Pop-up advertiser cleared of infringement claims

The Eastern District Court of Virginia has dismissed the trademark infringement claims brought by online removal and storage company U-Haul against pop-up advertiser WhenU and its clients (Case 02-1469-A). The court's full opinion, due to be published in several weeks, should shed some light on the legal parameters of the pop-up advertising business.

WhenU's pop-up ads target individual users according to their browsing behaviour on the Internet. Users agree to view the messages in exchange for WhenU's free software. WhenU then displays its clients' ads on competitor websites. When U-Haul became aware that WhenU was placing competitors' ads on its website, it filed an action for trademark infringement and dilution, unfair competition, copyright infringement and contributory copyright infringement.

The court dismissed these claims as well as related claims of misappropriation, interference with prospective business advantage, unjust enrichment and violation of the Virginia Business Conspiracy Act. The court's full opinion, which is due to be published in several weeks, will explain the reasoning behind the decision and shed some light on whether and when pop-up ads are legal.

Similar litigation has been brought by other companies against WhenU and the Gator Corporation - another pop-up advertiser (see Gator bites back in pop-up ads saga and Gator settles one pop-up ad suit, but more waiting in the wings). Such litigation (i) addresses the question of whether such messages constitute an unlawful alteration of third-party websites, and (ii) highlights the conflict between operators of websites and their users regarding how much control each group has over the browsing experience.

Maya Nayak and Ron Dreben, Morgan Lewis & Bockius LLP, Washington DC

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