Tuesday, June 12, 2007

Stealth Trademarks: Pop-Up Ads

Another neat trick is the use of trademarks as trigger-terms that result in pop-up ads (I understand that Cerberus, the dog that guards the gates of Hades, has been reassigned to guard a special room where resides the inventors of pop-up advertising, spam, spyware and telemarketers). According to court accounts, some firms have created adware with databases of trigger-terms. When computer users type those trigger-terms into search engines, or when they access certain domain names, or however else these ingenious people might devise to trigger a response, a pop-up ad gloriously appears sharing news of valuable opportunities.

In reviewing these cases, the courts have considered the following theories and facts: trademark law and initial interest confusion, the fact that the adware program may have been voluntarily downloaded by the computer user, the fact that the popup ad makes no alteration or change to the underlying website, and the fact that the popup ad may not have the trademark term in it.

First, let’s see one where defendant loses: Newsweek Interactive Co., LLC, et al. v. The Gator Corp., (E.D. Va. 2002) In this case the court provides a one page order granting a motion for preliminary injunction against defendant. In other words, procedurally this is typically at the beginning of the litigation, where the plaintiff is arguing (a) I am really likely to win this case and (b) as long as defendant is doing these things, I feel pain. The court has not considered the case in depth and the court is not necessarily presenting a detailed finding of fact. In this case, Defendant, the pop-up company, loses. Note why: The Court says the Defendant is enjoined from:

  1. Causing its pop-up advertisements to be displayed on any website owned by or affiliated with the Plaintiffs without the express consent of the Plaintiffs;
  2. Altering or modifying, or causing any other entity to alter or modify, any part of any website owned by of affiliated with the Plaintiffs, in any way, including its appearance or how it is displayed…

The court believes that plaintiff’s websites are being mushed (and we have seen in the precedent of the framing cases that if you take someone else’s website and mush it, courts don’t like this).

Most likely you, the reader, are more familiar with how pop-ups work than this judge. When a pop-up appears, is it displayed on the webpage you are attempting to visit? Does it alter or modify that webpage? No! As annoying as pop-ups may be, the judge has his facts wrong. A pop-up is a fully separate browser window that pops-up and annoys you; it is its own webpage. And you sit there playing whack-a-popup, trying to close those things. It is not on the webpage you are attempting to see, nor does it alter it in any way. This distinction will become important in the next set of cases. By the way, Defendant Gator, now known as Claria Corp., reportedly subsequently settled many of these suits out of court.

Next is a set of cases known as the WhenU cases. WhenU apparently distributed adware that caused pop-ups to appear with third-party advertisements. When a website was visited, pop-ups would appear, sometimes from that website’s competitor. The pop-ups appear based on an algorithm WhenU employs to determine what might be relevant to the computer user (in other words, the advertiser does not have the opportunity to buy keywords). When a pop-up appeared, it indicated that it was from WhenU, and it did not include a trademark from the original webpage. Plaintiffs became quite bothered as pop-up ads from competitors magically appeared when people accessed their webpages. There had to be something untoward about this – so plaintiffs complained of trademark violations.

In these cases, the courts – and there have been several of them – have consistently found in favor of WhenU, concluding that the WhenU program was downloaded voluntarily by the computer user (usually bundled with something else the computer users downloaded – gotta read those user agreements to see what you are downloading!), that the WhenU program did not interact with third party webpages or their webservers, but instead interacted with its own webservers and the computer users’ screen. WhenU’s program, the court found, did not use plaintiff’s trademarks as trigger words, but instead triggered pop-ups based on domain names that are visited (which, as we know, can be identical with plaintiff’s trademark). In the frame around the pop-up, WhenU was identified, along with a “?” that, when clicked on, provided information about WhenU and the advertisements. Read the court decisions in 1-800 Contacts, Inc. v. WhenU.Com and Vision Direct, Inc., 309 F. Supp. 2d 467 (S.D.N.Y. 2003) rvsrd 414 F.3d 400, slip p. 21 (2d Cir. 2005) where the judges do a careful and extensive review of how pop-ups work.

In order to find a trademark violation, the court would have to find that defendant WhenU used a trademark in commerce without consent. WhenU has taken plaintiff’s domain name and included it in its own database, invisible to the computer user. The domain name (and if it is a trademark of plaintiff, the trademark) is not reproduced in the pop-up advertisement. The advertiser whose ad appears in WhenU’s service does not get to buy the trademark as a keyword. The trigger word is in WhenU’s database as a domain name and not as a trademark. In this case, the use of the trigger term is stealth and thus, according to the court, cannot constitute “use in commerce”:

A company’s internal utilization of a trademark in a way that does not communicate it to the public is analogous to an individual’s private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services.

1-800 Contacts, Inc. v. WhenU.Com and Vision Direct, Inc., 309 F. Supp. 2d 467 (S.D.N.Y. 2003) rvsrd 414 F.3d 400, slip p. 21 (2d Cir. 2005).

In one of the WhenU cases, Quicken had become displeased with WhenU’s practices and sued. However, the Court had to politely point out, as above, that not only did WhenU not interact with or alter plaintiff’s website, but also that Quicken had a division that took advantage of WhenU’s services. D’oh! Wells Fargo & Co. v. WhenU.com, 293 F.Supp. 2d 734 (E.D. Mich. 2003). See also U Haul Int'l, Inc. v. WhenU.com, Inc. , 279 F. Supp. 2d 723 (E.D.Va. 2003).

Here’s the scoreboard so far: with metatags, where the use of the trademark cannot be seen, inserting a trademark into the metatags is bad! With pop-ups, where the use of a trademark (only its not a trademark, it’s a domain name which is similar to a trademark, which seems a lot like a trademark…) cannot be seen, it’s stealth and therefore not “in use in commerce.”

Next time we consider whether “Do No Evil” Google has violated its prime directive by allowing advertisers to purchase trademarks as keyword trigger-terms for Google Ads.

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