Via Slashdot we find a PC mag article that states:

Rosetta Stone Inc, a provider of language-learning software, said it filed a lawsuit against Google Inc in a U.S. federal court, alleging trademark infringement.

In the lawsuit, the company alleged that Google is allowing third parties, including individuals involved in software piracy, to purchase the right to use its trademarks—or other “confusingly similar” terms—in Google’s Adwords advertising program.

We saw earlier last month that it looked like Google was going to allow brand bidding. On the other hand, we all know tons of people who have had their Adwords Accounts banned for trademark infringement. Then there are these lawsuits saying that Google is allowing all sorts of trademark infringement in their adwords campaigns.

It seems like they have a “no tolerance” policy to some unlucky adwords buyers but not with all of them. They’re trying to walk a tightrope balancing maximum profit on the one hand with minimal legal exposure on the other. Google needs cases like this Rosetta stone case to be settled so they can know how best to proceed from a business / legal perspective.