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The Association for Competitive Technology JoinsOne of Five AmicusBriefs with More Than 30 Companies and Organizations in Suppo

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^{Published in Science and Technology on Thursday, November 4th 2010 at 7:30 GMT by Market Wire}  

WASHINGTON--([ BUSINESS WIRE ])--The Association for Competitive Technology and a diverse group representing a broad cross-section of the business sector havefiled an amicus brief in the Fourth Circuit Court of Appeals seeking reversal of certain key holdings in a U.S. District Courta™s ruling in the case of Rosetta Stone Ltd. vs. Google Inc.

"It allows counterfeiters to advertiseon its networks, forcing companies like Rosetta Stone to outbid pirates to prevent them from selling fraudulent copies of its software. Since Google controls 78% of thesearch advertising marketplace, Rosetta Stone has no choice but fight the counterfeiters by continually paying Google more money for advertising."

Publisher of popular language instruction software, [ Rosetta Stone ] (NYSE:RST) has filed suit against Google to halt the internet advertising giant from promoting criminals that stealand counterfeit its software. Google users searching for "Rosetta Stone" are often confronted with advertisements for counterfeit copies of the software being sold byforeign criminal syndicates. Google allows counterfeiters and pirates to place search-based advertisements throughout its internet advertisement network. This not onlydepresses trademark holders' sales, but often requires them to bid in Adword auctions just to protect their own trademarks.

"Google is using its search advertising dominance to shakedown trademark holders," said ACT executive director Morgan Reed. "It allows counterfeiters to advertiseon its networks, forcing companies like Rosetta Stone to outbid pirates to prevent them from selling fraudulent copies of its software. Since Google controls 78% of thesearch advertising marketplace, Rosetta Stone has no choice but fight the counterfeiters by continually paying Google more money for advertising."

Complicating matters is that pirates place ads in response to search queries based on keywords, geographic location and a constantly changing number of othervariables. This forces Rosetta Stone to continually search for the pirates' ads in different places, using different criteria, in the effort to combat counterfeiting.Trademark holders' efforts to find and stop counterfeiters using Google's search advertising networks is a giant game of whack-a-mole.

While Google allows trademark holders to register complaints against counterfeiters, Google makes it a very cumbersome process, and often too costly and timeconsuming for small businesses.

The brief focuses on two key aspects of the district courta™s ruling regarding settled tenets of trademark law. First, the district court applied the wrong standard on theissue of dilution under in order to prove that Google had adiluteda™ its trademarks that are not required under federal trademark dilution law. This has broad-reachingadverse implications for all owners of famous brands seeking to protect their brands from dilutive uses by others.

Second, the brief points out problems with Google's interpretation of afunctionalitya, an element of the law intended to prevent a person from claiming trademark rightsin afunctionala™ product features. In extending the functionality doctrine to protect Googlea™s use of trademarked words in its aAdwordsa™ program, the court opened thedoor for anyone to claim that its use of another partya™s famous brand name is beneficial to its business and thereby escape liability for trademark infringement.

About ACT

ACT is an international grassroots advocacy and education organization representing more than 3000 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. We advocate for an environment that inspires and rewards innovation. We also provide resources like the Innovators Network to help our members leverage their intellectual assets to raise capital, create jobs, and continue innovating. In addition to its small business membership, ACT has several Sponsor Members including eBay, Microsoft, Oracle, Orbitz and VeriSign.