The company relied on patents, trade secrets, trademarks, copyrights, and nondisclosure and other contractual arrangements to protect its intellectual property. Exhibit 4 lists the company’s intangible assets. Rosetta Stone also protected its trade dress, or the visual appearance of its products and its packaging. The company believed that its yellow box and blue logos were important in building Rosetta Stone’s brand image and distinguishing its solutions from those of its competitors. In addition, individuals who worked for Rosetta Stone were required to sign agreements that prohibited the unauthorized disclosure of the company’s proprietary rights, information, and technology.
Each CD-ROM came with a product key that verified that the disc was not illegally copied. The key activated the program after installation and prevented multiple accesses to the product. Rosetta Stone customers had to agree to terms listed in a license agreement in order to use the programs. Software could be installed on more than one personal computer, but not more than one person was allowed to use the program at the same time. Those who purchased the CD-ROM were not allowed to make backup copies. Online users were forbidden to transfer their user name, password, or activation ID to any other person.