Pop-Up Advertisements Are Not Use Under Trademark Law

A company that places pop-up ads on your computer when you search for a competitor’s website is not using the competitor’s trademark, a federal appellate court ruled.

1-800-Contacts, Inc. sued WhenU.com for the company’s practice of placing pop-up ads of other contact lens companies on a computer when the user types in 1-800-Contacts. The trial court found that the practice violated the Trademark Act because WhenU.com was using 1-800-Contacts trademark and granted 1-800 a preliminary injunction to stop WhenU’s practice. However, the 2nd Circuit found that the practice did not amount to a use under federal law.

WhenU.com includes the web site address of 1-800-Contacts in its data base. The data base is accessed when customers sign up for the “SaveNow” service offered by WhenU.com. The SaveNow software program searches its data base for similar services to those being searched or accessed by computer users and then places its own pop-up advertisement either in front of or behind the search results. The court found that WhenU does not use the trademark since it does not “place” the 1-800 trademark on any goods or services in order to pass them off as coming from 1-800-Contact. “That fact is that WhenU does not reproduce or display 1-800’s trademarks at all, nor does it cause the trademarks to be displayed to a C-user,” the court found. As a result, there is no likelihood of confusion.

The court reasoned that the WhenU use is widely followed in other contexts. “Indeed, it is routine for vendors to seek specific ‘product placement’ in retail stores precisely to capitalize on their competitors’ name recognition. For example, a drug store typically places its own store-brand generic products next to the trademarked products they emulate in order to induce a customer who has specifically sought out the trademarked product to consider the store’s less-expensive alternative.”

In addition, the court found that the WhenU’s pop-ups are an authorized use since the computer user agreed to having the advertisements placed on his or her computer when he or she signed up for the SaveNow service.

1-800 Contacts, Inc. v. WhenU.Com, Inc., and Vision Direct, 2nd Cir. No. 04-0026 CV, Decided June 27, 2005.