U-Haul v. WhenU.com

Citation: U-Haul Int’l, Inc. v. WhenU.com, Inc., 279 F.Supp.2d 723 (E.D. Va. 2003)(full-text).

Factual Background
Defendant distributed a downloadable software program called “SaveNow,” which is typically bundled with other software such as free screensaver programs. During the installation of the software with which SaveNow is distributed, users receive a notice stating that SaveNow is part of the download. To proceed with the installation of SaveNow, consumers must affirmatively agree to a license with defendant, which explains what SaveNow is and how it performs.

The SaveNow software scans the user’s Internet browser activity to determine whether any of the terms, web addresses, or content match the information in defendant’s proprietary directory, which is organized much like a yellow-pages directory. If the software finds a match, it identifies an associated product or service category (e.g., moving). The SaveNow program then determines whether the user’s computer should receive a pop-up advertisement in a WhenU-branded window that is selected at random from defendant’s advertising clients that match the category of the user’s activity. Unlike some other pop-up ad providers, however, defendant did not sell URLs to its advertisers, and did not guarantee to any advertiser that its ad would be shown when a user visited a particular site.

Trial Court Proceedings
U-Haul filed suit for various trademark-related claims, copyright infringement, and assorted other claims. The court granted defendant’s motion for summary judgment on the trademark-related and copyright-infringement claims. Regarding the trademark claims, the court's decision was based primarily on the user’s inviting the pop-up ads by downloading free software from the Internet (much like a computer user invites spam by using e-mail) and on a lack of use in commerce of U-Haul's marks by WhenU.

The court rejected U-Haul's various arguments about how and why WhenU used U-Haul’s marks. First, U-Haul argued that WhenU's pop-up ads are framed by the U-Haul site, but the court held that the pop-up ad was a separate and distinct window from U-Haul’s site. Second, the simultaneous display of the U-Haul mark (on the U-Haul site) and a competitor's mark (on the WhenU pop-up ad) was a function of how applications operate in the Windows environment and not a use of U-Haul’s marks. The court also noted that comparative advertising is permissible, thus suggesting that WhenU’s pop-up ads would not be actionable even if WhenU used U-Haul’s marks.

Third, WhenU's inclusion of the U-Haul URL in its "directory" incorporated into its software is not use of the U-HAUL mark because WhenU uses the URL for its "pure machine-linking function." WhenU in no way advertises or promotes U-Haul's URL or marks, it does not sell the URL to its advertising customers, and WhenU does not display U-Haul's URL or marks to the computer users when the ad pop-ups.

Fourth, WhenU's pop-up ads did not interfere with the use of U-Haul's site by its customers and dealers because WhenU's program did not interact with U-Haul's computer servers or computer system, it did not change the underlying appearance of U-Haul's site, and the computer user made a conscious decision to install WhenU's program. In fact, computer users had the option to decline to accept the license agreement or decline to download the software.

The court dismissed U-Haul’s remaining claims (i.e., misappropriation, interference with prospective business advantage, unjust enrichment, and Virginia Conspiracy Act) without prejudice.

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