Source: http://www.internetlibrary.com/cases/lib_case335.cfm
Timestamp: 2019-04-18 18:59:19+00:00

Document:
Plaintiff 1-800 Contacts, Inc. is a retailer of replacement contact lenses. It sells these products at its website, located at www.1800contacts.com. It has filed for registration of the mark "1-800 Contacts" which phone number is also used in plaintiff's retailing activities. Defendant Vision Direct, Inc. is a direct competitor of plaintiff, which also sells replacement contact lenses to the public.
SaveNow ads are triggered by the consumer's internet activity. The SaveNow software compares the URLs and search terms the consumer types into his browser with a propriety directory created by SaveNow. If there is a match, the SaveNow software will retrieve a pop-up ad from a server over the Internet, and display it on the consumer's computer. This ad will be displayed in a WhenU branded window that informs the consumer it is a "WhenU offer," and appears on his screen simultaneously with whatever other programs he is operating in other computer "windows." If a consumer seeks additional information as to the source of the ad, a link from the ad takes the consumer to a screen that further explains that the "offer is brought to you by WhenU.com."
The delivered ad is selected from a category of ads into which the typed URL is classified by WhenU. WhenU's clientele can only purchase the right to have their ad included with those that are displayed when a consumer selects a particular information category - they cannot purchase the right to have an ad displayed when a consumer types in a particular domain name, such as that of the plaintiff.
WhenU included plaintiff's domain name 1800Contacts.com in the eye-care category of its proprietary directory. When a consumer typed plaintiff's URL in his browser, the SaveNow program delivered an ad from one of WhenU's clients that had purchased the right to have their ads displayed when a consumer displayed interest in the eye care category, which included plaintiff's competitor Vision Direct.
Objecting to defendants' conduct, plaintiff brought this suit, asserting claims of trademark and copyright infringement, as well as tradename dilution and unfair competition. Plaintiff also asserted a claim under the Anticybersquatting Consumer Protect Act ("ACPA") against defendant Vision Direct, arising out of its registration of the domain name www.www1800contacts.com.
Plaintiff moved for a preliminary injunction, enjoining defendants from continuing to use plaintiff's domain name, www.1800contacts.com, as a trigger for the delivery of pop-up ads. Finding plaintiff likely to prevail on its trademark infringement claim, the court granted plaintiff a preliminary injunction enjoining such use of plaintiff's domain name. At the same time, the court held it was unlikely that plaintiff would prevail on its copyright infringement claims.
"To establish a claim for trademark infringement under the Lanham Act, the plaintiff must show the use in commerce by defendant without consent, of any registered mark in connection with the sale, offering for sale, distribution or advertising of any goods in a way that is likely to cause confusion. 15 U.S.C. §1114(1)(a)."
"A trademark is 'used in commerce' for purposes of the Lanham Act, 'when it issued or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services." 15 U.S.C. §1127.
[B]y causing pop-up advertisements to appear when SaveNow users have specifically attempted to find or access Plaintiff's website, Defendants are "using" Plaintiff's marks that appear on Plaintiff's website. 15 U.S.C. § 1127.
Second, Defendant WhenU.com includes Plaintiff's URL, <www.1800contacts.com>, in the proprietary WhenU.com directory of terms that triggers pop-up advertisements on SaveNow users' computers. (Tr. at 134.) In so doing, Defendant WhenU.com "uses" Plaintiff's mark, by including a version of Plaintiff's 1-800 contacts mark, to advertise and publicize companies that are in direct competition with Plaintiff. Accordingly, the Court finds that Defendants have used plaintiff's mark in commerce.
In reaching this conclusion, the Court rejected defendant WhenU's contention that to use a mark in commerce, the defendant must be using the mark to identify or distinguish products or services. The Court's conclusion was also at odds with the courts in U-Haul Intern, Inc. v. WhenU.Com, 279 F.Supp. 2d 723 (E.D.Va. 2003) and Wells Fargo & Co. v. WhenU., 2003 WL 2280692 (E.D. Mich. 2003) which held that defendant WhenU's activities do not constitute a use of a mark in commerce. Noting this, the court stated that "this Court disagrees with, and is not bound by these findings."
The fact that Defendants' pop-up advertisement for competing Internet contact lenses retailers appears shortly after a consumer types into the browser bar Plaintiff's trademarked name and accesses Plaintiff's homepage increases the likelihood that a consumer might assume Defendants' pop-up advertisements are endorsed or licensed by Plaintiff, since the user will first see the 1-800 Contacts website, with logos and graphics, and then will see the pop-up advertisement.
Even if a consumer who clicked on Defendants' pop-up advertisements and accessed Defendant Vision Direct's website eventually realized prior to purchasing anything - that Vision Direct's website was not related to Plaintiff, the consumer might then proceed to purchase replacement contacts on Vision Direct's website, instead of taking the steps necessary to return to Plaintiff's website.
Applying the eight factor Polaroid test, the court found that consumers were likely, initially, to be confused by defendants' activities, and either believe that defendant Vision Direct's products were associated with, or endorsed by, plaintiff. In reach this result, the court relied on the fact that plaintiff possessed a strong mark, which had been extensively marketed, and which had produced strong sales, that defendant had used plaintiff's mark in it's activities, that defendant Vision Direct was a direct competitor of plaintiff, and that defendants acted in bad faith by linking defendant Vision Direct's ads to its competitor's website.
The court rejected defendant's claim that the branding of its ads as "a WhenU offer," combined with the fact that ads did not contain plaintiff's mark, and the presence of plaintiff's own site on a consumer's computer screen at the same time as the pop-up ad in question, eliminated the possibility of any consumer confusion. While acknowledging that the Second Circuit has "found the use of disclaimers to be an adequate remedy when they are sufficient to avoid substantially the risk of consumer confusion," the court held WhenU's disclaimers inadequate, particularly in light of the applicability of the initial interest confusion doctrine. Again, this conclusion is at odds with the court's decision in Wells Fargo v. WhenU.com, where the court held that the evidence submitted by plaintiff in that case was insufficient to establish that consumers would be confused by defendant's actions or believe that plaintiff was the source of the ads in question. It should be noted that in Wells Fargo, the court did not apply the initial interest confusion doctrine.
Based on the foregoing, the court held that plaintiff was likely to prevail on its trademark infringement claim, and issued a preliminary injunction, enjoining defendant WhenU from using plaintiff's domain name in its directory, or using plaintiff's domain name to trigger the delivery of pop-up ads.
The court also determined that plaintiff was not likely to prevail on its copyright infringement claims. Here, the court's decision is in accord with those of the courts in both Wells Fargo & Co. v. WhenU.com, (E.D. Mich., Nov. 19, 2003) and U-Haul Intl. v. WhenU.com, 279 F.Supp.2d 723 (E.D. Va., Sept. 5, 2003).
The court similarly rejected plaintiff's claim that defendant, by its activities, created a derivative work from plaintiff's copyrighted website. The court reached this conclusion because the computer screen on which defendant's pop-up ad was displayed was not sufficiently fixed to constitute a derivative work. To be a work subject to copyright protection, the work must be "fixed in any tangible medium of expression. . . .". "A work is fixed in a tangible medium of expression . . . when its embodiment . . . is sufficiently permanent or stable, to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration." The court held that defendant's display of pop-up ads did not meet this fixation requirement.
As a result, the court found that plaintiff was not likely to prevail on its copyright infringement claim.
Finally, the court held that plaintiff was likely to prevail on its ACPA claim as a result of defendant Vision Direct's registration of the www.www1800contacts.com domain because it had no intellectual property rights in that name, and had never used it, in business or otherwise. The court accordingly directed Vision Direct to cancel its registration of this domain name.

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