1-800 Contacts, Inc. v. Whenu.Com
| Decision Date | 22 December 2003 |
| Docket Number | No. 02 Civ. 8043(DAB).,02 Civ. 8043(DAB). |
| Parties | 1-800 CONTACTS, INC., Plaintiff, v. WHENU.COM and Vision Direct, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Marshall R. King, Terence P. Ross, Gibson, Dunn & Crutcher, L.L.P., New York, NY, for the Plaintiff.
Arnold Paul Lutzker, Carl Herman Settlemyer, Maureen Cohen Harrington, Lutzker & Lutzker, L.L.P., Washington, DC, Celia Goldwag Barenholtz, John A. Morris, Kronish, Lieb, Weiner & Hellman L.L.P., New York, NY, for Defendant WhenU.com.
James D. Jacobs, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains, NY, for Defendant Vision Direct, Inc.
Before the Court is a Motion for a Preliminary Injunction by Plaintiff 1-800 Contacts ("1-800 Contacts" or "Plaintiff") to enjoin Defendants from delivering to computer users competitive "pop-up" Internet advertisements, in violation of federal and state copyright, trademark, and unfair competition laws. For the reasons set forth herein, Plaintiff's motion is GRANTED in part.
On October 9, 2002, Plaintiff filed this action with ten claims for relief.1 With its Complaint, Plaintiff also filed a Motion for Preliminary Injunction,2 to enjoin Defendants from: 1.) Placing, or causing any other entity to place, advertisements of any kind on any copy of Plaintiff's website, without the express consent of the Plaintiff; 2.) Altering or modifying, or causing any other entity to alter or modify, any copy of Plaintiff's website in any way, including its appearance or how it is displayed; 3.) Infringing, or causing any other entity to infringe, Plaintiff's copyright; 4.) Making any designations of origin, descriptions, representations or suggestions that Plaintiff is the source, sponsor or in any way affiliated with Defendant Vision Direct's website and services; 5.) Acting in any manner that causes Defendants' products, services, websites, or advertisements to be in any way associated with Plaintiff's products, services, or website, including, but not limited to, any means of marketing advertising, or agreements with third parties likely to induce the belief that Defendants or Defendants' websites, advertisements, products or services are in any way associated connected, or affiliated with, or licensed or authorized by Plaintiff; 6.) Infringing, or causing any other entity to infringe, Plaintiff's trademarks and/or service marks rights; 7.) Unfairly designating the origin of Defendant Vision Direct's website and services, or otherwise creating confusion regarding the origin of Defendant Vision Direct's website and services; 8.) Unfairly competing with Plaintiff in any manner; 9.) Acting, or causing another entity to act, in any manner likely to dilute, tarnish, or blur the distinctiveness of the 1-800 CONTACTS marks; 10.) Causing a likelihood of confusion or injuries to Plaintiff's business reputation; 11.) Interfering with Plaintiff's reasonable business expectations. (Plaintiff's Proposed Order, filed October 9, 2002.)
On October 22, 2002, the Court held a conference call with the parties, during which the parties agreed to cease the allegedly offending "pop-up" advertising conduct until a preliminary injunction hearing. The parties agreed to allow Defendants sufficient time to conduct a consumer survey to rebut Plaintiff's survey evidence and scheduled a Preliminary Injunction hearing for February 7, 2003.3
On January 7, 2003, the Court ordered, by memo-endorsement of a letter request from Defendant WhenU.com ("WhenU" or "WhenU.com"), an adjournment of the Preliminary Injunction Hearing in this case to March 18, 2003. (Memo-Endorsement of Def. Jan. 6, 2003.) On January 31, 2003, Defendant WhenU.com filed its Memorandum of Law in Opposition to Plaintiff's Motion for a Preliminary Injunction ("WhenU.com Jan. 31, 2003"),4 and Defendant Vision Direct filed its Memorandum in Opposition as well ("Vision Direct Jan. 31, 2003").5
On February 28, 2003, Plaintiff filed its Memorandum of Law in Reply to Defendant WhenU.com's Opposition and its Memorandum of Law in Reply to Defendant Vision Direct's Opposition ("Pl. Feb. 28, 2003").
Evidentiary hearings and argument were heard on March 18, March 19, April 8, and April 10, 2003. The Court incorporates herein the record of the evidentiary hearings and argument. Relevant hearing testimony and arguments are set forth in more detail below.6
The undisputed facts in this section, with the legal conclusions and facts found in the Discussion section, infra, constitute the Court's Findings of Fact and Conclusions of Law for purposes of Rule 52(a).
Plaintiff 1-800 Contacts, Inc. ("1-800 Contacts") sells and markets replacement contact lenses and related products through its website, located at http://www.1800Contacts.com, and also through telephone and mail orders. (Declaration of Jason Mathison ("Mathison Dec.") ¶ 4; Plaintiff's October 9, 2002 Memorandum ("Pl. Oct. 9, 2002") at 3). Plaintiff has registered the "WE DELIVER, YOU SAVE" mark with the United States Patent and Trademark Office ("USPTO"), and has filed for registration of the mark "1-800 CONTACTS" and the 1-800 CONTACTS logo. Plaintiff has expended considerable sums on marketing these marks; in 2001, 1-800 Contacts spent $27,118,000 on marketing. (Mathison Dec. ¶ 7; Pl. Oct. 9, 2002 at 4.) Since the founding of 1-800 Contacts in 1995, Plaintiff has continuously used its service marks to promote and identify its services in the United States and abroad. (Mathison Dec. ¶ 6) Plaintiff's sales have grown from $3,600,000 in 1995 to $169,000,000 in 2001. (Mathison Decl. ¶ 8; Pl. Oct. 9, 2002 at 3.)
Plaintiff is the sole owner of the 1-800Contacts.com website. (Mathison Dec. ¶ 5; Pl. Oct. 9, 2002 at 4.) Plaintiff registered its copyright to the 1-800Contacts.com website with the Copyright Office of the United States Library of Congress on October 2, 2000.7 (Compl., Exh. D.) Over 221,800 people visited Plaintiff's website in the month of September, 2002.8 (Mathison Dec. ¶ 9; Pl. Oct. 9, 2002 at 4.)
Defendant Vision Direct, Inc. sells and markets replacement contact lenses and related products through its website, located at http://www.visiondirect.com. (Mummery Dec. ¶ 2; Vision Direct Jan. 31, 2002 at 2.) Vision Direct and 1-800 Contacts are competitors. Id. Defendant Vision Direct has registered and maintains a registration in the domain name9 www.www1800Contacts.com.
Defendant WhenU.com is a software company that has developed and distributes, among other products, the "SaveNow" program, a proprietary software application. (Tr. at 34; Naider Aff. ¶ 22.)
Since Plaintiff's claims arise from alleged anti-competitive and infringing action by Defendants through the Defendants' use of proprietary software that is distributed to computer users, a brief explanation of the Internet, the computer operating environment and associated terms and definitions is helpful. These facts are not in dispute.
The Internet is a global network of millions of interconnected computers. (Compl.¶ 20.) With a computer that is connected to the Internet, a computer user can access computer code and information that is stored on the Internet in repositories called "servers." (Tr. at 137-38.) Much of the information stored in servers on the Internet can be viewed by a computer user in the form of "webpages," which are collections of pictures and information, retrieved from the Internet, and assembled on the user's computer screen. (Compl.¶ 20.) "Websites" are collection of webpages that are organized and linked together to allow a computer user to move from webpage to webpage easily. (Id.) A single website may contain information or pictures that are stored on many different servers. (Tr. at 139-140.)
To gain access to the Internet, a computer user generally connects to the Internet using an internet service provider ("ISP").10 (Tr. at 136.) The ISP provides access to the Internet, which allows the user's computer to communicate with the Internet. (Tr. at 136.) Once a connection to the Internet has been established through an ISP, a user may "browse" or "surf" the Internet by using a software program called an Internet browser ("browser"). (Tr. at 136.) Microsoft Internet Explorer is one example of a browser program.11 (Tr. at 135.) Through the browser, a user retrieves information located on Internet servers.12 (Tr. at 138.)
To retrieve information from the Internet, a user may type the address13 of a website into the web browser — the user's computer will then request information from the server or servers on which the website resides,14 and then will access the pertinent information on those servers. (Tr. at 137-38.)
Many computer users ("users") access the Internet with computers that use the Microsoft Windows operating system ("Windows"). Windows allows a user to work in numerous software applications simultaneously. (Naider Aff. at 4.) 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. (Naider Aff. at 4.) A user may open multiple windows simultaneously, allowing the 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. (Naider Aff. at 4-5.)
A "search engine" is a website (or in some cases, a software program) that a computer user can use to find information on the Internet.15 Typically, a computer user will type in a word or...
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