The Second Circuit has reversed the District Court in 1-800-Contacts and dismiised the trademark infringment cause (remanding to hear unfair competition cause).
Text of decision: (drill down on 2d Cir. site on ‘search all’ link).
I understand the Court’s holding that WhenU’s internal listing of website URLs is not trademark use. I understand that in and of itself, placing an ad next to a competitor’s ad is not trademark use (but might be an element of unfair competition). I think that in its dicta, the Court placed too much emphasis on the fact that WhenU sells categories (as in eye care) as opposed to keywords. I think that when you read the discussion of free-riding on page 24, you can predict how these justices would come out on the unfair competition causes. I think that it’s interesting that a company that advertises on Gator, would sue WhenU.
Prof. Goldman on decision here.