Opinion ID: 626941
Heading Depth: 5
Heading Rank: 2

Heading: Actual Confusion.(i) Actual Purchaser Confusion

Text: Rosetta Stone presented both survey and anecdotal evidence of actual confusion in connection with Google's use of trademarks in its AdWords program. See George & Co., 575 F.3d at 398 (Actual confusion can be demonstrated by both anecdotal and survey evidence.). Both types of evidence are relevant, and neither category is necessarily required to prove actual confusion. See Tools USA & Equip. Co. v. Champ Frame Straightening Equip., Inc., 87 F.3d 654, 661 (4th Cir. 1996). First, the record includes the deposition testimony of five consumers who attempted to buy a ROSETTA STONE software package via the Internet in 2009 after Google began permitting use of ROSETTA STONE and other trademarks in the text of the sponsored links. Each of these would-be customers purchased bogus ROSETTA STONE software from a sponsored link that they mistakenly believed to be either affiliated with Rosetta Stone or authorized by Rosetta Stone to resell or distribute genuine software. In each instance, the customer received fake software that would not load onto his or her computer or was so faulty after loading as to be altogether useless. Each witness testified that he or she called Rosetta Stone directly, believing that Rosetta Stone would assist because it was a defective genuine product or that Rosetta Stone had empowered the reseller to offer its products. Typical of this set of witnesses was Steve Dubow, a college-educated founder and owner of a software company. Mr. Dubow testified that he wanted to learn Spanish and, after conducting his own research on the Internet, concluded that the ROSETTA STONE brand was best for him. Mr. Dubow then described how he arrived at the decision to purchase from bossdisk.com, one of the sponsored links that was selling counterfeit ROSETTA STONE products: ... At the time that you entered the terms ... Rosetta Stone in the Google search engine ... in October 2009, do you recall whether any advertisements appeared on the first page? ... [W]hat do you mean by advertisements? Q. Links that appear to you to be companies selling goods in response to your query. A. Yes.... There were quite a few under that description, yes. Q. What do you recall seeing on the search page results when you entered Rosetta Stone in the Google search engine? A. I saw a number of sites ... advertising Rosetta Stone software for a number of different discounted prices. What attracted us to this particular site was that they presumed to be a Rosetta Stone reseller reselling OEM or original equipment manufactured product. . . . Q. What do you mean by reseller? A. That they were a ... sanctioned reseller of Rosetta Stone product. J.A. 4614c-4615a. Once Mr. Dubow received the shipment from bossdisk.com and determined that the software appeared to need a key code to become fully operational, he called Rosetta Stone because he thought that since this company was a representative perhaps they just forgot to put the welcome kit in this package and they would have a key. J.A. 4620c. The district court dismissed this anecdotal customer testimony as evidence of actual confusion for several reasons. We agree with Rosetta Stone that none of these reasons provide a proper basis for rejecting this testimony completely. First, the district court concluded that the witnesses indicated they knew they were not purchasing directly from Rosetta Stone's site and, therefore, none of the Rosetta Stone witnesses were confused about the source of their purchase but only as to whether what they purchased was genuine or counterfeit. Rosetta Stone, 730 F.Supp.2d at 544. More than just source confusion is at issue in an infringement claim since [t]he 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. Doughney, 263 F.3d at 366 (emphasis added) (internal quotation marks omitted). The confusion that is remedied by trademark and unfair competition law is confusion not only as to source, but also as to affiliation, connection or sponsorship. 4 McCarthy on Trademarks § 23:8. The district court also reasoned that none of the five witnesses were confused by a sponsored link that conformed to Google's policies i.e., used the Rosetta Stone Marks in connection with advertising genuine goods. Rosetta Stone, 730 F.Supp.2d at 543. This is no basis, however, for rejecting this testimony. Whether the sponsored link conforms to Google's policy is not an issue that bears upon whether the consuming public, which is not privy to these policies, is confused by the actual use of the trademarks in sponsored links. What matters is whether the defendant's actual practice is likely to produce confusion in the minds of consumers about the origin of the goods or services in question. CareFirst of Md., 434 F.3d at 267 (emphasis added) (internal quotation marks omitted). Finally, the district court dismissed the anecdotal evidence as de minimis given that there were only five instances of actual confusion out of more than 100,000 impressions over six years. Rosetta Stone, 730 F.Supp.2d at 543. And, indeed, [e]vidence of only a small number of instances of actual confusion may be dismissed as de minimis  where the number of opportunities for confusion is great. George & Co., 575 F.3d at 398; see 4 McCarthy § 23:14 (If there is a very large volume of contacts or transactions which could give rise to confusion and there is only a handful of instances of actual confusion, the evidence of actual confusion may receive relatively little weight.). Rosetta Stone presented the deposition testimony of five individuals who had experienced actual confusionthe maximum number of actual confusion depositions permitted by the district court in this case. The record, however, contains other evidence of actual confusion. Rosetta Stone presented evidence that from April 1, 2009, through December 9, 2009, Rosetta Stone's customer care center received 123 complaints from individuals who ha[d] purchased pirated/counterfeit software believing the software to be genuine Rosetta Stone product, J.A. 5427, and Rosetta Stone received 139 additional complaints from December 9, 2009, through March 8, 2010. Although this evidence does not indicate whether each customer logging a complaint made the purchase via a sponsored link, it is reasonable, for purposes of summary judgment, to infer that a great number of these individuals were confused by the apparent relationship between Rosetta Stone and the sponsored link given that Google began allowing trademarks to be displayed in the ad text in 2009 and in light of the evidence showing a substantial proliferation of sponsored links to pirate/counterfeit sites. Id.