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Wells Fargo v. WhenU.com

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Citation Edit

Wells Fargo & Co. v. WhenU.com, Inc., 293 F.Supp.2d 734 (E.D. Mich. 2003) (full-text).

Factual Background Edit

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 Edit

Plaintiffs sued defendant for various trademark and copyright claims and moved for a preliminary injunction. The court denied plaintiffs’ motion on all claims. The court held that plaintiffs did not establish a likelihood of success on the merits of its trademark claims because defendant did not "[[use in commerce|use" plaintiffs' marks "in commerce" and because plaintiffs' survey evidence of likelihood of confusionwas flawed.

Regarding use of plaintiffs' marks "in commerce," the court first found that defendant did not hinder access to plaintiff's websites because users only had to move, minimize, or close the advertisement windows to view plaintiffs' websites in full. Second, the court ruled that the simultaneous display of defendant's advertisements and plaintiffs' websites was not a use "in commerce" of plaintiffs' marks because: (a) the positioning of defendant's ad did not constitute framing of plaintiffs' sites and thus the presentation of the two windows was not "seamless" such that consumers would realize that the ads and the website come from two different sources, (b) defendant engaged in legitimate comparative advertising by placing its advertisements in separate windows near plaintiffs' marks, and (c) the use of plaintiffs' marks in defendant’s “scrambled” directory was not a use "in commerce" because the directory uses the marks only to identify the appropriate category and does not use the mark to identify the source of products.

Regarding plaintiffs’ failure to show a likelihood of confusion, the court found their survey evidence unpersuasive and flawed in a number of respects. For example, the surveys did not approximate market conditions because it did not test defendant's ads. Moreover, the surveys did not test the appropriate universe because it did not focus on consumers looking for various financial and banking services, like those offered by plaintiffs. And the survey contained questions that were unclear and leading and lacked a control to account for "noise."

Finally, the court found that plaintiffs would not suffer irreparable harm in the absence of an injunction while an injunction would harm defendants and the general public. In particular, plaintiffs' delay of nine months in asserting their rights undermined their claim of irreparable harm and, despite plaintiffs' claims, there was no evidence that defendant's ads would harm plaintiffs' relationship with banking regulators. In contrast, an injunction would harm defendant's relationships with current advertisers, prevent defendant from obtaining new advertisers, and harm customers by limiting the choices they have in obtaining various services.

Source Edit

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