WhenU.com has won a court battle over pop-up ads that it displayed
on the web site of contact lens seller 1-800 Contacts, after the
Second Circuit Court of Appeals ruled that the ads did not breach
1-800 Contacts’ trade marks.
The Court found that WhenU did not “use” 1-800’s trade marks
when it included the company's web address – which is similar to
its trade marks – in an unpublished search-terms directory, or when
it caused pop-up ads to appear on the 1-800 web site when viewed by
those with WhenU's software on their computers.
WhenU's software exists on 25 million computers, largely as a
result of its partnership with Kazaa, the popular file-sharing
service.
When internet users download the Kazaa software they also get
WhenU's ad-serving software, or adware. Its software examines
keywords, URLs and search terms in use on the user's browser and
then selects which ads to serve the user.
Following a line of other disgruntled site owners, 1-800
Contacts sued WhenU in October 2002 over the appearance of pop-ups
advertising rival contact lens company Vision Direct when users had
typed in search terms relating to ‘1-800 Contacts’.
In December 2003, Judge Deborah Batts of the Southern District
Court of New York granted 1-800 Contacts an injunction, prohibiting
WhenU from sending the pop-ups, and requiring that the trade marked
terms be removed from its search terms database.
That decision went against a trend of rulings in favour of the
pop-up ad company, and has now been overruled.
According to the ruling issued by the Court of Appeals on
Monday, WhenU’s targeted delivery of ads does not amount to trade
mark infringement.
“The fact is that WhenU does not reproduce or display 1-800’s
trade marks at all, nor does it cause the trade marks to be
displayed to a [computer user],” wrote chief Judge John Walker,
giving the opinion of the Court. “Rather, WhenU reproduces 1-800’s
web site address, which is similar, but not identical, to 1-800’s
1-800 CONTACTS trade mark,” in an inaccessible directory.
The Court distinguished WhenU's conduct from that of its
competitors – noting that WhenU brands its ads prominently, does
not disclose the proprietary contents of its directory and does not
permit advertisers to pay for theirs ads to appear on specific web
sites.
WhenU’s lawyer, Celia Barenholtz, of the law firm of Kronish
Lieb Weiner and Hellman, said:
"The opinion is the most important ruling to
date on the subject of targeted internet advertising, and could
have broad ramifications for search engines such as Yahoo! and
Google that allow advertisers to buy targeted advertising based on
brand names of competitors."
Google has been the subject of several suits in Europe and the
US over its AdWords service. This allows advertisers to sponsor
particular search terms so that, whenever that term is searched
for, the advertiser’s link will appear next to the search
results.
Google had taken an interest in the WhenU case, filing a
statement with the court and urging it to dismiss the trade mark
claims.
