Second Circuit Finds No Trademark Infringement in Targeted Internet Advertising Case

Plaintiff 1-800 is a distributor of contact lenses and has a Web site located at www.1800contacts.com, as well as registered service marks for “1-800CONTACTS.” Defendant WhenU is an Internet advertising company that, by means of proprietary software, monitors a computer user's (“C-user”) activity on the Internet and causes pop-up ads related to the C-user's activity to appear on the C-user's desktop. The C-user voluntarily opts to use WhenU's system by downloading WhenU's software to monitor specified browsers.

In addressing the plaintiff's claim of trademark infringement, the Second Circuit first examined whether there was “use” of 1-800's trademarks in commerce in connection with the sale or advertising of goods or services within the meaning of the Lanham Act. The court vacated the district court's preliminary injunction and held that “as a matter of law, WhenU does not 'use' 1-800's trademarks within the meaning of the Lanham Act … when it (1) includes 1-800's website address, which is almost identical to 1-800's trademark, in an unpublished directory of terms that trigger delivery of WhenU's contextually relevant advertising to C-users; or (2) causes separate, branded pop-up ads to appear on a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. … ”