WhenU Wins Trademark Case on Appeal

WhenU won a legal victory Monday when a circuit appeals court threw out a 2003 trademark infringement decision and injunction against it.

The finding reverses a ruling in a case filed against it by contact lens merchant 1-800 Contacts. The earlier ruling was considered a setback for the adware purveyor and also a source of worry for search engines that allow advertisers to bid on competitors’ trademarks. Google had submitted an amicus brief in the case, urging the dismissal of trademark claims.

“The fact is that WhenU does not need 1-800’s authorization to display a separate window containing an ad any more than Corel would need authorization from Microsoft to display its WordPerfect word processor in a window contemporaneously with a Word word processing window,” wrote Judge John Walker in his decision.

The original case, brought by 1-800 Contacts in 2002, argued WhenU’s delivery of VisionDirect pop-up ads on its Web site meant the competitor had profited from the plaintiff’s brand equity. The legal bid was successful, despite previous rulings to the contrary in Michigan and Virginia. In December 2003, a judge enjoined WhenU from serving ads on 1800contacts.com.

Time will tell whether this week’s reversal will increase advertisers’ willingness to place campaigns with adware purveyors. WhenU CEO Bill Day doubted the ruling would have a broad impact in that regard. “It’s not a slam dunk for anybody in the adware space,” he said. “Some of the ruling very specifically [mentions] WhenU’s practices.”

The court noted that WhenU ads identify their origin and that advertisers aren’t permitted to target by Web site. WhenU’s privacy policy states the company will not collect user data, track clickstream information, maintain a central database of users or engage in user profiling.

“The adware space is still a hot space in terms of a lot of changes going on,” said Day. “WhenU has been very proactive on the best practices front. This allows us to focus on [our business], as opposed to getting caught up arguing about the legality. In an [environment] where we have a lot to do, it simplifies our mission.”