2nd Circuit Rules Pop-up Ads Don't Use Trademarks

Today, the Second Circuit reverses the Southern District and rules that pop-up adware does not infringe on a trademark. 1-800 Contacts, Inc. v. WhenU, Inc.:

We hold that, as a matter of law, WhenU does not “use ”1-800’s trademarks within the meaning of the Lanham Act, 153 U.S.C. § 1127, when it (1) includes 1-800’s website address, which is almost identical to 1-800’s trademark, in an unpublished directory of terms that trigger delivery of WhenU’s contextually relevant advertising to C-users; or (2) causes separate, branded pop-up ads to appear on a C-user’s computer screen either above, below, or along the bottom edge of the 1-800 website window. Accordingly, we reverse the district court’s entry of a preliminary injunction and remand with instructions to (1) dismiss with prejudice 1-800’s trademark infringement claims against WhenU, and (2) proceed with 1-800’s remaining claims.

Eric Goldman: Important 2d Circuit Adware Case--1-800 Contacts v. WhenU: "I think the opinion is generally great. The lower court opinion was truly awful, and the Second Circuit clearly and unambiguously rejected that opinion. In particular, the court gave us lots of insights into what constitutes trademark "use" in the Internet keyword context. There has been considerable confusion on this very question, and the Second Circuit's opinion will be persuasive precedent in all future cases throughout the nation."

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