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Derived from Dot Com Disclosures: Information About Online Advertising [TEXT] [PDF]
The FTC Act's prohibition on "unfair or deceptive acts or practices" broadly covers
advertising claims, marketing and promotional activities, and sales practices in general. The Act is not limited to any particular medium. Accordingly, the Commission's role in protecting consumers from unfair or deceptive acts or practices encompasses advertising, marketing, and sales online, as well as the same activities in print, television, telephone and radio. Indeed, since 1994, the Commission has brought over 100 law enforcement actions to stop fraud and deception online and is working to educate businesses about their legal obligations and consumers about their rights.
For certain industries or subject areas, the Commission issues rules and guides. Rules prohibit specific acts or practices that the Commission has found to be unfair or deceptive. Guides help businesses in their efforts to comply with the law by providing examples or direction on how to avoid unfair or deceptive acts or practices. Many rules and guides address claims about products or services or advertising in general and are not limited to any particular medium used to disseminate those claims or advertising. Therefore, the plain language of many rules and guides applies to claims made on the Internet. For example, the Mail or Telephone Order Merchandise Rule, which addresses the sale of merchandise that is ordered by mail, telephone, facsimile or computer, applies to those sales regardless of "the method used to solicit the order." Solicitations made in print, on the telephone, radio, TV or online naturally fall within the Rule's scope. In addition, the Guides Concerning the Use of Endorsements and Testimonials in Advertising apply to endorsements, which are defined as "any advertising message . . . [that] consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser." The Guides refer to advertising without limiting the media in which it is disseminated, and therefore, encompass online ads.
Pop Up Ad Cases
There are three closely related sets of cases that involve the use of trademark keywords to direct internet users to competitors online content. These involve
- Metatags (trademarks used to manipulate search results),
- Keywords (trademarks used to display advertisements), and
- Pop-Up Ads (trademarks used to trigger pop-up ads).
In the Pop Cases, plaintiff website owners have sought to fight defendant adware companies by arguing that the popup ads constitute trademark violations. Plaintiffs argue that the popup ads are keyed off of trademark keywords. When, for instance, an individual on the Internet goes to the Washington Post, the trademark term "Washington Post" is in the adware database and triggers the adware to display a popup ad for a competing media source such as The Onion.
In resolving these cases, the courts have generally considered the following factors: trademark law and initial interest confusion, the fact that the adware program is a program voluntarily downloaded by the computer user, the fact that the popup ad makes no alteration or change to the underlying website, and that the popup ad makes no use of the trademark term. The courts, however, are split with regard to outcome.
- District Court
- Newsweek Interactive Co., LLC, et al. v. The Gator Corp. , 2002 WL 32153438 (E.D. Va. 2002) (Phillip Nizer) (Findlaw copy of order
 ) (defendant reportedly distributed adware which would cause pop-up ads to appear which displayed third party advertisements; court enjoined defendant from causing its pop up ads to be displayed on plaintiff's websites without consent of plaintiffs, or altering plaintiffs' websites in any way) Gator, now known as Claria Corp, reportedly subsequently settled this suit, and others, out of court. IPFrontline; Pop Goes the Trademark
- WhenU Cases WhenU reported distributed adware that produced pop-up ads based on individual's Internet activity, search terms, and web addresses, where Pop up ads was labeled as produced by WhenU program SaveNow and not by any website individual might be visiting.
- 1-800 Contacts, Inc. v. WhenU.Com and Vision Direct, Inc. , 309 F. Supp. 2d 467 (S.D.N.Y. 2003) rvsrd 414 F.3d 400 (2d Cir. 2005) cert denied (S.Ct) (circuit court reversed lower courts injunction, finding that Popup ads appeared in a separate window, popup ads did not display trademark of plaintiffs, popup ads did not divert individuals from plaintiff's website, and WhenUs software was voluntarily downloaded by computer user. Court noted that Whenu triggered ads based on URLs which are not the same thing as trademarks, and any use of trademarks was internal, not exposing consumers to confusion)
- U Haul Int'l, Inc. v. WhenU.com, Inc. , 279 F. Supp. 2d 723 (E.D.Va. 2003) (dismissing case, noting that the computer user consented to the appearance of WhenU's pop up ads when the user downloaded the WhenU software, "under the circumstances, while pop-up advertising may crowd out the U-Haul's advertisement screen through a separate window, this act is not trademark or copyright infringement, or unfair competition." The court noted that the WhenU ads were in a fully separate window from plaintiffs; and WhenU's ads did not include plaintiffs trademark)
- Wells Fargo & Co. v. WhenU.com, 293 F. Supp. 2d 734 (E.D. Mich. 2003) (dismissing case, with findings consistent with the Virginia court, also stating "SaveNow interacts only with the web servers of WhenU or WhenU’s advertisers. It has nothing to do with plaintiffs’ web servers. As plaintiffs’ own expert acknowledged, SaveNow cannot and does not access the servers where plaintiffs’ websites are physically located." Court found that defendant did not modify plaintiffs' websites. Court also noted that plaintiff Quicken had a division that was using WhenU for advertising)
See also
Law
- 15 USC § 45
- Lanham Act / Trademark
- 18 USC § 2252C Misleading Words or Digital Images on the Internet (enacted as a part of the Adam Walsh Child Protection and Safety Act Sec. 703, Pub. L. 109-248)
- (a) In General - Whoever knowingly embeds words or digital images into the source code of a website with the intent to deceive a person into viewing material constituting obscenity shall be fined under this title and imprisoned for not more than 10 years.
- (b) Minors - Whoever knowingly embeds words or digital images into the source code of a website with the intent to deceive a minor into viewing material harmful to minors on the Internet shall be fined under this title and imprisoned for not more than 20 years.
- (d)(2) Definitions - the term 'source code' means the combination of test and other characters comprising the content, both viewable and non viewable, of a web page, including any website publishing language, programming language, protocol or functional content, as well as any successor languages or protocols.
Caselaw
- FTC
- In re Interstate Bakeries Corp., Docket No C-4042 (FTC Apr 16, 2002) (applying existing advertising law to online advertisements) (Complaint)
Federal Activity
Papers
Links
News
- Comparative keyword ads OK in Utah, Google 3/10/2008
- Net advertiser self-regulation falling short, Globe and Mail 11/5/2007
- Google's Motion to Dismiss American Airlines' Lawsuit Denied, Tech & Marketing Law 10/26/2007
- S & L Vitamins, Inc. v. Australian Gold, Inc., 2:2005cv01217 (EDNY Sept 30, 2007), Justia 10/18/2007
- The FTC's close look at online advertising, Google 9/18/2007
- More Misplaced Google Ad Lawsuits... This Time In Australia, Techdirt 9/12/2007
- Stealth Trademarks: Ad Keywords, Cybertelecom 7/10/2007
- Google Subpoenaed for Keyword Purchase Data--Rhino Sports v. Sport Court, Technology & Marketing Law Blog 7/10/2007
- Google To Pay Nothing in Keyword 'Sucker's Bet', Internet news 9/4/2007
- American Blinds Realizes That It Was About To Lose Google Keyword Ad Suit, Techdirt 9/4/2007
- Link by Link: Whiting Out the Ads, but at What Cost?, NYT 9/4/2007
- American Blinds-Google Lawsuit Settles, Tech & Marketing Law 9/4/2007
- Google's Keyword Ads Don't Fly With American, Ecommerce Times 8/21/2007
- A look at the American Airlines v. Google suit, Internet Cases 8/21/2007
- Utah Tries To Ban Keyword Advertising On Trademarked Terms, Techdirt 4/5/2007
- Utah Bans Keyword Advertising, Technology & Marketing Law Blog 4/5/2007
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