Pop-up Advertisement Vendor WhenU.Com Enjoined

Contact lens vendor 1-800 Contacts was granted a preliminary injunction against pop-up advertisement vendor WhenU.com and competing lens merchant Vision Direct on December 22, 2003, in the Southern District of New York. Vision Direct had contracted with WhenU.com to display windows with competing advertisements to users visiting the 1-800 Contacts web site. Although the advertisements were not authorized by 1-800 Contacts, the plaintiff presented data that showed that users believed the pop-ups to be part of the main website. It set forth ten legal theories, including trademark infringement, trademark dilution, copyright infringement, and cybersquatting.The court dismissed the copyright infringement argument. 1-800 Contacts had argued that WhenU.com had “recast” or “transformed” its website by displaying pop-up advertisements on top of the website, creating a derivative work in violation of its copyright. This theory was rejected, as the court found that a mere arrangement of windows was not “fixed in a tangible medium” and therefore not subject to copyright law. 1-800 Contacts had an alternate theory, that users violated its “display right” when they displayed the website in conjunction with the pop-up advertisements, and WhenU.com contributed to this copyright infringement. The court found that such a broad display right would be incompatible with modern operating systems, which allow users to rearrange windows at will.

However, the court agreed with their trademark infringement argument. It found that the defendants used the “1-800 Contacts” trademark to advertise a competitor’s services by causing advertisements for Vision Direct to appear when users had “specifically attempted” to access the 1-800 Contacts website. It also found that WhenU.com used the trademark in the software’s internal database of advertisements. Although the user might not see this use of the advertisement, the court found that this occurrence of the trademark was a “use” under the Latham Act because it caused the advertisement to be displayed to users of the 1-800 Contacts website. The court distinguished an earlier, unrelated case by noting that the defendants did more than display 1-800 Contacts’ trademark. The court also distinguished two earlier decisions in WhenU.com’s favor by stating that it disagreed with those courts’ findings. The second aspect of trademark infringement is a finding that customers are likely to be confused by the use of the trademark. 1-800 Contacts showed this by arguing that customers who clicked on the Vision Direct advertisement, thinking that the advertisement was sponsored by 1-800 Contacts, were likely to purchase contact lenses from Vision Direct even after they realized that the two companies were unaffiliated. The third prong of infringement weighs the likelihood of confusion, and here the court found for 1-800 Contacts, due to a finding of bad faith on the part of WhenU.com and Vision Direct. The court issued a preliminary injunction against both WhenU.com and Vision Direct. It required the defendants’ pop-up advertisements on 1-800 Contacts’ website to cease, and it required that WhenU.com no longer index advertisements on the 1-800 Contacts name.

The court also allowed the cybersquatting claim. Direct Vision had registered the “www1800contacts.com” domain name, so that users mistyping “www.1800contacts.com” without the first period would be directed to the competitor’s website. The court found that the website addresses were insignificantly different and that Direct Vision had acted in bad faith. It ordered Direct Vision to relinquish the web site.