1-800 Contacts, Inc. v. WhenU.com, Inc.
| 1-800 CONTACTS v. WhenU.com | |
|---|---|
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| Court | United States Court of Appeals for the Second Circuit |
| Full case name | '1-800 CONTACTS v. WhenU.com |
| Argued | April 5 2003 |
| Decided | June 27 2005 |
| Citation(s) | 414 F.3d 400 |
| Holding | |
| WhenU's actions did not amount to the "use" that the Lanham Act requires in order to constitute trademark infringement. The appeal court reversed the preliminary injunction and ordered the dismissal of all claims made by 1-800 CONTACTS that were based upon trademark infringement, leaving the claims based upon unfair competition and copyright infringement. The case is remanded to the district court. | |
| Court membership | |
| Judge(s) sitting | John Walker, Chester Straub |
| Case opinions | |
| Majority | John Walker |
| Laws applied | |
| 15 U.S.C. § 1125(a) | |
1-800 CONTACTS v. WhenU.com was a legal dispute beginning in 2002 over pop-up advertisements. It was brought by 1-800 Contacts, an online distributor of various brands of contact lenses against WhenU SaveNow, a maker of advertising software. The suit also named Vision Direct, one of WhenU advertising customers, as a co-defendant. 1-800 CONTACTS alleged that the advertisements provided by WhenU, which advertised competitors of 1-800 CONTACTS (such as Vision Direct) when people viewed the company's web site, were "inherently deceptive" and that one of the advertisements "misleads users into falsely believing the pop-up advertisements supplied by WhenU.com are in actuality advertisements authorized by and originating with the underlying Web site".
Both the plaintiff, 1-800 Contacts, and the co-defendant, Vision Direct, sell and market replacement contacts lenses though their respective websites. The other defendant, WhenU.com was a software company that developed and distributed a software application known as "SaveNow". The SaveNow program, when installed on a users computer, remains resident in memory and observes activity within the user's web browser. It is normally installed as part of a "bundle" of other software programs, and is provided at no cost to the user. Specifically the program contains a directory that match specific URLs or search terms that the user enters into their browser to categories of popup advertisements. Specifically relevant to this case, when the user typed "1800contacts.com" into their browser the SaveNow program would match this to the category "eye-care" and retrieve an ad for a company in this space. At least three types of ads can be presented to the user—small "pop-up" advertisement appearing in the bottom right-hand corner of a user's screen; it may be a "pop-under" advertisement that appears behind the webpage the user initially visited; or it may be a "panoramic" advertisement that stretches across the bottom of the user's computer screen.
Plaintiff argues that it has been harmed by the creation of an "impermissible affiliation between Plaintiff and Defendant", since because of Defendants' pop-up advertising, users "are likely to have the impression that the pop-up advertisements operate in cooperation with, rather than in competition against, the Plaintiff". William D. Neal, an expert for 1-800 Contacts, conducted a study to determine if consumers were likely to be confused as to the source of the popup advertisements displayed by the defendants software. The conclusion of this survey was the 76% of users who had the SaveNow software on their system did not realize that it generated pop-up ads as the result of them visiting specific websites. Additionally, he reported that 60% of people who participated in his survey believed that "pop-up advertisements are placed on the website on which they appear by the owners of that site".
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