Gator settles one pop-up ad suit, but more waiting in the wings

Some of the largest news publishers in the United States have settled a federal action in a dispute over the infamous Gator pop-up advertisements, just prior to the case coming to trial. The parent companies of The New York Times, USA Today, The Wall Street Journal and The Washington Post, and the digital divisions of Knight Ridder and Condé Nast, are among several news outlets that settled with Gator, although the terms of the settlement remain confidential.

Gator delivers pop-up and pop-under ads to millions of people who agree to receive them in exchange for use of its free software. The ads appear while users are browsing websites, usually that deal with similar subject matter, and will sometimes obscure existing banner ads on the target website. The plaintiffs claimed that the ads constitute copyright infringement, trademark infringement and interference with their advertisers' online presence.

A US federal court had earlier issued a preliminary injunction against Gator in this case, reasoning that the company was involved in the making of an unauthorized derivative work. However, it is likely that the decision to grant the injunction was also strongly influenced by the consideration that Gator's practice of ambush advertising constitutes unfair competition.

This settlement does not end the matter, as there are pending lawsuits against Gator brought by other companies unhappy that clients who have paid for advertising space on their websites are forced to compete with unauthorized Gator-placed ads. In the end, Gator may have to change its strategy and technology, which may be no bad thing considering the growing unpopularity and questionable legal position of pop-up ads.

Steven M Weinberg, Greenberg Traurig LLP, Phoenix