WhenU.com’s pop-up advertising software typically comes bundled with free downloadable software. The pop-up advertising software resides on the user’s computer, and has an algorithm that uses the user’s Internet activity to decide what pop-up advertisements should appear.U-Haul, aggrieved by WhenU.com’s display of pop-up advertisements for U-Haul’s competitors on top of U-Haul’s website, sued, claiming trademark and copyright infringement. WhenU.com moved for summary judgment, and the court granted the motion, holding that such pop-up advertising does not infringe U-Haul’s trademarks and copyrights: “WhenU’s pop-up advertisement software resides in individual computers as a result of the invitation and consent of the individual computer user, and thus, the advertisements do not use, alter or interfere with U-Haul’s trademarks and copyrights.”
Trademarks. The court first found that WhenU.com did not use U-Haul’s marks “in commerce,” as is required for a finding of trademark infringement. A trademark is “used in commerce” when it is (1) displayed in connection with the sale or advertising of goods or services, and (2) presented in a manner likely to confuse the consumer. The court reasoned that WhenU.com’s pop-up advertisements did not create a substantial risk of consumer confusion because those ads are separate and distinct from U-Haul’s website. Relatedly, the court held that WhenU.com had not infringed U-Haul’s trademark by using U-Haul’s URL in its algorithm: this use of U-Haul’s trademark did not involve the trademark’s display and therefore did not infringe.
Copyrights. The court found that WhenU.com did not infringe by either displaying a copyrighted work or creating a derivative work. “Display” means to show a copy of the copyrighted work either directly or via some device. The court reasoned that WhenU.com did not “display” U-Haul’s copyrighted material because the pop-up windows are separate from U-Haul’s window, and do not reproduce any of U-Haul’s material. Furthermore, since it is users who call up U-Haul’s website, WhenU.com does not cause the display of U-Haul’s website.
U-Haul argued that WhenU.com modified U-Haul’s website with its pop-up advertisements and created infringing derivative works. The court rejected this argument and held that no derivative work was created because pop-up windows are distinct from the U-Haul website and are transitory occurrences.