Once again, software provider Gator Corporation has irritated a big brand website whose pages, thanks to Gator, suddenly started featuring pop-up ads for UPS competitors.
Who: Gator Corporation and United Parcel Service of America Inc
When: September 2002
Where: US District Court of the Northern District of Georgia,
From a report by Ed Kabak, Director of Legal Affairs, the Promotion Marketing Association, New York
United Parcel Service of America, Inc (“UPS”) filed a law suit in the US District Court for the Northern District of Georgia in respect of an internet advertiser’s distribution of a software program that causes web users’ computer screens to display “pop-up” advertisements for third parties while they are browsing the UPS website.
The defendant, California based Gator Corp., operates a program called “OfferCompanion”. Individual users download this software and install it on their computers. It monitors the user’s web activity, collecting information about the websites visited and attempting to create a profile of the user’s preferences. Then, when the user visits certain websites, OfferCompanion automatically transmits one or more pop-up advertisements. These are displayed over the contents of the website being visited. Sometimes, as happened in this case, OfferCompanion will display an advertisement for a competitor of the website that the user is visiting. According to the complaint, many users are not aware of the fact that OfferCompanion is present on their computers.
In another case involving Gator Corp., on July 16 2002, a Federal District Court in Virginia held that similar conduct likely violated Federal trademark laws. A similar claim has been made by UPS in this new action, as well as claims that the Gator-initiated advertisements harm UPS’s business relations with its customers and potential customers and seek to profit by unfairly “free-riding on the goodwill of UPS’s famous trademarks and popular website”.
Why this matters:
Apart from the data protection implications of the operation of software of this kind the UK, in the absence of any apparent final concluded judgment on these issues in the US anti Gator litigation, it is interesting to speculate as to whether the operation of similar software in the UK would give UK-based website owners a good cause of action under current UK law.
One’s first impressions as regards any trademark infringement claim are that this would be difficult to run successfully under the Trade Marks Act 1994. Purely to obscure a trademark owner’s own brand with an advertisement for a competitor on a screen is behaviour that is difficult to shoehorn into any of the statutory UK definitions of trademark infringement.
Separately, the unauthorised linking of one website to another has in some instances on continental Europe been held to be a breach of database rights, but again there is no apparent “extraction” or “utilisation” of the UPS site in the context of the Georgia proceedings, only the superimposition of third party advertising.
As regards our old friend “passing off”, one can easily see a robust Chancery Judge being difficult to persuade that streetwise UK consumers would regard advertising for UPS competitors as in some way authorised by UPS and therefore giving rise to the misrepresentation that is essential to establish this tort.
On a related tack it might be possible to work facts of this kind into more rarefied torts such as interference with contractual relations, in this case between UPS and its authorised banner advertisers, but such legal wrongs are notoriously difficult to establish.
In terms of existing case law, perhaps one of the closest, albeit in an analogue environment, that English case law comes is a case involving the unauthorised insertion of “inserts” into newspapers before they were delivered. This precipitated an action by Associated Newspapers for passing off against those responsible (“Insert Media”) and ended in a judgment in the newspaper’s favour. There, however, there was no obvious competition between the newspaper and the products and brands being advertised in the inserts and hence arguably a much higher chance that consumers would be misled. A final thought is whether the operation of the Gator software might constitute interference which could fall foul of the Computer Misuse Act, but the ultimate answer to this and the other questions raised here will have to wait a UK website owner being sufficiently exercised by the operation of software of this kind to take further steps.