1-800 Contacts - Pop-up Ad Lawsuit

Pop-up Ad Lawsuit

1-800 CONTACTS sued WhenU over pop-up advertisments in 2002. In the suit against WhenU, which also named Vision Direct as a co-defendant, 1-800 CONTACTS alleged that the advertisements provided by WhenU, which advertised competitors of 1-800 CONTACTS(such as Vision Direct) when people viewed the company's web site, as "inherently deceptive" and one that "misleads users into falsely believing the pop-up advertisements supplied by WhenU.com are in actuality advertisements authorized by and originating with the underlying Web site".

In December 2003 Judge Deborah Batts of the United States District Court for the Southern District of New York granted a preliminary injunction, barring WhenU from delivering the advertisements to some web surfers, on the grounds that it constituted trademark infringement violating the Lanham Act.

However, WhenU appealed, and the United States Court of Appeals for the Second Circuit held that WhenU's actions did not amount to the "use" that the Lanham Act requires in order to constitute trademark infringement. The appeal court reversed the preliminary injunction and ordered the dismissal of all claims made by 1-800 CONTACTS that were based upon trademark infringement, leaving the claims based upon unfair competition and copyright infringement. The District court had already found that 1-800 CONTACTS was unlikely to prevail in its copyright infringement claims, finding that "the conduct neither violated plaintiff's right to display its copyrighted website, nor its right to create derivative works therefrom".

The Electronic Frontier Foundation criticized the case, stating that it was "not to help fight off adware and spyware" but was rather intended to allow companies "to gain control over desktop", where the legal principles being employed "would create a precedent that would enable trademark owners to dictate what could be open on your desktop when you visit their websites". At the time of the appeal it filed an amicus curiae brief urging the Appeals Court to limit the reach of the "initial interest confusion" doctrine that had been applied by the District Court.