Rosetta Stone LTD v. Google, Inc.

Google (defendant) sold sponsored-link advertising keyed to purchased search terms, and reversed an earlier policy to let advertisers buy competitors' trademarks as keywords -- and later, even use those trademarks in the ad text itself -- despite Google's own internal studies finding that using trademarks in ad text confused consumers. Rosetta Stone (plaintiff), a language-software seller, complained about roughly 190 instances of sponsored links selling counterfeit Rosetta Stone products using its trademarks, but Google let those advertisers continue. Rosetta Stone sued for direct infringement, contributory infringement, and dilution, presenting an expert report finding 17 percent of surveyed consumers were actually confused; the district court granted summary judgment to Google on all claims, and Rosetta Stone appealed.