Google and Rosetta Stone Trademark UpdateI could teach you how to speak my language, Rosetta Stone.”

That seemed to be the dialogue between Google and Rosetta Stone last week. On Halloween, the parties settled their 3+-year litigation, which concerned whether Google’s AdWord™’s program infringed Rosetta Stones trademarks by allowing competitors to buy “Rosetta Stone” as a keyword and use the trademarked term in the text of the competitors’ ads. The settlement followed the Fourth Circuit’s remand of a number of trademark issues, after the Eastern District of Virginia granted summary judgment in favor of Google.

Although the details of the settlement weren’t disclosed, Google and Rosetta Stone said that they have agreed “to meaningfully collaborate to combat online ads for counterfeit goods and prevent the misuse and abuse of trademarks on the internet.” Rosetta Stone called the settlement a “significant victory for consumer protection.”

So was this settlement a trick or a treat for trademark owners? There are a few things to keep in mind regarding this case.

First, whatever the terms of the settlement are, those terms apply only to Google and Rosetta Stone. So that swampy keyword advertising case law is still out there and we’ll have to deal with it in any future challenges involving trademark issues and Internet ad words. And that case law might not be useful in future cases because Google is always tweaking its algorithms.

Second, Rosetta Stone is a big company with a lot of money to spend on litigation. But Google has more money than, well, almost everyone. So if a big company like Rosetta Stone settles, then it’s unlikely that smaller companies could afford to litigate the “trademark term as keyword” issue to a final legal judgment. Only two lawsuits against Google that concern AdWords are still pending, and those plaintiffs, CYBERSitter and Home Décor Center, don’t have Rosetta Stone’s resources. As scholar Eric Goldman writes, “Google is tantalizingly close to successfully running the table on all of the US trademark challenges to its AdWords practices.  When this happens, Google will have legitimized the billions of dollars of revenues it makes by selling trademarked keywords in AdWords.”

Finally, keyword cases seem to have contorted their way into traditional trademark doctrines that aren’t a great fit to solve the problem. The real injury is the use of Internet-based advertising to sell counterfeit goods. And Google at least has a policy in place to try to combat that problem.

So, while this settlement might be a bit unsatisfying for those seeking legal certainty, perhaps cooperation between Google and trademark owners to fight counterfeit e-commerce sales of trademark-protected products is a better way to address the the issue.