Internet Library of Law
and Court Decisions

U-Haul International Inc. v. WhenU.com, Inc.

Court grants defendants' motion for summary judgment, and dismisses trademark infringement, copyright infringement and unfair competition claims brought by website owner against distributor of pop-up ads.  Defendants distribute a software program, which causes pop-up ads to be displayed on a user's computer screen in a window that covers all or part of plaintiff's website.  The court held that such conduct does not constitute a use of plaintiff's trademark, a prerequisite to a trademark infringement claim.  Quite the contrary, the display results from the computer user's consensual download of defendants' software, and his ability to control, via the multitasking capabilities of window's operating environment, what appears on his own computer screen.  Similarly, defendants' acts do not infringe plaintiff's copyright in the material that appears on plaintiff's website, because defendants neither display plaintiff's copyrighted materials nor make a derivative work thereof.  Defendants' ads instead appear in a separate window on a user's computer screen, which operates independently of plaintiff's website, and leaves the content appearing thereon untouched.

Plaintiff is the owner of the trademark "Uhaul," and operates a website at Uhaul.com.  Defendant WhenU.com, Inc. ("WhenU") is the distributor of a software program "SaveNow" that is typically "bundled" with 'free' software programs available on the 'net, such as screen savers.  When a user downloads one of these 'free' programs, he consents to the installation of the SaveNow program onto his computer, typically in a license agreement that accompanies the free software he wants to download.  After such consent is procured, the SaveNow program is downloaded to his computer.

SaveNow tracks the user's Internet activities, to determine whether any of the domain names of the sites he visits or search terms he types in match terms in a 'directory' it maintains.  If such a match is found, the SaveNow program determines if the user's computer should receive a pop-up ad and, if so, supplies the user with an advertisement selected at random from the product or service category to which the term is related.  This pop-up advertisement appears in a separate WhenU branded window that opens on the user's computer, which window is displayed on top of all other windows the user then has open.  WhenU does not guarantee to any advertiser that its particular ad will be shown when a consumer visits a particular web site or URL.

Upset with defendants' actions, plaintiff commenced this suit, charging WhenU, inter alia, with trademark infringement, trademark dilution, copyright infringement and unfair competition.  On defendants' motion for summary judgment, the Court dismissed plaintiff's trademark and copyright infringement claims.

"A fundamental prerequisite for claims of trademark infringement pursuant to 15 U.S.C. Section 1114 and of unfair competition pursuant to 15 U.S.C. Section 1125(a) is proof that the defendant used one of the plaintiff's protected marks in commerce.  A mark is 'used in commerce' in connection with goods when the mark is 'placed in any manner on the goods or their containers or the displays associated therewith or on  the tags or labels affixed thereto … or on the documents associated with the goods or their sale.'  15 U.S.C. Section 1127.  A mark is 'used in commerce' in connection with services when the mark is 'used or displayed in the sale or advertising of services and the services are rendered in commerce …'.  236 F. 3d at 364."

The court rejected plaintiff's trademark infringement claim because it found that WhenU was not using plaintiff's trademark in commerce.  In reaching this conclusion, the court rejected plaintiff's claim that the appearance of a WhenU pop-up ad in a window that appeared over, and at the same time, as the Uhaul website, constituted a use of the "Uhaul" mark in commerce sufficient to sustain a trademark infringement claim.  Rather, "the appearance of WhenU's ads on a user's computer screen at the same time as the U-Haul web page is a result of how applications operate in the Windows environment and does not constitute 'use' pursuant to the Lanham Act."  This is a function of "the Microsoft Windows environment, [in which] each program that the user launches generally appears on a separate window on the user's computer screen. …[In this operating environment] the computer user may have multiple windows open at once…."

The Court's conclusion was also supported by its finding that defendants' activity did not interfere with the operation of plaintiff's site.

The Court also rejected plaintiff's claim that the inclusion of the Uhaul domain name within SaveNow's directory was a use in commerce sufficient to sustain a trademark infringement claim.

The absence of a use of the mark in commerce similarly mandated dismissal of plaintiff's trademark dilution claim, because use of the mark in commerce is a prerequisite to such a claim as well.

Finally, the Court rejected plaintiff's copyright infringement claims.  Plaintiff claimed that, by its actions, WhenU infringed Uhaul's exclusive rights to display and make derivative works of the copyrighted materials found on its website.  The Court rejected this claim, finding that WhenU neither displays, nor alters, Uhaul's website, or the copyrighted material thereon.  Said the Court:

The Windows environment permits a user to open multiple applications and windows at the same time, with the different windows overlapping one another.  WhenU's ad is merely another window on the user's computer desktop.  The pop-up ad may modify the user's computer display; however, this modification does not constitute copyright infringement.  To conclude otherwise is untenable in light of the fact that the user is the one who controls how items are displayed on the computer, and computer users would infringe copyrighted works any time they opened a window in front of a copyrighted Web page that is simultaneously open in a separate window on their computer screens.  This conclusion is contrary to both law and fact.

The Court accordingly dismissed plaintiff's copyright infringement claims.