APPEAL NO. 10-2007 IN THE United States Court of Appeals FOR THE FOURTH CIRCUIT ROSETTA STONE LTD., Plaintiff-Appellant, v. GOOGLE INC., Defendant-Appellee. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA. ALEXANDRIA DIVISION BRIEF OF AMICUS CURIAE VOLUNTEERS OF AMERICA, INC. IN SUPPORT OF APPELLANT ROSETTA STONE LTD. Thomas G. Southard, Esq. Karl Wm. Means, Esq. Alan B. Sternstein, Esq. Shulman, Rogers, Gandal, Pordy & Ecker, P.A. 12505 Park Potomac Avenue Potomac, Maryland 20854 Tele: (301) 230-5200 Attorneys for Amicus Curiae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 than one 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 curiae are required to file disclosure statements, Counsel has a continuing duty to update this information. No, 10-2007 Caption: Rosetta Stone Ltd. v. Google Ino. Pursuant to FRAP 26.1 and Local Rule 26.1, Volunteers of America, Inc. _ who is Amicus makes the following disclosure: (aame of party/amicus) (eppellant/appellec/amicus) 1, __Isparty/amicus a publicly held corporation or other publicly held entity? ["] YES 2. Does party/amicus have any parent corporations? Gives If yes, identify all parent corporations, including grandparent and great-grandparent corporations: Is 10% or more of the stock of a party/amicus owned by a publicly held corporation or other publicly held entity? YES[ZJNO If yes, identify ll such owners: 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[Z]NO tyes, identify entity and nature of interest: 5. Isparty 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 affected substantially 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? OyesZno If yes, identify any trustee and the members of any creditors’ committee: CERTIFICATE OF SERVICE T certify that on November 1,2010_ 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: Thomas G, Southard /s! 1191/2010 (Gignature) (GaeyTABLE OF AUTHORITIES.. STATEMENT OF IDENTITY AND INTEREST OF AMICUS... PRELIMINARY STATEMENT... L TABLE OF CONTENTS THE TRADITIONAL TRADEMARK INFRINGEMENT STANDARD AND THE ‘LIKELIHOOD OF CONFUSION FACTOR: A. Direct Trademark Infringement. B. Likelihood of Confusion. ‘Tue DIsTRICT COURT ERRED BY NOT WEIGHING INITIAL INTEREST CONFUSION TOGETHER WITH THE TRADITIONAL LIKELIHOOD OF (CONFUSION FACTORS. A. Initial Interest Confusion is Especially Relevant in Internet Infringement Cases. . B. _ Initial Interest Confusion’s Effect on Likelihood of Confusio1 LAMPARELLO DOES NOT PRECLUDE APPLICATION OF THE INITIAL INTEREST CONFUSION DOCTRINE TO THE FACTS PRESENTED BY ROSETTA STONE. wove 1B. A. The Lamparello Decision... 19 1. Lamparello Involved Website Content, Not Search Results 19 Triggered by the Use of Searchable Keywords. 2. The Lamparello Court Conducted a Traditional Likelihood of Confusion Analysis. 20 B, The Lamparello Decision Does Not Conflict With the Initial Interest Confusion Doctrine 21C. Actionable Use of Third-Party Trademarks as Search Engine Keywords Does Not Require User Diversios CONCLUSION ....TABLE OF AUTHORITIES CASES 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F. Supp. 2d 273, (D.N.J. 2006) Anheuser-Busch, Inc. v. L & L Wings, Inc., 962 F.2d 316 (4° Cir. 1992).. Australian Gold, Inc. v. Hatfield, 436 F.3d 1228 (10" Cir. 2006). Brookfield Communications Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9" Cir, 1999). Checkpoint Systems, Inc. v. Check Point Software Tech's, Inc., 269 F.3d 270 (3d Cir. 2001).. Dr. Seuss Enters. V. Penguin Books USA, Inc., 109 F.3d 1394 (9" Cir. 1997)... Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188 (Sth Cir. 1998) George && Co. v. Imagination Entertainment Lid., 575 F.3d 383, 393 (4" Cir. 2009) JG. Wentworth S.S.C. LP v. Settlement Funding, LLC, No. 06-0597, 2007 U.S. Dist Lexis 288 (E.D. Pa. Jan. 4, 2007) Louis Vuitton Malletier S.A. v. Hauta Diggity Dog, LLC, 464 F. Supp. 2d 495 (E.D. Va. 2006 Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254 (2d Cir. 1987). North American Medical Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211 (11" Cir. 2008).. itiPeople for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4" Cir. 2001). Pizzeria Uno Corp. v. Temple, 747 F.2d 1522 (4 Cir. 1984)... Playboy Enterprises Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9" Cir. 2004)... vee LL, 13, 14, 16 Promatek Industries Ltd, v. Equitrac Corp., 300 F.3d 808 (7" Cir. 2002)... Rescuecom Corp. v. Google, Inc., 562 F.3d 123 (2 Cir. 2009) Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455 (4" Cir, 1996)... Venture Tape Corp. v. MeGills Glass Warehouse, 540 F.3d 56 (1* Cir. 2008)... STATUTES 15 U.S.C. §1114.. TREATISES 4 McCarthy on Trademark and Unfair Competition § 23.110. A. LaLonde, Gilson on Trademarks § 5.14 (2008)...STATEMENT OF IDENTITY AND INTEREST OF AMICUS Amicus Curiae Volunteers of America, Inc. (“VoA”) is a highly accredited national non-profit organization that helps more than 2 million people in over 400 communities in forty-four states. Pursuant to its mission, VoA provides housing, healthcare and assistance to at-risk youth, the frail elderly, men and women returning from prison, homeless individuals and families, people with disabilities, and those recovering from addictions. Through its thirty-eight state and regional affiliates VoA owns and operates homeless shelters, thrift stores, car donation programs, educational programs and substance abuse programs, in addition to undertaking numerous other charitable endeavors. Currently headquartered in Alexandria, Virginia, VoA has been offering humanitarian aid services since 1896. Like many non-profits, VoA owns federally registered trademarks and relies heavily on the Internet to promote and advertise its services. And also like many non-profits, VoA considers trademark abuse through sponsored search engine advertisements to be one of its most formidable business problems. Indeed, the opportunity for abuse of trademarks is nowhere greater than on the Internet. Thus, for VoA, the outcome of this case is of special interest and concer. VoA believes the District Court’s decision places serious and unjustified limits on the reach of the Lanham Act and has a strong interest in seeing that the court’s errors are corrected. In particular, and among other things, the DistrictCourt failed to consider, much less apply, the initial interest confusion theory of trademark infringement to the facts at hand, a theory that has been accepted and applied numerous times over by federal courts, including the Second and Ninth Circuits. VoA believes that notwithstanding the Fourth Circuit’s decision in Lamparello v, Falwell, 460 F.3d 309 (4" Cir, 2005), initial interest confusion can and should be applied in the context of this case to hold Google liable for direct or contributory trademark infringement. VoA’s views regarding the scope and application of the initial interest confusion doctrine may aid the Court in understanding the important trademark rights at stake in this case and the extent to which the District Court’s misguided application of the traditional trademark infringement factors may affect these rights. Accordingly, VoA submits this Amicus Brief in order to assist the Court in the resolution of the issues presented to the District Court below, and to urge for reversal. A Motion for Leave to File has been filed concurrently with this Brief in compliance with Fed. R. App. P. 29(b).PRELIMINARY STATEMENT "Under the Lanham Act, a registered trademark holder has a right to prevent another's use of a trademark that is ‘likely to cause confusion, or to cause mistake, or to deceive." Anheuser-Busch, Inc. v. L & L Wings, Inc., 962 F.2d 316, 318 (4" Cir. 1992) (quoting 15 U.S.C. § 1114(1)(@)). "[A]n unauthorized use of a trademark infringes the trademark holder's rights if it is likely to confuse ‘an ordinary consumer’ as to the source or sponsorship of the goods." /d. (citation omitted), In the proceedings below, the District Court held that no reasonable trier of fact could find that Google's practice of auctioning Rosetta Stone's trademarks as keyword triggers to third party advertisers creates a likelihood of confusion as to the source or origin of Rosetta Stone's products. The District Court based its finding on three factors alone: (i) Google’s intent in selling trademarked keywords; (ji) the existence of actual confusion, or lack thereof; and (iii) sophistication of consumers who purchase Rosetta Stone’s products. The court did not address the possibility that Google’s sale of Rosetta Stone’s trademarks as keywords could result in initial interest confusion, which is actionable under the Lanham Act, and which would have provided relevant additional context in which to assess Google’s liability for either direct or contributory infringement in this action. Google offers an “AdWords” program that functions as an online auction. Google allows ~ indeed suggests — its advertising customers to bid on “keyword” 3terms, including third parties’ trademarks, to trigger their advertisements as “Sponsored Links” when an Internet visitor types a mark into Google’s search engine. For example, if an organization named “Cars for Veterans” became an AdWords customer, it would have the opportunity — and indeed Google’s suggestion tool may recommend it ~ to purchase VoA’s registered trademark “Volunteers of America.” As a result of this purchase, an advertisement for Cars for Veterans will prominently appear as a sponsored link when an Internet user searches for VoA as shown here: Google J Eversthing AP copate.TéGood : em a acuta oe See SS remeron meer we ies ‘Duma CarPieup ing we ‘ “Rann oR Ay Conn. Se Timon Rai ean fSueesemmee Stier onavonas™ detente omer Dini corpone 20, Pemecatonanat - Seapets are Sear ace yee lena Sones " a ‘pousg Fer Vourtening? en sit teen SB Lette Ce et dase tant erence roel ae eter oxAnen ene icles an ceteris mot cance i 186 ements | Seat faeces ie ee a ‘An important real-world consequence of Google’s unauthorized sale and use of trademarks is that non-profits like VoA must spend valuable resources bidding on their own trademarks on the Google website. In effect, Google is holding the trademark owner hostage and demanding ransom from the trademark 4owner. The trademark owner has to “buy back” its own trademark to avoid consumer confusion from third parties who purchase their trademarks as keywords a complete inversion of the way trademark law is supposed to operate. In this case, Google’s practices can and should be analyzed through the lens of initial interest confusion. Initial interest confusion looks at whether a defendant's use of a plaintiff's mark was carried out in a manner calculated to capture initial consumer attention even if no actual sale is finally completed as a result of the confusion, and even though the consumer ultimately overcomes his or her initial confusion. Thus, actual confusion is not a prerequisite for infringement, The presence of initial interest confusion may additionally render other likelihood of confusion factors more or less significant. Bypassing the initial interest confusion inquiry in an Intemet trademark infringement case is a serious mistake. Here, the District Court’s decision to ignore initial interest confusion in evaluating Google’s liability runs contrary to established case law and the Lanham Act’s policy of protecting trademark owners. If allowed to stand, the decision below will create significant obstacles to the use of the Lanham Act to pursue claims for online trademark abuse stemming from search engine advertising programs. VoA urges the Court to use this opportunity to reverse the District Court’s decision and endorse the inclusion of initial interest confusion as an essential consideration in trademark infringement cases.L ‘THE TRADITIONAL TRADEMARK INFRINGEMENT STANDARD AND THE ‘LIKELIHOOD OF CONFUSION FACTORS. Before delving into why “initial interest confusion” should be recognized and adopted in this Circuit, VoA provides the following brief overview of the trademark inftingement standard and the typical factors considered in a likelihood of confusion analysis. A. Direct Trademark Infringement. To prevail on a claim of direct trademark infringement, a plaintiff must prove that: (1) it possesses a mark; (2) the defendant used the mark; (3) the defendant's use of the mark occurred “in commerce”; (4) the defendant used the mark “in connection with the sale, offering for sale, distribution, or advertising” of goods or services; and (5) the defendant used the mark in a manner likely to confuse consumers. See 15 U.S.C. §1114; People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 364 (4" Cir. 2001), Because neither Rosetta Stone nor Google disputed the first four trademark infringement elements, the District Court’s inquiry focused on whether Google’s use of the Rosetta Stone trademarks “is likely to create confusion among consumers as to the source or origin of Rosetta stone’s goods or services.” August 3, 2010 Memorandum Opinion (“Opinion”) at 17.B. Likelihood of Confusion. The touchstone of liability for trademark infringement is whether another’s use of a trademark is “likely to cause confusion, or to cause mistake, or to deceive.” Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 459 (4" Cir. 1996) (emphasis added). Since the test is likelihood of confusion, “evidence of actual confusion is unnecessary.” Jd, (citing Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1527 (4% Cir. 1984)). To determine if, in fact, there is a likelihood of confusion, this Court’s George & Co. v. Imagination Entm’t Ltd. decision recites nine factors to be weighed: 1. The strength or distinctiveness of the mark as actually used in the marketplace; The similarity of the two marks to consumers; The similarity of the goods/services that the marks identify; The similarity of the facilities used by the markholders; The similarity of the advertising used by the markholders; The defendant’s intent; Actual confusion; The quality of the defendant’s product; and The sophistication of the consuming public. PRPAAMAYYN George & Co., 575 F.3d 383, 393 (4 Cir. 2009), This list is not exclusive, nor is each factor of equal importance or relevance. Rather, it is “only a guide ~ a catalog of various considerations that may be relevant in determining the ultimate statutory question of likelihood of confusion.” Anheuser-Busch, 962 F.2d at 320 (likelihood of confusion factors are not meant to be a rigid formula for infringement).Il. Tae District CouRT ERRED By Nor WEIGHING INITIAL INTEREST CONFUSION TOGETHER WITH THE TRADITIONAL LIKELIHOOD OF ‘CONFUSION FACTORS. Initial interest confusion is part of the infringement determination. For example, in Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 257-58 (2 Cir, 1987), the Second Circuit recognized the initial interest confusion doctrine and applied it in its multi-factor test for likelihood of confusion. The plaintiff, Mobil Oil, was a large corporation that manufactured and sold oil to both industrial consumers and to the public. Id, at 255-256. For over fifty years, Mobil had used the mark of a “flying horse,” which represented “Pegasus, the winged horse of Greek Mythology.” Id, Mobil was also in the business of buying and selling crude and refined oil in bulk, although it did not use its flying horse mark in its oil trading business. Jd The defendant, Pegasus Petroleum, was incorporated in 1981, and participated solely in the business of oil trading. Id. Although the defendant had neither used a mark similar to Mobil’s flying horse symbol, nor sold any products labeled with the word “Pegasus,” the court found trademark infringement under the Lanham Act. Id. at 259. The court applied the initial interest confusion doctrine under the “actual confusion” factor of its Polaroid test for likelihood of confusion. The court explained: [the district court] found a likelihood of confusion not in the fact that a third party would do business with Pegasus Petroleum believing it related to Mobil, but rather in the likelihood that Pegasus Petroleum would gain crucial 8credibility during the initial phases of a deal. For example, an oil trader might listen to a cold phone call from Pegasus Petroleum . . .when otherwise he might not, because of the possibility that Pegasus Petroleum is related to Mobil. Id. While the court did find that this instance of initial confusion constituted “actual confusion” in favor of Mobil, ultimately, initial interest confusion was one of many factors that the court considered. The Fifth Circuit similarly has applied initial interest confusion under the actual confusion factor of its likelihood of confusion analysis. Elvis Presley Enters. Inc. v. Capece, 141 F.3d 188, 203-04 (Sth Cir. 1998). A. Initial Interest Confusion is Especially Relevant in Internet Infringement Cases. In one of the seminal decisions involving trademark infringement on a website, the Ninth Circuit explained interest confusion as the “use of another’s trademark in a manner calculated to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion.” Brookfield Communications Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1062 (9 Cir, 1999). Inherent in this concept is the risk that a user, when searching on the Internet, will be satisfied with a second site or sufficiently distracted that he will not arrive at or return to the site for which he was originally searching. Although the “diversion of consumers’ initial interest” had previously been recognized as “aform of confusion against which the Lanham Act protects,” Brookfield was one of the first courts to apply initial interest confusion in the context of Intemet trademark infringement. See Dr. Seuss Enterprises. v. Penguin Books USA, Inc., 109 F.3d 1394, 1405 (9" Cir. 1997).' In Brookfield, plaintiff held a federal registration for the “MovicBuff” trademark and alleged that the defendant West Coast used “moviebuff.com” as a “keyword” metatag to identify West Coast’s web site to Internet search engines” As a result, users were presented with a list of search results that included both West Coast and Brookfield’s web sites. The Brookfield court recognized that “web surfers are more likely to be confused as to the ownership of a web site than traditional patrons of a brick-and-mortar store would be of a store’s ownership” because, for example, the user may incorrectly believe that Brookfield licensed “MovieBuff” to West Coast, that Brookfield sponsored West Coast's web site, or that West Coast bought out Brookfield. Brookfield, 174 F.3d at 1058, Notwithstanding that confusion was less likely when ' ‘The Brookfield opinion also includes numerous citations to prior decisions recognizing that federal trademark and unfair competition laws do protect against initial interest confusion, including the trial court decision in Sara Lee, ultimately affirmed by this court. See Brookfield, 174 F.3d at 1063-64. 2A “metatag” is part of the computer code known as HTML (Hypertext Markup Language), used to create web sites. Search engines look for and process metatags (among other things) to build an index of web sites, which is used in turn to generate search results for users. 10users went to the West Coast web site and examined the content, the court held that initial interest confusion would still result: Web surfers looking for Brookfield’s “MovieBufi” products who are taken by a search engine to “westcostvideo.com” will find a database similar enough to “MovieBuff” products such that a sizeable number of consumers who were originally looking for Brookfield’s product will simply decide to utilize West Coast’s offerings instead. Although there is not source confusion in the sense that consumers know they are patronizing ‘West Coast rather than Brookfield, there is nevertheless initial interest confusion in the sense that, by using “moviebuff.com” or “MovieBuff” to divert people looking for “MovieBuff” to its web site, West Coast improperly benefits from the good will that Brookfield developed in its mark. Brookfield, 174 F.3d at 1062. The Ninth Circuit fully embraces initial interest confusion as a factor contributing to trademark infringement. See, e.g, Playboy Enters Inc, v. Netscape Communications Corp, 354 F.3d 1020, 1024-25 (9" Cir. 2004) (summary judgment reversed because Playboy had viable argument that search engine created initial interest confusion where banner ads were triggered by users searching for Playboy’s trademarks). A number of other courts do so as well. See Venture Tape Corp. v. MeGills Glass Warehouse, 540 F.3d 56, 60-62 (1* Cir. 2008) (affirming summary judgment of infringement and damages awarded for defendant’s use of plaintiff's trademarks as metatags to attract customers searching for plaintift); Checkpoint Sys. Inc. v. Check Point Software Technologies Inc., 269 F.3d 270, 292 113" Cir. 2001) (initial interest confusion “actionable under the Lanham Act” to protect a company’s goodwill with its customers); Promatek Indus. Ltd. v. Equitrac Corp., 300 F.3d 808, 812-13 (7" Cir. 2002) (“That consumers who are misled to Equitrac’s website are only briefly confused is of little or no consequence. In fact, that confusion as to source of a product or service is eventually dispelled does not eliminate the trademark infringement which has already occurred, What is important is not the duration of the confusion, it is the misappropriation of Promatek’s goodwill.”); Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238-39 (10 Cir. 2006) (affirming lower court’s five-million dollar award because use of metatags on defendant’s web site caused initial interest confusion); N. Amer. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1221- 24 (11" Cir, 2008) (affirming finding of infringement where defendant’s use of plaintiff-competitor’s trademarks as metatags resulted in Google search result with description of defendant’s web site); 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F. Supp. 2d 273, 290-93 (D.N.J. 2006) (holding initial interest confusion a significant factor in determining likelihood of confusion). B. _ Initial Interest Confusion’s Effect on Likelihood of Confusion Clearly there are a variety of circumstances in which initial interest confusion on the Intemet may damage a mark owner. And while much of the established precedent has involved the unauthorized use of trademarks as web site ametatags, nothing about initial interest confusion inherently limits its application to those situations. In fact, the Playboy case cited above demonstrates its application when a trademark serves as a keyword trigger. Google’s sponsorship of keyword triggered advertisements through its AdWords activities is just as amenable to sorutiny under the initial interest confusion theory as the acts of the defendants in these other Internet cases. ‘The damage resulting from initial interest confusion caused by Google’s AdWords program manifests itself in several ways, First, a trademark owner’s prospective customers may be diverted to websites that they believe - incorrectly - are associated with the trademark owner whose keywords were used to sponsor the ad, Second, the trademark owner's prospective customer may decide to buy the product that is not associated with the trademark owner, whether or not it believes at the time of purchase that the product is associated with the trademark owner. Third, the customer may rely on the trademark owner's reputation in purchasing the infringing product, a reputation that has been time-consuming and expensive for the trademark owner to create. See A. LaLonde, Gilson on Trademarks § 5.14 (2008).? 3 An association with the trademark owner could include direct or indirect association or affiliation, sponsorship or endorsement of the ad or the web site, or even use of the trademark under license from the owner. aIn its Opposition to Rosetta Stone’s Motion for Partial Summary Judgment (“Opposition”), Google claims that initial interest confusion is not an actionable theory of inftingement against Google because Google “does not compete with the markholder for sales.” Opposition at 12. However, “branding” one’s own goods is not a required element of a trademark infringement or dilution claim. Playboy, 354 F.3d at 1024, The “use in commerce” requirement for purposes of bringing a claim under the Lanham Act “sweeps as broadly as possible,” and through its sale of keywords containing Rosetta Stone’s trademarks, Google has clearly used those marks in commerce. Jd. at 1024 n, 11; see also Rescuecom Corp. v. Google, Inc., 562 F.3d 123 (2° Cir, 2009). (Google’s use of third party trademarks for keyword triggers is a use in commerce). * While VoA would be hard pressed to argue that initial interest confusion can stand alone as a basis for infringement liability, it is clearly a probative factor in a likelihood of confusion analysis. See e.g., Checkpoint Sys. Ine. v. Check Point Software Tech's, Inc., 269 F.3d 270, 294 (3d Cir. 2001). And depending on the individual factual circumstances of a case, the evidence of initial interest confusion. * Tf one were to accept Google’s logic, in no case will confusion ever exist between AdWords and the goods or services being sought by a search engine user, unless the search engine user is looking for an advertising service. Google’s position is completely untenable. 14is entitled to more or less weight. VoA submits that the evidence of initial interest confusion in Rosetta Stone’s case should be entitled to great weight. For example, when initial interest confusion is involved, the Third Circuit has stressed that the relatedness of the products at issue and the level of care exercised by consumers are of particular concem because a similar defendant product purchased without a high level of care is more likely to benefit from initial confusion. Checkpoint, 269 F.3d at 296-97. In Rosetta Stone’s case, the products at issue are very similar, and in some cases identical. As to consumer level of sophistication, VoA submits that the relevant consumer for language software is anyone conducting an Intemet search on Google for language software, arguably the public at large. ‘The District Court narrowed the relevant inquiry based on the nature and price of Rosetta Stone’s software without so much as citing any of Rosetta Stone’s evidence. Indeed, there was no weighing of evidence that occurred. Contrary to the District Court’s conclusions, Rosetta Stone’s evidence showed that even well educated consumer’s were confused by Google’s sponsored links, In any event, it is clear from the District Court did not balance the consumer sophistication or product relatedness factors against Rosetta Stone's initial interest confusion evidence. That failure alone compels reversal. This Court should remand for further factual development and require the District Court properly to 15weigh the initial interest confusion resulting from Google's sale of Rosetta Stone’s trademarks. Initial interest confusion also impacts the actual confusion factor. See Mobil Oil Corp., 818 F.2d at 260. The District Court below went to great lengths to discredit and refute Rosetta Stone’s evidence of actual confusion and to distinguish Rosetta Stone’s cases on this issue. Among other things, the court stressed that “Rosetta Stone and Google are not direct competitors in the language-learning software market.” Opinion at 23, However, the fact that Google and Rosetta Stone do not compete is irrelevant. Playboy, 354 F.3d at 1024. The District Court also improperly credited Google’s rebuttal evidence showing that of the five witnesses who allegedly purchased counterfeit Rosetta Stone products after conducting a search on Google, all of these witnesses knew “that they were not purchasing the products directly from Rosetta Stone[,] and further that none of the witnesses were confused about the source of their purchase.” Opinion at 25. The District Court’s statements go the heart of why courts must weigh initial interest confusion. The evidence of initial interest confusion in this case should also weigh on the intent factor. In considering Google’s intent, the District Court concluded that Google was not passing off its goods or services as those of Rosetta Stone’s and that “evidence of [Google’s] financial gain alone is insufficient evidence of intent.” 16Opinion at 18. While “intent to profit” may not be synonymous with intent to confuse, Google unquestionably had actual and constructive knowledge of Rosetta Stone’s adoption and use of the Rosetta Stone trademarks, not only through their use and registration on the Principal Register at the U.S. Trademark Office, but also through Rosetta Stone’s almost daily notification to Google over a seven month period of counterfeiters bidding on Rosetta Stone’s trademarks. For Google to take no action in response to Rosetta Stone’s notification while it continued to allow third parties to purchase Rosetta Stone’s trademarks with the intent of maximizing Google’s own profit is the epitome of intent to confuse. When considered in light of the initial interest confusion caused by Google’s sale of Rosetta Stone’s trademarks as keywords, Google’s actions should give rise to a presumption of likely confusion. See Osem Food Indus., Ltd. v. Sherwood Foods, Ine., 917 F.2d 161 (4" Cir. 1990); see also 4 McCarthy on Trademark and Unfair Competition § 23.110 (“[A] defendant who purposely chooses a particular mark because it is similar to a senior user is saying, in effect, that he thinks that there is at least a possibility that he can divert some business from the senior user — and the defendant ought to know at least as much about the likelihood of confusion as the trier of fact) (citing Little Caesar Enterprises. Inc. v, Pizza Caesar, Inc., 834 F.2d 568 (6" Cir. 1987).Initial interest confusion targets one specific type of pre-sale confusion: it involves confusion at the very earliest stage ~ not with respect to the source of specific goods or services under consideration, but during the process of searching and canvassing for a particular product. Thus, by recognizing this type of confusion, courts are required to assess the consumer's state of mind pre-sale, This did not happen in the District Court below. ‘The District Court’s factual findings on the issue of actual confusion must be reevaluated taking into consideration the initial interest confusion of the consumers who keyed Rosetta Stone’s name into Google’s search engine. Ill. LAMPARELLO DOES NOT PRECLUDE APPLICATION OF THE INITIAL INTEREST CONFUSION DOCTRINE TO THE FACTS PRESENTED BY ROSETTA STONE. Adoption of the initial interest confusion doctrine in the Fourth Circuit and its application to cases such as Rosetta Stone’s would not only curtail a significant amount of online trademark infringement and misappropriation through illegitimate uses such as Google’s, but also align this Circuit with the other Circuit Courts of Appeal that have had occasion to deal with this issue. VoA submits that the evidence supports a finding of actionable initial interest confusion in Rosetta Stone’s case, which may ultimately lead to a finding of infringement liability. In its Opposition to Rosetta Stone’s Motion for Partial summary Judgment, Google asserts that the Fourth Circuit has rejected the initial interest confusion 18doctrine. Google reads the prior decisions of this court too broadly, Although the Fourth Cireuit has never expressly adopted the initial interest confusion theory, it has never rejected it either. Fourth Circuit precedent does not bar the adoption and use of initial interest confusion but is actually consistent with the Fourth Circuit’s “different mode of analysis” in prior trademark cases. A. The Lamparello Decision. In Lamparello y. Falwell, this court reversed a decision enjoining the plaintiff, Lamparello, from maintaining a “gripe site” critical of the Reverend Jerry Falwell. 420 F.3d 309 (4 Cir. 2005). Among the causes of action asserted by Falwell were claims of trademark infringement, false designation of origin, unfair competition and cybersquatting. Jd, at 312. A fair reading of this court's opinion reveals that the decision to reverse relied on a number of determinations based on the specific facts of the case, all distinguishable from the facts present here. 1, Lamparello Involved Website Content, Not Search Results Triggered by the Use of Searchable Keywords. Falwell’s claims in Lamparello involved the use of a domain name and the publication of web site content by Lamparello, In reversing the trial court and directing judgment for Lamparello, this Court concluded that the website looked nothing like Falwell’s website, did not offer similar goods or services, and was intended only to provide a forum to criticize ideas, such that users visiting Lamparello’s website “quickly realized that Reverend Falwell was not the source 19of the content therein . . . and were unlikely to confuse Reverend Falwell with the source of that material.” Lamparello, 420 F.3d at 315. Therefore, there was no likelihood of confusion. Id. The Lamparello situation differs significantly from the instant case. The full content of Lamparello’s website was readily available to the relevant user or “customer” and therefore key to a likelihood of confusion determination under the Pizzeria Uno factors. In contrast, the instant case is directed to simple, text search results consisting of limited length, text-only descriptions, and the consumer confusion created by Google’s sale of trademarks as keywords to generate those results. Websites are intended and designed to present a unique and informative visual display of content. Google search results are not. 2, The Lamparello Court Conducted a Traditional Likelihood of Confusion Analysis. The Lamparello court analyzed the Pizzaria Uno likelihood of confusion factors, The court found that (a) Falwell’s mark was distinctive, (b) the marks were similar but not the same, (c) their respective services were different, (d) there was no similarity in their respective facilities, (e) there was no similarity in their advertising, (f) the defendant’s intent was to criticize, not steal Falwell’s customers, and (g) Falwell failed to show any actual confusion, Lamparello, 420 F.3d at 315. Because the full content of Lamparello’s web site provided the entire context for determining likelihood of confusion, these findings are all that the 20Fourth Circuit needed to support the reversal of the trial court with respect to Falwell’s trademark infringement, false designation of origin, and unfair competition claims. Id. B. The Lamparello Decision Does Not Conflict With the Initial Interest Confusion Doctrine. The Fourth Circuit in Lamparello did not reject the initial interest confusion doctrine. In assessing the likelihood of confusion caused by Lamaprello’s website, the Fourth Circuit stated it was “follow[ing] a very different mode of analysis,” but it did not reject initial interest confusion as Google suggests. Accordingly, VoA submits that Lamparello does not foreclose recognition of initial interest confusion in the Fourth Circuit,’ To be sure, initial interest confusion does not automatically give rise to trademark infringement liability, nor is it a shortcut to finding infringement, Whether likelihood of confusion exists based on a totality of the circumstances in a given case remains the conclusive determination. See Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 464 F. Supp. 2d 495 (B.D. Va. 2006) aff'd, 507 F.3d 252 (4% Cir. 2007). Initial interest confusion is simply a factor that needs to be weighed in the overall analysis. Neither the endorsement of the initial interest 5 In Carl y. bernardicarl.com, 662 F.Supp.2d 487 (B.D. Va. 2009), the comments of the trial court concerning initial interest confusion are, at best, confusing. VoA submits that initial interest confusion is no more foreclosed by Carl than it is by Lamparello. 21doctrine by this Circuit or a finding that initial interest confusion exists in this case will relieve Rosetta Stone, or any plaintiff in the Fourth Circuit, from establishing likelihood of confusion going forward. According to Lamparello, proper consideration of the likelihood of confusion factors merely requires that the trier of fact take into account the totality of the circumstances of a trademark’s use, including the existence of initial interest confusion. In Lamparello, this court examined the allegedly infringing use “in the context” in which it was “seen by the ordinary consumer.” Lamparello, 420 F.3d at 315. In so doing, the Lamparello court, in effect, looked to the totality of circumstances, weighed the Pizzaria Uno factors, and in the final analysis found that some factors were more significant than others. For example, because Lamparello maintained a “gripe site” to criticize Falwell, the court was clearly cognizant of the First Amendment issues, that might have been implicated if it chose to ignore the content and context of the alleged infringement, and simply enjoined Lamparello’s right to engage in critical speech under the guise of trademark protection. Trademark infringement cases are replete with unique situations, and Lamparello was no exception. In short, the court’s decision in Lamparello to require content and context to be taken into consideration in domain name and web site cases is simply a restatement of the totality of circumstances appropriate to any likelihood of 22confusion analysis. It is not necessarily a rejection of initial interest confusion, but rather a choice not to consider it given that certain factual circumstances made other likelihood of confusion factors more paramount, The Lamparello court recognized as much, stating that the initial interest confusion theory did “not apply in the case at hand.” Lamparello at 316 (emphasis added). ‘The District Court’s rigid, formulaic approach to resolving the likelihood of confusion issues stemming from Google’s AdWords program is simply not conducive to determining liability. In fact, endorsing the District Court’s approach and reasoning could significantly harm trademark enforcement. When faced with a situation in which initial interest confusion can and does take on significance, this type of confusion merits strong consideration, In Rosetta Stone’s case, the District Court made no findings conceming the impact of initial interest confusion on the likelihood of confusion determination, Given the confusing nature of the sponsored advertisements at issue, the District Court should consider Rosetta Stone’s evidence and weigh it accordingly. C. Actionable Use of Third-Party Trademarks as Search Engine Keywords Does Not Require User Diversion. Google argues that infringement liability cannot result from initial interest confusion on the Internet when using search engine keywords, because such use merely provides consumers with choices rather than diverts them to a third-party’s web site. Opposition at 11. Google cites a single trial court decision for this 23proposition, JG. Wentworth S.S.C. LP v. Settlement Funding, LLC, No. 06-0597, 2007 U.S. Dist Lexis 288 (E.D. Pa. Jan. 4, 2007) (Lanham Act recognizes pre-sale confusion and extends protection “even if confusion as to the source of the goods is dispelled by the time any sales are consummated.”). Google misses the point: initial interest confusion is not, nor should it be, premised on potential customers actually being diverted. A requirement to demonstrate diversion would be tantamount to a requirement for proof of actual confusion, Not only is actual confusion never a requirement for likelihood of confusion, it runs contrary to initial interest confusion theory. Even Google’s authority admits this point. 24CONCLUSION For the foregoing reasons, the VoA supports the appeal of Rosetta Stone and respectfully asks for reversal of the District Court Opinion. Dated: November 1, 2010 Respectfully submitted, Thomas G. Southard, Esquire Karl Wm. Means, Esquire Alan B. Sternstein, Esquire Shulman, Rogers, Gandal, Pordy & Ecker, P.A. 12505 Park Potomac Avenue Potomac, Maryland 20854 Tele: (301) 230-5200 Attorneys for Volunteers of America, Inc, 25UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 10-2007 Caption: Rosetta Stone Ltd. v. Google Inc. CERTIFICATE OF COMPLIANCE WITH RULE 28.1(e) or 32(a) Certificate of Compliance With Type-Volume Limitation, Typeface Requirements, and Type Style Requirements 1. This brief complies with the type-volume limitation of Fed. R. App. 28.1(e)(2) or 32(a)(7(B) because: [Appellant's Opening Brief, Appellee's Response Brief, and Appellant's Response/Reply Brief may not exceed 14,000 words or 1,300 lines; Appellee's Opening/Response Brief may not exceed 16,500 words or 1,500 lines; any Reply or Amicus Brief may not exceed 7,000 words or 650 lines; line count may be used only with monospaced type] = this brief contains 5445 words, excluding the parts of the brief exempted by Fed. R. 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