Behavioral Targeting, Interest Based Advertising and the Trademark Infringement Laws

The day of behavioral targeting is upon us. In 2005 the Second Circuit, Federal Court of Appeals found that use of trademarks in Internet advertising is not “use in commerce” for purposes of the Lanham Act; thereby upholding the use of trademarks to trigger the competitive use of pop-up ads. This week I received a notice from Google advising me to update my privacy policy:


Interest-based advertising will allow advertisers to show ads based on a user’s previous interactions with them, such as visits to advertiser website and also to reach users based on their interests (e.g. “sports enthusiast”).  To develop interest categories, we will recognize the types of web pages users visit throughout the Google content network.  As an example, if they visit a number of sports pages, we will add them to the “sports enthusiast” interest category.


 The one time problem, now cleared by this court, was that the process of data collection had the potential of violating the trademark laws. The “competitors” (competing advertisers (through Google in this example)) use information collected concerning our web-browsing behavior and then select the ads to display on our screen. This ability offers an advantage to the savvy marketer. But, are we, the computer user (c-user), being improperly influenced? Do we really want to be led around by someone else’s algorithm? Let’s say you look up McDonald’s hamburgers and you get a pop-up for Angus. Hopefully, you get the idea.


Take a look at this interesting overview of the internet and windows as related in 1-800 Contacts, Inc. v., Inc., 414 F.3d 400 (2nd Cir. 2005), cert. denied,126 S.C.t. 749 (2005). The primary issue in this litigation was “. . . whether the placement of pop-up ads on a C-user’s screen contemporaneously with either the 1-800 website or a list of search results obtained by the C-user’s input of the 1-800 website address constitutes “use” under the Lanham Act  . . .” The description of the internet and windows is noteworthy for its simplicity. By setting up basic ground rules the court has effectively eliminated another pointless black hat, white hat, hacking debate while drilling into the foundation of marketing on the web and the foundation to view trademark laws in this context. It could be worth a review. Here it is:


The Internet and Windows

By way of introduction to this case we incorporate the district court’s helpful tutorial on the internet and the Microsoft Windows operating environment as it pertains to this litigation: The Internet is a global network of millions of interconnected computers. . . . [A C-user] can access . . . information that is stored on the Internet in repositories called “servers.” Much of the information stored in servers on the Internet can be viewed . . . in the form of “webpages,” which are collections of pictures and information, retrieved from the Internet and assembled on the [C-user]’s computer screen. “Websites” are collection[s] of [related] webpages that are organized and linked together to allow a [C-user] to move from webpage to webpage easily. . . . [A C-user] generally connects to the Internet using an internet service provider (“ISP”) . . ., which allows the [C-user]’s computer to communicate with the Internet. Once a connection to the Internet has been established . . ., a [C-user] may “browse” or “surf” the Internet by using a software program called an Internet browser (“browser”). Microsoft Internet Explorer is one example of a browser program. . . .  Examples of ISPs include Earthlink, Verizon, NetZero, America Online.  Other examples of browser programs include Netscape Navigator, Opera, and Mozilla; in addition, many residential ISPs like Earthlink and America Online provide their own proprietary browsers. To retrieve information from the Internet, a [C-user] may type [a specific] address [, called a domain name,] of a website into the [address line of a] web browser. . . . Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc.,202 F.3d 489, 492-93 (2d Cir. 2000) [providing detailed explanation of domain names]. . . . . [Alternatively,] . . . a [C-user] can use [a “search engine”] to find information [by] . . . typ[ing] in a word or words describing what is sought, and the search engine will identify websites and webpages that contain those words. 1-800 Contacts, 309 F.Supp.2d at 474-75 (internal citations and some footnotes omitted). The district court further explained that [m]any [C-users] access the Internet with computers that use the Microsoft Windows operating system (“Windows”). Windows allows a [C-user] to work in numerous software applications simultaneously. In Windows, the background screen is called the “desktop.” When a software program is launched, a “window” appears on the desktop, within which the functions of that program are displayed and operate. A [C-user] may open multiple windows simultaneously, allowing the [C-user] to launch and use more than one software application at the same time. Individual windows may be moved around the desktop, and because the computer screen is two-dimensional, one window may obscure another window, thus appearing to be “in front of” another window. Id. at 475 (internal citations omitted). Some programs on a C-user’s computer, such as a calendar or e-mail application, may cause windows to open on the C-user’s desktop independently of any contemporaneous action by the C-user. See Wells Fargo & Co. v., Inc., 293 F.Supp.2d 734, 743, (E.D.Mich. 2003); see generally id. at 740-43 (providing in-depth description of how software applications and web browsers operate in the Windows environment, and noting that Windows is currently used on approximately 95% of personal computers).


This is the infrastructure of the web as viewed by a court in deciding a trademark infringement claim. So, what basically happens is that a software package on one window gathers your web surfing data, crunches it, matches it with their database of similar but competing goods and services, and then gives you a pop-up ad on another window for the competitor of the guy who you actually found on the web.  The details are in the case but, if you’re curious, The Lanham Act, 15 U.S.C. § 1125 , provides:

(a) Civil action (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which — (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.


The Lanham Act defines “use in commerce,” as follows:

For purposes of this Chapter, a mark shall be deemed to be in use in commerce — (1) on goods when — (A) it 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 if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce, and (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce. . . .” 15 U.S.C. § 1127


In deciding for the defendants (pop-up guys), the court observed “A company’s internal utilization of a trademark in a way that does not communicate it to the public is analogous to a individual’s private thoughts about a trademark.” 414 F.3d at 409.  This apparently means that so long as the defendant keeps the plaintiff’s information hidden from view (“private thoughts”), it can be used by the defendant however creatively he sees fit. This is so even though the free riding competition will “profit from the goodwill and reputation in Plaintiff’s website that led the user to access Plaintiff’s website in the first place.” 414 F.3d at 411.  


Ironically, it appears that this case has also implicated our (c- user’s) interests by ushering in a crowd of software applications that will analyze our own “private thoughts” in order to target advertising. For a recent and interactive application of an eerily similar technology to that examined in 1-800 Contacts, Inc., check out any of the Google account services like Gmail, Ad Sense, Ad Words, Google Reader, Google Calendar, Webmaster Central or Google Analytics and you may notice their “search wiki” digesting your every search and serving it up to the highest bidder. This of course, requires the c-user’s consent … Or does it?  I still can’t figure out how to opt out and therefore, I am concerned about the impact this technology may have. It will be interesting to see if the legislature will step in and try to regulate the bothersome activity of pop-ups and help protect us from ourselves.  Beware: “THERE’S A CODE IN EVERY HAPPY MEAL!”






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