Pop up ads


While the Australian Competition and Consumer Commission is extracting undertakings from some people to stop buying "sponsored links", the Second Circuit Court of Appeals in the USA finds that pop up ads do not infringe registered trade mark rights or unfair competition over there.

The case is 1-800 Contacts Inc v Whenu.com Inc. You can find the text here (pdf) and commentary here and here.

Apparently, end-users like you and I could download an application from WhenU which includes the "SaveNow" directory. The SaveNow directory contains some 32,000 website addresses and address fragments, 29,000 search terms and 1,200 keyword algorithms. While the end-user was working away at his or her computer, the SaveNow directory displayed "contextually relevant" WhenU special offers when it recognised an address or search term being typed into an internet browser. The special offers were displayed in a separate window to the browser's search results. To trigger ads from 1-800 Contacts' competitors, WhenU included the domain name www.1800contacts.com in the SaveNow directory as well as relevant generic terms such as "eye care" and "contacts".

The Second Circuit ruled that this use of www.1800contacts.com was not use as a trade mark. It was use of an address which was admittedly similar to the trade mark, but was not a trade mark. Further, the SaveNow directory was proprietary and its contents were not disclosed to, or accessible by, either the end-user or 1-800 Contacts' competitors. The Second Circuit in particular made much of the fact that WhenU did not sell rights to keywords or www.1800contacts.com and so distinguished GEICO v Google where a lower court had found trade mark infringement from the sale of keywords. Apparently, a special offer would not be generated by just typing in "1-800 Contacts", the trade mark.

The Second Circuit then went on to dismiss the allegations of trade mark infringement and unfair competition in relation to the display of the pop-up ads themselves. The Second Circuit considered that the pop up ads appearing in a separate window which was prominently branded with WhenU's trade mark had no tangible effect on the appearance or functionality of 1-800 Contacts' website. Nor was it contingent on use of 1-800 Contacts' trade mark. Rather, it arose from the mere happenstance that 1-800 Contacts had chosen a URL which was so similar to its trade mark. WhenU's conduct was analogised to the longstanding retail practice of placing similar products in proximity so "house brand" products are routinely placed alongside name brand products.

If we were to consider the facts under Australian law, it has long been accepted that simply stating an address as an address is not use as a trade mark and that mere internal use also is not use as a trade mark. So there may be some synergies on that aspect although when use as an address slides over the line into use as a trade mark can be rather a blurred question. One might also think that the ruling on the pop up ads, essentially that there was no misrepresentation or likelihood of deception, would have reasonance here too. The ACCC could gain encouragement, however, from the distinguishing of cases where keywords were offered for sale.

Posted: Wednesday - 13 July, 2005 at 02:57 PM         |

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