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Google got a dose of bad news today, as a court revived a longstanding trademark infringement case against it.

The U.S. Court of Appeals for the 4th Circuit has decided to address whether Google is in violation of trademark infringement for selling other companies the rights to use a copyright-protected brand name as an advertising search term.

Right now, clients of Google’s AdWords service can buy any number of specific search terms — terms people would type into a Google search bar — in an effort to drive traffic or attention to their website. The paid links are displayed somewhere near the regular search results. You don’t need to own a trademark in order to buy advertising for the term. In other words, if I wanted to buy advertisements that popped up whenever people searched for “Coke” or “Pepsi,” I could do that, even though the companies that own those trademarks might not be happy about it.

Rosetta Stone Inc., the company best known for producing language learning software, first filed the trademark lawsuit against Google in 2009, claiming that selling brand names as search terms would confuse consumers. It was dismissed a year later by a Virginia district court.

Today, the appeals court overturned the earlier decisions, thus reviving claims that Google could have directly infringed on Rosetta Store and diluted its brand.

“A reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks,” wrote Chief Judge William Traxler in the decisions for the court panel. Basically, that means Rosetta Stone has to prove that Google purposefully sold the search term “Rosetta Stone” to a competing software company that resulted in confusion to people wishing to buy language education software.

“We’re very pleased with the opinion, and we think it is an important precedent,” said Rosetta Stone’s lawyer Cliff Sloan.

This is a pretty important case because if Google is found guilty, it could drastically change the way things are marketed online. You’d not be able to buy search terms for any number of brands without running into legal trouble. It’s for that reason alone that I expect freedom of speech advocates to come out of the woodwork if the case advances further.

Via Reuters

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