Pop-ups Pushed Down in US Litigation

A previous issue of E-TIPSâ„¢ (Vol 2, No 8, September 25, 2003) reported that a US District Court in Virginia had ruled in favour of WhenU.com, a distributor of free advertising software, in a case involving trade-mark and copyright violations alleged to result from pop-up ads for competing companies. In November, in a similar lawsuit brought in Detroit, the Court held that consumers were not likely to be confused by the source of the pop-up ads and denied an injunction against WhenU. However, in December 2003, a US District Court in New York granted a preliminary injunction against WhenU, barring the company from displaying pop-ups for VisionDirect.com when Internet users visit the web site of the competing plaintiff, 1-800 Contacts, Inc. Contact lens retailer 1-800 Contacts, relying on trade-mark and copyright law, argued that consumers would be confused and were "likely to have the impression that the pop-up advertisements operate in cooperation with, rather than in competition against, the plaintiff." WhenU's desktop software delivers a pop-up ad when a user enters a web site address into the browser. Users agree to receive these ads when they download and install the free WhenU software which tracks users' Web-surfing activity. This tracking enables WhenU to display a competitor's ads when users visit various sites. Although the Court denied the plaintiff's motion for an injunction based on copyright claims, it found a violation of US trade-mark law because WhenU had used the 1-800 Contacts trade-mark in a way that would be likely to confuse consumers. By causing pop-up ads for competitors to appear when software users have specifically attempted to access the plaintiff's web site, on which the plaintiff's trade-mark appears, and by including the plaintiff's URL, <1800Contacts.com>, in its proprietary directory of terms that trigger pop-up ads on the software users' computers, the Court ruled that WhenU had infringed the plaintiff's trade-mark. Although the trial of this case may eventually yield a different result, this initial ruling is important to the online advertising industry and, in the short run, there is likely to be an increase in the number of such lawsuits. For further news items on this story, visit: www.internetnews.com/IAR/article.php/3292731; and www.nytimes.com/2004/01/05/technology/05ecom.html. To read the full reasons for judgment, see: www.nysd.uscourts.gov/courtweb/pdf/D02NYSC/03-10121.PDF. Summary by: Clare McCurley