Pop-Up Ad Foes Go to Court

WASHINGTON -- Vendors of pop-up ads, already impeded by popular blocking tools, are finding themselves battling in court as well.

After a string of legal victories against lawsuits, a federal judge has sided against pop-up ad companies in a pending lawsuit. Its outcome could force advertisers to find different technology to reach their audience.

Trademark Claim

Late last year, Internet contact lens retailer 1-800 Contacts sued the advertising company WhenU.com for trademark infringement, among other things. The contact lens site objected to ads that WhenU.com's software caused to pop up when visitors landed on 1-800 Contacts.

One of the advertisement windows that popped up was for VisionDirect, a rival Internet contact lens retailer. VisionDirect paid WhenU.com for the ad to appear. 1-800 Contacts also sued VisionDirect, claiming cybersquatting.

Late last year, U.S. District Judge Deborah Batts, in the Southern District of New York, granted the request by 1-800 Contacts for an injunction against the pop-up ads. The action effectively bans the use of pop-up ads on the 1-800 Contacts Web site until the lawsuit against WhenU.com is decided.

WhenU.com has already filed an appeal to reverse the injunction granted to 1-800 Contacts. The case is still pending and expected to go to trial.

In its case, attorneys for 1-800 Contacts invoked the Lanham Act, which says trademarked materials that a manufacturer uses to identify goods are that manufacturer's property. Others can't use the trademark in a way that causes confusion.

When the ad for VisionDirect popped up onto 1-800 Contacts' site, it violated trademark law, 1-800 Contacts argues in its court filings. Customers viewing the pop-up ads may become confused, believing 1-800 Contacts is supplying the ad and endorsing its rival's products.

Other Cases

WhenU.com defends its practice, noting that its ads appear only if the user has taken the active step of downloading SaveNow adware. Often, software like SaveNow is bundled with other downloadable applications, so some users are unaware they've also downloaded advertisements. The ads are sometimes triggered when the user takes certain action--such as visiting a competitor's site.

WhenU.com has defended its business in court before. Uhaul International sued the pop-up vendor last September, also citing trademark infringement. But a Virginia court ruled against Uhaul, saying users had knowingly downloaded WhenU.com's software, which displayed the advertisements in accordance with the user agreement. The court also noted that the multitasking nature of Microsoft Windows enables users to control the operating environment and close popped-up windows if they choose.

In November, a judge in the U.S. District Court for the Eastern District of Michigan denied a similar injunction request by Wells Fargo. Judge Nancy Edmunds ruled that WhenU.com hadn't violated trademark laws and that the pop-up ads didn't obstruct users from viewing Wells Fargo's site.

If the court can't stop the ads, pop-up blocking software remains an alternative, the courts have noted. Blocking ads has become an industry unto itself, with numerous ad obstruction tools available. However, online advertising firms aren't succumbing; they're developing new types of online ads for the next round of challenges.

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