Rosetta Stone: Can It Unlock the Secrets of Trademark Infringement?

Language education company Rosetta Stone Inc. and rival Topics Entertainment Inc. sued each other this week alleging trademark infringement and seeking a declaration of non-infringement over use of yellow boxes with black lettering.

Renton, Washington-based Topics Entertainment Inc. filed suit Monday in U.S. District Court for the Western District of Washington. Topics wants the court to declare its use of yellow boxes with black lettering on its language software, along with images of blue icons and smiling people, does not violate any rights held by Rosetta. It also wants the judge to declare that its use of the phrase ''As effective as Rosetta Stone for a fraction of the cost!'' is not false advertising. It also asks for attorney's fees and other costs of the suit.

The following day, Arlington, Virginia-based Rosetta filed suit in the U.S. District Court for the Eastern District of Virginia. Rosetta Stone, in turn, wants the court to hold Topics liable for infringing on its yellow-and-black boxes and for the alleged false advertising. The company wants Topics to be barred from those practices and is asking for unspecified damages.

Topics said it began using the coloring scheme on its products in 1999, five years before Rosetta began using it in 2004. Rosetta said in its suit that it began using the colors in 2004, and consumers now associate the packaging with Rosetta Stone. The company said the coloring is ''an exceptionally valuable asset'' because consumers rely upon it to identify Rosetta's products. Topics' Instant Immersion product packaging is ''confusingly similar'' to Rosetta's, it said in the suit.

Both sides said they had tried to settle the issue earlier this summer, but when that failed, they decided to file suits.

Topics Entertainment tried to explain it was first and that other companies in the same category use similar packaging, company president Greg James said in a statement. The Instant Immersion language software makes up about 25 percent of Topics' total revenue.

''We finally decided that we weren't getting anywhere and that's when we went to court to get some help,'' he said.

Rosetta Stone denies that Topics began using the yellow coloring as far back as 1999, said general counsel Michael Wu. He said the company feels Topics is trying to confuse consumers.

''Consumers have come to identify us and purchase the Rosetta Stone brand based on the style of our box and we think they're trying to free ride on the goodwill we've earned through our recognition,'' he said.

The Trademark Company