WhenU Wins Victory in Pop-Up Case

Gretchen Gallen
NEW YORK – In one of the most important rulings on targeted Internet advertising to date, a U.S. Court of Appeals reversed a decision issued a year ago against controversial adware maker WhenU, determining that the company did not violate trademarks of 1-800 Contacts through the distribution of pop-up advertisements on its site.

"The fact is that WhenU does not need 1-800's authorization to display a separate window containing an ad any more than Corel would need authorization from Microsoft to display its WordPerfect word processor in a window contemporaneously with a Word word-processing window," wrote Judge John Walker in the decision.

A year ago, the U.S. District Court in New York issued a preliminary injunction barring WhenU from presenting website visitors on the 1-800 Contacts website with pop-up ads from competing companies. At the time, the judge determined that WhenU’s action violated the Lanham Copyright Act, and that the company created brand name confusion among website visitors

But Walker decided that WhenU's targeted delivery of advertisements does not constitute trademark infringement, and he distinguished WhenU's pop-up conduct from that of its competitors, noting that WhenU brands its ads prominently, does not disclose the proprietary contents of its directory and does not permit advertisers to pay for theirs ads to appear on specific websites.

"We could not have asked for a better decision," WhenU CEO Bill Day said. "This ruling closes the book on any lingering doubts that advertisers may have had about this technology. It's clear that the consumer owns the desktop, and our sole focus is to lead the way in best practices and enhance the consumer experience so that more and more consumers want to take advantage of our competitive advertising and comparison shopping technology."

WhenU is no stranger to similar lawsuits regarding its controversial method of advertising. Over the past year, the adware maker has been involved in similar trademark infringement battles with Wells Fargo, U-Haul, Weight Watchers, Quicken Loans and Overstock.com.

The company sends out ads bundled with a free screensaver to an estimated 25 million users and claims that all WhenU products are installed with the explicit permission of the consumer and are clearly branded and easily uninstalled. All products also come with WhenU's privacy guarantee, which states that the company does not track user data, use cookies that track user's online behavior, collect clickstream data, maintain a centralized database of users or engage in any type of user profiling.

In May of last year, WhenU found itself yanked from the search results of both Google and Yahoo after the two search giants determined that WhenU was using a “cloaking” method to drive traffic to its site and other websites that contained favorable impressions of the much-maligned adware company.

WhenU’s tactics were first reported to the two search engines by Ben Edelman, a Harvard Ph.D and spyware specialist, who discovered that WhenU had generated a ring of 13 websites designed to re-direct traffic to news and information that was favorable to its image, in hopes of making the impression that the company was performing an ethical and legal service to Internet users.