Popping up less

Pop-up purveyor Claria is attempting to recast its image and move away from the pop-up game. Currently, Claria’s GAIN software monitors the behavior of internet users who have installed the software, either intentionally or inadvertently and uses that clickstream data to trigger pop-up ads in the GAIN application that appear over or under third party websites. Web publishers are, not surprisingly, less than enamored of the practice, and a number have sued Claria (formerly called Gator.com) claiming violations of copyright, trademark and unfair competition laws. Claria has settled most of these cases, though two are still pending.
Today in the NY Times, Bob Tedeschi reports that Claria is introducing a new service that should give the company a better relationship with online publishers: Pop-Up Company Tries a New Path

The service, called BehaviorLink, will operate much like Claria’s existing approach in that it will track the surfing patterns of some 40 million Internet users who downloaded free music-sharing software from Kazaa or other free programs like weather-tracking software from Claria.
But under the new program, Claria will use this information to buy ads on publisher sites, rather than use pop-ups.

Claria will likely enjoy better relationships with online publishers and probably lose its status as a magnet for litigation. However, individual internet users who are concerned about online privacy should be wary of this program. Currently, people who have GAIN installed on their computers are made aware of that by the number of pop-up ads which annoy them while surfing the web. With BehaviorLink, internet users who have GAIN installed on their system may have less notice that their online behavior is being monitored (as part of a measure of aggregate online behavior– Claria claims to not track individually identifiable information.) Because many users are not aware they installed GAIN, either because they do not read the 5900-word license agreement or because a third-party installs it as part of a “drive-by download,” many may have their online behavior watched without their knowledge.
Because Claria now is less likely to be target for lawsuits by online publishers as it becomes an ad broker rather than a pop-up purveyor, only legislation is likely to force the company to engage in better disclosure.
The SPY Act ,introduced in the House this session as HR 29, would require notice and consent prior to installation of software than transmits clickstream data in order to “deliver advertising to, or display advertising on, the computer.” The notice must notify users about such practices by using the statement: “This program will collect information about Web pages you access and will use information to display advertising on your computer. Do you accept?”
If adware stops delivering pop-up ads, a clear notice and consent requirement may be the most efficient way for internet users to learn that their net activity is being watched. See Clickwrap Licenses and Informed Consent for a more detailed examination of the need for informed consent in adware installation procedures.

Popping out

In Gator.com v. L.L. Bean, an en banc panel of the 9th Circuit declined to rule on whether a California court can have jurisdiction over an internet and mail-order retailer based in Maine. Gator.com (now Claria) sued for a declaratory injunction that its practices of selling pop-up ads in its adware designed to pop-up over the L.L. Bean website does not violate trademark, copyright and unfair competition law. L.L. Bean moved to dismiss for lack of personal jurisdiction. Gator.com and L.L. Bean settled the trademark, copyright and unfair competition claims, with Gator.com to pay an extra $10,000 if the court ruled against finding personal jurisdiction over L.L. Bean in California. The court found that the dispute was moot and declined to rule on the jurisdictional issue.
Law.com: 9th Circuit: $10K ‘Bet’ Can’t Settle E-Retailer Fight: “In an 8-3 decision Tuesday, judges decided the issue was moot because the parties, Maine-based L.L. Bean Inc. and Gator.com Corp. of Redwood City, Calif., settled after last summer’s oral argument. Gator.com agreed to pay L.L. Bean, but the amount remained under seal at the 9th Circuit.”

Claria EULA gets less clear

Ben Edelman takes a look at the latest version of Claria’s end-user license agreement and finds that the latest changes are, not surprisingly, hostile to consumers: Gator’s EULA Gone Bad: “In 5,900+ words of text, there’s no shortage of space for Gator to describe itself in terms that ordinary users can understand. But a search of the license shows Gator has failed even to mention the words and phrases most users associate with Gator’s products.”
LawMeme’s Jaes Grimmelman writes: Ben Edelman Gives Gator’s EULA the Once-Over

This agreement, whether characterized as a “license” to use Gator’s copyrighted software or a “contract” between you and Gator, is still a manipulative, low-down, dirty, no-good document…. The reasonable trade at the core of many of these agreements–you can use the software, but don’t repackage it and sell it as your own–is going to survive, but under the right circumstances, almost any other term could easily be struck down

Is anti-spyware legislation necessary?

Government Computer News: FTC: Technology, not legislation, needed to fight spyware

l Trade Commission commissioner Orson Swindle said that pending anti-spyware legislation is an election-year effort by Congress to appear to be taking meaningful action against a high-profile problem.
Swindle and Jim Harper, director of information policy studies at the Cato Institute, warned during a Capitol Hill briefing today that premature laws could do more harm than good.

Barbarians at the Digital Gate

NY Times: Barbarians at the Digital Gate

The rapid proliferation of [spyware and adware] has brought Internet use to a stark crossroads, as many consumers now see the Web as a battlefield strewn with land mines.
At the same time, major advertisers and big Internet sites are increasingly tempted by adware’s singular ability to display pop-up ads exactly when a user has shown interest in a particular service or product.

Also: Adware archive

Claria Settles

News.com reports that Claria has settled the pending consolidated litigation: Pop-up purveyor Claria settles suits

Claria, formerly known as Gator, ended a multidistrict litigation case, or combined lawsuit, with Wells Fargo and Quicken Loans on Aug. 7, according to the plaintiffs’ attorney. In recent months, it also has quietly settled with UPS, Hertz, L.L. Bean, Tiger Direct and Six Continents, a Claria representative confirmed.
Terms of the settlements were not disclosed.

Popping Fresh

In Findlaw’s Modern Practice, Jason Allen Cody discusses Pop-Up Ad Litigation Strategy: Forums, Claims and Defenses

Summary of Pop-Up Advertising Cases

Washington Post v. Gator U-Haul v. WhenU.com Wells Fargo v. WhenU.com 1-800 Contacts v. WhenU.com
Date 7/02 9/03 11/03 12/03
Court E.D. Va. E.D. Va. E.D. Mich. S.D.N.Y.
Disposition granted π’s motion for a preliminary injunction granted Δ’s motion for summary judgment denied π’s motion for a preliminary injunction granted π’s motion for a preliminary injunction
Copyright Infringement yes no no no
Trademark Infringement yes no no yes
Trademark Dilution yes no no n/a
Initial Interest Confusion Doctrine no no no. refused to apply yes. pop ups diverted & distracted website consumers
Use in Commerce yes (implied) no no yes
Fair Use no n/a yes. comparative advertising no
Survey Used

yes. indicated 66% consumer confusion, but no analysis as to weight given n/a yes, but unreliable yes. suggested initial interest confusion, but ultimately unreliable

The key difference between the 2003 case where the website owner obtained a preliminary injunction (1-800 Contacts) and the other 2003 cases may not be the result of the choice of forum as the legal theories relied upon and the facts presented to the court in each case.
Note that Wells Fargo relied on the survey evidence prepared for 1-800 Contacts. Even though that survey evidence was not reliable, at least it was prepared for the 1-800 Contacts litigation.
Additionally, 1-800 Contacts sued not only WhenU, but also VisionDirect, who advertised on WhenU. VisionDirect’s cybersquatting on the www1800contacts.com domain name provided an indication that VisionDirect hoped to profit off of consumer confusion with 1-800 Contacts and likely purchased advertising on WhenU in order to place ads over the 1-800 Contacts web site.
Website owners who seek to stop pop-ups should look for examples of behavior by advertisers seeking to profit off of the website and trademark owner’s goodwill.
(via The Trademark Blog)