## Facts

- 1-800 Contacts sold contact lenses through phone, mail, and its website, and asserted trademark rights connected to its branding and online presence.
- WhenU distributed “SaveNow” software that, once installed on a user’s computer, ran in the background and delivered context-based pop-up style advertisements.
- SaveNow relied on an internal directory associating certain URLs (including 1-800’s website address) and certain search terms with ad categories (e.g., “eye care”).
- When the user visited a matched website or entered matched terms, SaveNow could generate a separate advertisement window for a relevant advertiser, including a competitor, Vision Direct.
- The advertisements appeared in separate windows, were branded as originating from WhenU (e.g., “SaveNow”), and did not display 1-800’s trademarks or trade dress in the ad content.
- 1-800 alleged the pop-ups created a false impression of affiliation or authorization by the underlying website.
- The district court preliminarily enjoined WhenU from using or displaying 1-800’s trademarks (or confusingly similar matter) in connection with contextually relevant advertising.
- WhenU and Vision Direct took an interlocutory appeal.

## Issues

1. Whether WhenU made a Lanham Act “use in commerce” of 1-800’s trademarks by internally referencing 1-800’s website address in software to trigger competitor pop-up ads.
2. Whether Vision Direct could face contributory or vicarious trademark liability based on advertising through WhenU if WhenU’s conduct was not a qualifying “use.”

## Decision

- The Second Circuit reversed the preliminary injunction and directed dismissal of the trademark-infringement-based Lanham Act claims.
- The court held WhenU’s conduct did not constitute the threshold statutory “use in commerce” required for trademark infringement or Lanham Act unfair competition.
- Because there was no actionable “use,” the court did not proceed to a likelihood-of-confusion analysis.
- Without primary trademark liability by WhenU, claims against Vision Direct premised on contributory or vicarious trademark infringement could not stand.
- Non-trademark claims were remanded for further proceedings.

## Legal Principles

- Lanham Act trademark infringement and false designation claims require, as a threshold element, a defendant’s “use in commerce” of the plaintiff’s mark as defined by statute.
- A non-public, internal reference to a website address or term in software for automated ad targeting—without displaying the plaintiff’s mark to consumers and without offering the mark for purchase as an advertising trigger—does not constitute trademark “use in commerce.”
- When a defendant does not use the plaintiff’s mark in a source-identifying or promotional manner, trademark liability cannot be imposed solely because the defendant’s technology delivers competitor advertising in proximity to the plaintiff’s website.
- Secondary trademark liability (contributory or vicarious) requires an underlying actionable trademark violation.

## Conclusion

The Second Circuit vacated the injunction because WhenU’s adware used 1-800’s website address only as an internal trigger and did not display or otherwise use 1-800’s marks in commerce; absent this statutory element, trademark-based Lanham Act claims against WhenU and Vision Direct failed, while other non-trademark claims remained for further proceedings.


1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005)