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Judge rules in favor of pop-up purveyor

Last modified: November 19, 2003, 4:00 PM PST
By Stefanie Olsen
Staff Writer, CNET News.com

A federal court judge dismissed Wells Fargo's motion to block a software maker that launches rival pop-up advertisements when customers access the bank's Web site.

Judge Nancy Edmunds of the U.S. District Court of Michigan's Southern Division on Wednesday denied Wells Fargo's motion for a preliminary injunction against WhenU, a distributor of free advertising software, that was aimed at disarming the pop-up purveyor. The judge also issued a memorandum opinion on the case.

Wells Fargo and plaintiff Quicken Loans charged that WhenU violated their copyrights and trademarks by delivering ads for rival Web sites to consumers while they were visiting their own sites.

"The fact that some WhenU advertisements appear on a computer screen at the same time (the) plaintiffs' Web pages are visible in a separate window does not constitute a use in commerce of the plaintiffs' marks," Judge Edmunds wrote as one of the arguments against an injunction.

While only a preliminary opinion, it echoes an earlier judgment in favor of WhenU in its case against U-Haul International. Like Wells Fargo and a handful of other litigants, U-Haul had charged WhenU with trademark and copyright violations, among other complaints, as a result of pop-ups for competing movers that appeared on U-Haul's Web pages. In September, a Virginia U.S. District Court judge granted a motion for summary judgment in favor of WhenU.

WhenU makes software that tracks the movement of Web surfers and serves up targeted ads to those who are likely to make a purchase. For example, an ad for travel site Priceline.com might appear while a surfer is visiting Travelocity.com. The software is bundled with other popular downloads, such as peer-to-peer software BearShare or weather applications, that consumers use for free by agreeing to receive occasional ads. About 30 million Net users have WhenU's software on their desktops.

"The fact is that the computer user consented to this detour when the user downloaded WhenU's computer software," the judge's summary read. "While pop-up advertising may crowd out the U-Haul advertisement screen through a separate window, this act is not trademark or copyright infringement, or unfair competition."

These decisions could add up to approval for a controversial sector of online advertising--and lend a hand in a more well-known case that involves "adware" company Claria, formerly Gator. Like WhenU, Claria develops an Internet "helper" application that often comes bundled with popular free software such as peer-to-peer applications. When downloaded, the programs from Claria and WhenU serve pop-up and pop-under ads to people at various times while they're surfing the Web or when they visit specific sites.

Gator's software has landed it in court against The Washington Post, catalog retailer L.L. Bean and hotel chain Extended Stay America. In February, Gator settled a case brought by The Washington Post, and its other lawsuits have been consolidated and will be decided by the Judicial Panel on Multidistrict Litigation in Washington, D.C.

Wells Fargo characterized the decision as "a set back" for consumers.
"This form of advertising can create confusion for impacted customers who visit financial sites and believe the offers they are receiving are from that financial institution," according to a Wells Fargo representative. "The source of these pop-up advertisements may not always be clear to the customer. It's important for customers to know who they are dealing with online, and we took action to eliminate this source of confusion for our customers."

A court date has yet to be set in the Wells Fargo vs. WhenU case.

Gator and Claria can go to hell.
With love, of course.