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The 2d U.S. Court of Appeals has rejected a trademark infringement action brought against a company that causes “pop-up” advertisements to appear on a plaintiff’s Web site. A two-judge panel found in 1-800 Contacts Inc. v. WhenU.com, No. 04-0026-cv, that causing pop-up ads, even ads for companies in direct competition with the business of the aggrieved plaintiff, does not amount to a “use” within the meaning of the Lanham Act. The circuit’s decision reverses that of Judge Deborah A. Batts of New York’s southern district, who had granted a preliminary injunction against WhenU.com, an Internet marketing company that uses a propriety software that monitors a computer user’s Internet activity and then delivers advertising compatible with that activity. The case has been closely watched by Internet marketers and retailers, with several companies filing an amicus brief urging that Batts be upheld and others, including Google Inc. and Electronic Frontier Foundation, weighing in with briefs arguing for reversal. Plaintiff 1-800 Contacts sells contact lenses and related products by mail, telephone and over the Internet. It filed suit challenging WhenU.com’s use of software called “SaveNow,” that caused visitors to the 1-800 Contacts Web site to see pop-up ads for a direct competitor, Vision Direct Inc., also a named defendant in the lawsuit. The plaintiff, which had registered the 1-800 Contacts service mark and a specific design logo built around the same name, alleged that causing pop-up ads to appear on its Web site infringed its trademarks in violation of sections 1114(1) and 1125(a)(1) of the Lanham Act. Batts found that the inclusion of 1-800 Contacts’ Web site address in SaveNow’s directory was a “prohibited use” within the meaning of the act. She then turned to the pop-up ads. “WhenU’s advertisements are delivered to a SaveNow user when the user directly accesses Plaintiff’s website-thus allowing Defendant Vision Direct to profit from the goodwill and reputation in Plaintiff’s website that led user to access Plaintiff’s website in the first place,” Batts said. The appeal was decided by Chief Judge John M. Walker Jr. and Judge Chester J. Straub, with the court not only reversing the grant of injunctive relief but also dismissing the trademark claims completely. The court left other claims by 1-800 Contacts intact. Different views of ‘use’ Walker said that two other district courts, in other cases involving WhenU, have reached the opposite conclusion from Batts on the meaning of “use” under the Lanham Act. The Eastern District of Michigan found that inclusion of Wells Fargo’s trademarked Web site address in WhenU’s propriety directory of keywords was not a “use” under the act. And an Eastern District of Virginia judge found that the inclusion of U-Haul’s trademarked Web site address in the SaveNow directory was not a “use” because it was for a “pure machine-linking function.” Walker also noted that WhenU does not reproduce or display 1-800 Contacts’ trademarks “at all.” Instead, he said, it reproduces the Web site address, “which is similar, but not identical,” to the 1-800 Contacts trademark. Moreover, he said, “it is plain that WhenU is using 1-800′s website address precisely because it is a website address, rather than because it bears any resemblance to 1-800′s trademark, because the only place WhenU reproduces the address is in the SaveNow directory”-which is scrambled and therefore inaccessible to the computer user and the general public. Walker said the “fatal flaw” in the district court’s holding was the “acceptance of 1-800′s claim that WhenU’s pop-up ads appear ‘on’ and affect 1-800′s website.”

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