When last we left WhenU.com, it had won a court victory allowing it to serve whatever pop-up ads it wanted on top of U-Haul's website, even those of a competitor. A few more legal victories followed, but now a judge in New York has reversed course.
Judge Deborah Batts issued a preliminary injunction barring the company from serving advertising for VisionDirect.com on top of competitor 1-800 Contacts' (Nasdaq: CTAC ) website.
Because VisionDirect.com's ads appeared after consumers typed 1-800 Contacts' trademarked name into a browser window, Judge Batts said there could be confusion that the ads are "endorsed or licensed by the plaintiff." This is a different tack from previous rulings that WhenU did not violate copyrights or trademarks with its ads.
WhenU and rival Claria (formerly known as Gator) create ad-serving software that is installed on your computer after you download various free programs -- among them, the weather forecaster WeatherCast and the file-sharing software BearShare. Critics refer to these programs as spyware or thiefware because many users have no idea they're on their computers. (I found WeatherCast in my Windows registry earlier this week, even though I've never agreed to install the program.)
Free programs such as Lavasoft's Ad-aware can detect and remove these applications, and both Microsoft's (Nasdaq: MSFT ) MSN and Time Warner's (NYSE: TWX ) AOL are including spyware detection programs in their latest versions.
If the New York case reaches a favorable conclusion for 1-800 Contacts, it could be the chink in WhenU's armor many other companies have been hoping for. As one Internet law expert told The New York Times, Judge Batts' injunction is "at least creating a split in the courts that could make the issue ripe for review by a higher level."
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