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Second Circuit Finds No Trademark Infringement in Targeted Internet Advertising Case
On June 27, 2005, the Second Circuit overturned a lower court's determination that an Internet advertising company's delivery of targeted, contextually relevant pop-up ads constituted trademark infringement. The plaintiff, 1-800 Contacts, Inc. (“1-800″), sued WhenU.com (“WhenU”) for trademark infringement as well as multiple other federal copyright, state infringement, and common law claims. The Second Circuit limited its review of the case to the plaintiff's Lanham Act claim, remanding the rest of 1-800's claims back to the district court.
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of the Lanham Act … when it (1) includes 1-800's website address, which is almost identical to 1-800's trademark, in an unpublished directory of terms that trigger delivery of WhenU's contextually relevant advertising to C-users; or (2) causes separate, branded pop-up ads to appear on a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. … ”
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