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ARTICLE: ANALYSIS OF COURT VICTORY FOR POP-UP AD RIGHTS

    This article follows up on the August 2003 Media Law Letter's report on the June 24, 2003, federal court order granting partial summary judgment against U-Haul's lawsuit contesting the technology that enables competitors' pop-up ads to be displayed during visits to U-Haul's Internet sites. The court subsequently filed a detailed opinion on September 5, 2003 that provided the reasons for this partial summary judgment order. The case is U-Haul International, Inc., v. WhenU.com, Inc., et al. Civ. Act. No.02-1469-A (E.D. Va.) (Judge Gerald Bruce Lee). The case is available on Lexis (2003 U.S. Dist. LEXIS 15710) and Westlaw, and likely will be published soon in the Federal Supplement reporter by West publishing.

    U-Haul's complaint alleged copyright and trademark infringement, and trademark dilution, due to pop-up ads appearing during visits to Internet pages that contain U-Haul's intellectual property. The lawsuit also alleged unfair competition for allegedly misleading the plaintiff's visitors that U-Haul has a contractual relationship with the competitors that appear on the pop-up ads. U-Haul further alleged misappropriation of advertising content and interference with prospective economic advantage, and unjust enrichment. Finally, U-Haul alleged a violation of Virginia's Business Conspiracy Act, claiming that WhenU.com's pop-up ads amounted to a scheme to willfully and maliciously injure U-Haul's business.

    The trial court had little problem in finding against U-Haul. About the only concession the court would make to U-Haul was to confirm repeatedly how annoying pop-up ads are to computer users: "Alas, we computer users must endure pop-up advertising along with her ugly brother unsolicited bulk email, 'spam', as a burden of using the Internet."

    The judge conceded that his ruling was made despite his own frustrations with pop-up ads: "Computer users, like this trial judge, may wonder what we have done to warrant the punishment of seizure of our computer screens by pop-up advertisements for secret web cameras, insurance, travel values, and fad diets. Did we unwittingly sign up for incessant advertisements that require us to click, click, and click again in order to return to our Internet work?" However, the court pointed out that computer users bear the blame for enabling pop-up ads, because pop-up software gets onto users' computers by the users' consent through loading and downloading software that piggybacks pop-up software. The implication is that computer users would know in advance they were downloading pop-up software if only they would read the computerized user agreements that one must ordinarily approve before installing software on a computer.

    The court framed the problem in this case as follows, but was at a loss to find any grounds to provide legal relief to U-Haul:

    "The average computer user who conducts a web search for the U-Haul website would expect the U-Haul website to appear on their computer screen; however, in this case, the computer screen fills with the advertisement of the U-Haul competitor. The user must then click and close the pop-up advertisement window in order to get to their destination, the U-Haul website."

    The court dismissed U-Haul's claims of trademark infringement, unfair competition, and trademark dilution by pointing out that the pop-up windows themselves contained no U-Haul trademarks. In fact, the pop-ups contained promotions for U-Haul's competitors. The court confirmed that the legal question was whether the trademark appeared on the pop-up window, and not whether other portions of a computer user's screen showed the U-Haul trademark.

    The court further found that neither did the pop-up ads unfairly use U-Haul's trademarks by juxtaposing the U-Haul site content against the pop-up window content. The court confirmed that businesses are permitted to use their competitors' trade names in comparative advertising, and favorably cited a federal case permitting advertising and packaging proclaiming "If You Like ESTEE LAUDER ... You'll Love BEAUTY USA."

    Further, said the court, WhenU was permitted to use U-Haul's uniform resource locator (URL) in enabling a competitors' pop-up ad. This activity did not involve "use" when it comes to unfair "use" of trademarks, where WhenU did not sell the U-Haul URL to its customers, and did not display the U-Haul name or URL in its pop-up ads.

    The court found that WhenU was not cybersquatting on U-Haul's trademark, particularly where the pop-up software "resides within the user's computer and does not interact or communicate with U-Haul's website, its computer servers, or its computer systems." The court was convinced that the software that enabled the WhenU pop-up ads is "no different than an e-mail system that pops a window when the registered user receives a new e-mail message."

    The court also rejected U-Haul's claims of copyright infringement. The pop-up ads do not copy U-Haul's work, the court found, and "a pop-up advertisement is not a derivative of a copyrighted work."

    Finally, the court re-confirmed from its June 24, 2003, order that it would permit U-Haul to re-file its claims of misappropriation, interference with prospective economic advantage, unjust enrichment, and violation of Virginia's Business Conspiracy Ac, with U-Haul having responsibility to pay the defendants' legal fees in the event of refiling the foregoing counts.

    The sole plaintiff, U-Haul International, was represented by Richmond's Sands, Anderson, et al. The defendants are WhenU.com, which is the company that provides the pop-up technology; Avi Naider; Budget Rent A Car; Moversbay.com; Door to Door Storage; and Conducive Corporation. The defense lawyers were Hale and Dorr, LLP; Lutzker & Lutzker, LLP; Arent, Fox, et al.; Christian & Barton, LLP; Kilpatrick Stockton, LLP; and Venable, Baetjer & Howard, LLP.

NOTE: This article appeared, in edited format, in the October 2003 Media Law Letter of the Media Law Resource Center, to which Jon Katz belongs. Jon is on the Media Law Letter Committee. JON KATZ, P.C., maintains the copyright to this article, and the MLRC maintains authorization for reprinting the article. 

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