Rosetta Stone suit vs Google dismissed

One of the business sites of Internet search engine Google Inc is shown on a computer screen in Encinitas, California April 13, 2010.

NEW YORK (Reuters) - Language software maker Rosetta Stone Inc's trademark infringement lawsuit against Google Inc has been dismissed by a federal judge.

Rosetta has vowed to keep pursuing the case which has broad implications for trademark ownership in the digital age.

In the suit filed in 2009, Rosetta claimed Google profits by allowing rivals that pirate its technology to buy the top "sponsored link" ad on search results pages.

Consumers who search for "Rosetta Stone" on the popular search engine and click on a "sponsored ad" may be visiting the website of a software pirate that purports to be Rosetta, but in reality sells a sub-standard product, the lawsuit claimed.

In a statement released Thursday, Google said the ruling was "consistent with a growing line of decisions" about the Internet.

"Users searching on Google benefit from being able to choose from a variety of competing advertisers, and we've found no evidence that legitimate use of trademarks as keyword triggers or in the text of advertisements confuses consumers," the Mountain View, California-based company said.

"It's not just about Rosetta Stone, frankly," Chief Executive Tom Adams told Reuters. "This is happening for lots and lots of other companies. We're willing to stick our neck out. Google is a very intimidating company."

The company is still awaiting the full ruling from Judge Gerald Bruce Lee of the U.S. District Court for the Eastern District of Virginia.

Rosetta, based in Arlington, Virginia, said it had hoped for a full jury trial, and may appeal to a higher court.

The company claims Google "picks and chooses" to whom it sells sponsored ads.

A Reuters search late on Thursday afternoon showed no sponsored ads for Washington Post Co or American Airlines parent AMR Corp.

However, a sponsored ad for Rosetta Stone links to the website, www.studyingsoftmall.info, which claims to offer discounted Rosetta Stone products, though Rosetta is not affiliated with that website.

"Until you're subjected to this kind of piracy and sale of your trademark to the highest bidder, you don't really understand the case," Adams told Reuters.

Rosetta sells software to help users learn one of 31 languages, including Farsi, French and Irish.

The company is boosting its presence outside the United States, hoping to grow its international business from 11 percent of revenue to as much as 50 percent in the next four years.

Google, the world's most popular Internet search engine, makes most of its revenue from advertising. The company said earlier this month that first-quarter revenue rose 23 percent, largely due to a rebound in Internet advertising.

Shares of Rosetta fell 0.6 percent to close Thursday at $26.33. Google rose 0.5 percent to $532 on Nasdaq.

(Reporting by Ernest Scheyder; Additional reporting by Emily Chasan in New York and Alexei Oreskovic in San Francisco; Editing by Matthew Lewis and Richard Chang)