Three separate cases question legality of these ad units -- here's how to stay out of trouble.
Three courts have recently issued rulings on the legality of pop-up ads, but they have come down on different sides of the issue. The primary question is whether pop-up ads, which are usually triggered when someone enters certain terms in a search engine, cause consumer confusion and violate the federal Lanham Act, which contains the federal statutes governing trademark law in the United States.
One court has said yes, while two others have said no. Although the courts have not reached the same conclusion, their decisions offer some practical tips for those using or considering using pop-up ads as part of their online marketing.
All three cases were brought against WhenU.com, which provides software that tracks individuals’ Internet usage and displays pop-up ads on the user’s computer screen when the user visits certain Web sites or enters certain search terms in a search engine. WhenU.com packages this software with other features, such as screen savers, for free downloads. Some users who have the WhenU.com software on their computers do not know it is on their computers and some users do not know what it does. WhenU.com makes money by selling the advertising space on the pop-up ads to advertisers.
The first two cases to be decided resulted in rulings in favor of WhenU.com. In both cases, the plaintiffs claimed that pop-up ads caused consumer confusion. They argued that when an Internet user entered the plaintiff’s trademarked name in a search engine or its URL in a browser window, the user would be confused when someone else’s pop-up ad appeared and obscured the plaintiff’s Web site. Internet users might think the pop-up ad was affiliated with or sponsored by the plaintiff since it appeared after typing in the plaintiff’s name or URL.
Both courts listed several reasons for concluding that consumers would not be confused by pop-up ads. First, consumers had voluntarily downloaded the WhenU.com software and had consented to view pop-up ads. Second, the WhenU.com software does not prevent users from reaching the plaintiffs’ Web sites because users can simply close the pop-up ad. Third, the pop-up ads appear in a WhenU.com-branded Web site that is separate and distinct from the plaintiffs’ site. Fourth, pop-up ads do not appear “on” the plaintiffs’ Web sites or modify their sites or interact with them. See U-Haul International, Inc. v. WhenU.com, Inc., 279 F. Supp. 2d 723 (E.D. Va, Sept. 5, 2003); Wells Fargo & Co. v. WhenU.com, Inc., 293 F. Supp. 2d 734 (E.D. Mich., Nov. 19, 2003).
In the third and most recent case, a court found that pop-up ads might cause “initial interest” confusion, which is when a consumer who is seeking a particular product is lured away to a competitor’s product because of the competitor’s use of another’s trademark. This doctrine was first applied to the use of a competitor’s trademark in metatags, which was found to be a form of trademark infringement. If Company A used a competitor Company B’s trademark in its metatags, then consumers who searched the Internet using Company B’s trademark would instead find Company A’s Web site. Once they clicked on Company A’s Web site, they would realize they were not at Company B’s site, but the damage had already been done because the Internet user was lured to Company A’s site and might stay there.
In the pop-up ads case, filed by 1-800 Contacts against WhenU.com and Direct Vision, the court found that pop-up ads would likely cause initial interest confusion, and granted the plaintiff’s motion for a preliminary injunction to stop WhenU.com from displaying competitors’ pop-up ads tied to the plaintiff’s trademark. See 1-800 Contacts, Inc. v. WhenU.com and Vision Direct, Inc., 2003 U.S. Dist. LEXIS 22932 (S.D.N.Y., Dec. 22, 2003).
Until this issue is resolved in the courts or by the legislature, there is some risk in using pop-up ads as part of your online marketing. But if you choose to use pop-up ads, you should make sure the pop-up ad is clearly distinguished from competitors’ Web sites and products. The ad should be clearly branded as your own and could contain a disclaimer saying that it is not affiliated with or sponsored by any other entity. You should also make it easy to close the pop-up ad; do not disable or hide the close button. Finally, you should only sign up with a pop-up ad broker who provides notice to Internet users that they are downloading pop-up ad software.
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