

ramifications for Amici, all of whom rely on word trademarks to designate the

source of their products and services. Amici do not dispute that Internet users



47/59

22

should be free to type a word or phrase into Googles search engine to obtain

information. It may be beneficial to have advertisements triggered by a trademark

owners marks, such as advertisements for the brand owner itself, its licensees,

authorized retailers, and franchisees. By contrast, if the advertising content is

infringing, dilutive, or promotes counterfeit goods, it benefits only the infringer.

The district courts application of the functionality doctrine assumes that

permissible advertising cannot continue without also tolerating infringing content.

Googles AdWords program, however, is already very sophisticated. For example,

it allows trademark owners to identify and pre-approve advertisements by third

parties (e.g., licensees, retailers).5

1.

Given the sophistication of Googles AdWords

program, the legal issues raised by Rosetta Stone or Amici should not present true

obstacles. The sale of keywords to trigger advertising should thus not be shielded

by the functionality doctrine, particularly when that doctrine has no place in this

case.

The District Courts Ruling is Contrary to the PrinciplesUnderlying the Functionality Doctrine

The district courts conception of functionality is fundamentally at odds

with the two established types of functionality: utilitarian functionality and

aesthetic functionality. See TrafFix, 532 U.S. at 33. Utilitarian functionality

5 See Google AdWords Third Party Authorization Request,https://services.google.com/inquiry/aw_tmauth (last visited Oct. 29, 2010).



48/59

23

provides that a product feature is functional if it is essential to the use or purpose

of the article or if it affects the cost or quality of the article. Id. at 32 (emphasis

added) (internal quotation marks omitted); see also Jay Franco & Sons, Inc. v.

Franek, 615 F.3d 855, 857 (7th Cir. 2010) (So if a design enables a product to

operate, or improves on a substitute design in some way (such as by making the

product cheaper, faster, lighter, or stronger), then the design cannot be trademarked

. . . .).

Aesthetically functional product features -- namely, features

act et al amicus brief in rosetta stone v google

Documents