Out-Law / Your Daily Need-To-Know

This guide is based on UK law. It was last updated in June 2008.

Adware is ad-serving software that is often unwittingly downloaded by internet users. It commonly piggybacks on another application that is knowingly downloaded and reference to the adware is often buried in the small print.

Adware can monitor a user's online activities. It can examine keywords, URLs and search terms and then selects which ads to serve the user, sometimes as pop-up or pop-under adverts. So when the user is visiting one website, a pop-up ad may be displayed to that user for a rival site. But those without the adware installed would not see the ad.

Two parties potentially face legal issues with adware: first, the adware companies themselves; second, their customers – i.e. those who sponsor the ads.

There have been no cases on adware in the UK.

In the US, in June 2005, the Court of Appeals for the second circuit found that the use of a registered trade mark in adware did not infringe the rights of the trade mark owner, in a case brought against adware company WhenU.com by 1-800 Contacts Inc.

WhenU's partnership with Kazaa, the file-sharing service, put its adware onto 25 million computers. When any of those computers visited 1-800 Contacts' website, a pop-up ad would be displayed to the user. It made no reference to the 1-800 Contacts trade mark, but simply referred to Vision Direct, a rival lens seller who had employed WhenU's adware. 

Although this case ultimately was decided upon the Court's finding that WhenU had not used 1-800 Contacts' trade marks in the course of trade when those marks had appeared in invisible form in the adware programming language, the Court seems to have taken a very similar attitude to Justice Jacobs in Reed and Judge Brinkema in the GEICO case.

Where adware or its pop-up adverts make no visible reference to the registered mark, then infringement is unlikely to be found. However, 1-800 Contacts' position was not helped by the fact that the Court noted that it had employed adware in a very similar fashion to Vision Direct in the past.

Justice Jacobs' reasoning in Reed would suggest that the UK Courts would take a similar view on the use of registered trade marks in adware and pop-up adverts as in the 1-800 Contacts case – although clearly other cases can turn on their own facts and circumstances.

Trade mark considerations are not the only ones for providers of adware, given that its installation on many computers is unwitting.

To put adware on a computer by stealth could breach the Computer Misuse Act of 1990, which makes unauthorised access to a computer a crime, one that's aggrivated by modifying the contents of the computer.

A lot of adware products involve unauthorised access and they can amend your PC's settings. So those responsible could, at least in theory, face a prison term of up to five years.

Much adware will evade prosecution because the law requires that unauthorised access be proved beyond any reasonable doubt. Given that adware often piggybacks other applications, this could be tricky. Its purpose may be addressed briefly in the depths of a licence agreement, it's just that too few people will read and understand the terms. Instead, they just click "OK". There is another law, however.

The Privacy and Electronic Communications Regulations of 2003 had some impact on spam control, but less well known is their impact on spyware and adware.

The Regulations say that information – and that's any information, not just personal information – must not be stored on or accessed from a user's computer unless certain steps are followed. These steps would require adware providers to give clear and comprehensive information about what their software does, and they would need to give users the opportunity to refuse the storage of or access to that information.

If anyone suffers loss as a result of a failure to follow these steps, they can sue. The Information Commissioner can also get involved, which he may do if he gets complaints about underhand installation tactics.

Be vigilant

The interaction of trade mark law and the internet is complicated by the fact that trade mark law is territorial and applied in each country according to its own laws. This means that case law is not and cannot be expected to be consistently applied even within the EU. However, there is now a reasonable degree of certainty within the UK to advise on specific circumstances giving rise to trade mark infringement on the internet.

In recognition of this, certain search engine operators, including Google, will now exclude UK registered trade marks from their search terms (for sponsored links) if they are notified of the specific registration by the trade mark owner. Currently, exclusions are made for identical marks only, not similar marks, which is a continuing cause of irritation to trade mark owners.

The golden rule is to be vigilant for the appearance of competitor websites in search results for your brands and above all to register your brands as trade marks.


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