The Gator Corporation appears to have lost the first round in its fight against 10 Web site publishers who sued the company last month, saying that its use of online pop-up advertisements violated copyright and trademark laws.
Judge Claude M. Hilton of the United States District Court in the Eastern District of Virginia said on Friday that he would issue a preliminary injunction against Gator. The judge did not offer specifics about the terms of the injunction, but both parties expect him to bar Gator from displaying ads on the plaintiffs' Web sites until the trial is finished. The publishers include The New York Times Company, the Gannett Company and the Washington Post Company.
Gator's software permits users to fill out password and shipping information in an online form and use it as a shortcut when they visit different e-commerce Web sites. But Gator also uses the information gathered from users to display pop-up ads over Web sites without the publishers' permission.
In court Friday, Judge Hilton said that he found enough evidence to support the plaintiffs' claim that Gator's advertisements violated trademark laws in particular, according to court transcripts. He did not elaborate on his decision, but during the hearing, he indicated that one issue was the proximity of Gator's pop-up ads to the publishers' trademarks.
"Maybe that's the problem," Judge Hilton told Gator's lawyers. He went on to suggest a possible solution, saying Gator could employ technology that would display a Web site, then an ad, then return to a Web site in sequence. "But you wouldn't have your message there under somebody else's mark," he said.
Gator's lawyers have asserted that their client's service is similar to instant-messaging software, which users download with the understanding that messages will pop up over whatever page they may be viewing at the time.
Gator executives have also pointed out that The New York Times paid to have pop-up ads appear over The Wall Street Journal's Web site when Gator users visited that site last year.
Toby Usnik, a Times spokesman, declined to comment, but in court papers filed by The Times, the company said it had hired an advertising agency, which paid Gator to place ads on The Times's behalf. When The Times discovered early this year that its ads were appearing over sites without the publishers' permission, the company halted the Gator campaign, according to court papers.
After Judge Hilton's ruling, Gator asked the court to expedite the trial, presumably to limit lost revenues. But Jeff McFadden, Gator's chief executive, said yesterday that "less than one-third of 1 percent" of the company's ads were placed over the plaintiffs' sites, so the economic effects of the preliminary injunction would not be serious.
Terence Ross, a lawyer for the publishers, said he would welcome a speedy trial. He said he expected the trial to begin in October if Judge Hilton opted for an expedited trial, and late November if he did not.
Bob Tedeschi, The New York Times. July 16, 2002
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