1-800 Contacts Loses YET ANOTHER Trademark Lawsuit Over Competitive Keyword Ads–1-800 Contacts v. Warby Parker

June 29, 2022 · by Eric Goldman · in E-Commerce, Internet History, Marketing, Search Engines, Trademark

1-800 Contacts first appeared on this blog on February 9, 2005, my second day of blogging. 17 years later, I’m still blogging their ignoble trademark lawsuits. 🤡 Some “highlights” of 1-800 Contacts’ trademark jurisprudence over the years:

1-800 Contacts v. WhenU (2d Cir. 2005). A major plaintiff loss against an adware vendor, and who likes adware???
1-800 Contacts v. Lens.com (10th Cir. 2013). This ruling single-handedly killed the initial interest confusion doctrine in 1-800 Contacts’ home court.
FTC v. 1-800 Contacts (FTC 2018). 1-800 Contacts overturned the antitrust piece on appeal to the Second Circuit, but the FTC opinion is still blistering. It showed how (1) 1-800 Contacts overcharges its customers, (2) 1-800 Contacts engaged in lawfare to protect its overpricing, and (3) 1-800 Contacts (intentionally?) misinterpreted the law of competitive keyword ads for many, many years.

This week, another court added to 1-800 Contacts’ smouldering pile of trademark jurisprudence and granted a judgment on the pleadings (Rule 12(c)) dismissing 1-800 Contacts’ competitive keyword advertising lawsuit against its rival Warby Parker.

Keyword Ads. The court analyzes the standard Second Circuit Polaroid multi-factor test for likelihood of consumer confusion:

Bridging the gap. Irrelevant among direct competitors.
Actual confusion. Alleged facts might permit the inference of actual confusion. Not enough information for the court to use this factor.
Mark strength. Shockingly, the court says 1-800 Contacts has an inherently distinctive mark (suggestive) that’s strong. IT’S A FUCKING PHONE NUMBER THAT INCLUDES THE PRODUCT CATEGORY’S NAME.
Mark similarity. The court says the right comparison is between “1-800 Contacts” and “Warby Parker,” not Warby Parker’s use of the 1-800 Contacts term as the keyword trigger. This is the correct way to analyze the mark similarity factor in competitive keyword advertising cases, though many courts have not taken this approach.
Proximity of goods. The “products are virtually identical and are in direct competition with another.”
Bad faith. Some evidence of Warby Parker’s bad faith due to the customized landing page (discussed below).
Customer sophistication. First, the court says consumers understand competitive keyword advertising: “the relevant consumer base, conducting internet searches in the year 2022, would likely be familiar with both the concept of paid search results and the significance of website address links.” 💥 (I think this conclusion was true many years before 2022). Second, the customer base would review the search results before clicking and review the linked website before making a purchase or handing over sensitive private info.

Looking at the factors, it seems like 1-800 Contacts could win. Several factors point in its direction, including the crucial bad faith factor. Yet, the court tells 1-800 Contacts to pound sand. The court points to the mark dissimilarity, the fact that Warby Parker’s name appeared in the domain name displayed on the search results page and the linked website, and the consumer sophistication prong:

reasonably sophisticated consumers would likely exercise substantial caution before clicking on any links to websites as they navigate the online marketplace. Contact lenses are products for which consumers are likely to pay close attention because they are placed on the corneas of the eyes and may affect the quality of the users’ vision. As applied here then, even before navigating to the allegedly misleading Warby Parker landing page, these consumers would likely take the time to read and understand that any search results linking to Warby Parker’s website—labeled as “Ads” and lacking any references to the 1-800 Contacts Marks—would send them to the Warby Parker website at warbyparker.com, and not 1800contacts.com….

these reasonably sophisticated consumers would likely exercise substantial caution even after clicking on any links to websites as they navigate the online marketplace, where they may be prompted to provide sensitive information ranging from home addresses to credit card numbers. Here, even assuming that some consumers will mistakenly click on a Warby Parker paid search result and inadvertently navigate to Warby Parker’s page, these consumers would then take time to meaningfully review the contents and layout of the website before taking any further action

Note: the court is making empirical determinations without any citations or empirical support. Unfortunately, that’s standard operating procedure in trademark cases. Nevertheless, it’s 1-800 Contacts’ job to show the court that consumers were confused. So the court’s empirical musings suggest that 1-800 Contacts didn’t properly prepare the case (or, more likely, it can’t show any real consumer harm from competitive keyword advertising).

Customized Landing Page. Warby Parker created a custom landing page for searchers clicking on its 1-800 Contacts-triggered ads that differed from Warby Parker’s standard web pages and arguably mimicked 1-800 Contacts’ website. The screenshots:

The court says consumers are sophisticated enough to distinguish these pages:

the Warby Parker landing page displays the Warby Parker mark (1) at the top and center of its page and (2) in dark text (3) in front of a white background. In contrast, 1800contacts.com displays the 1-800 Contacts name (1) on the second row of text and to the left of the page and (2) in white text (3) in front of a dark blue background. Second, as to the allegedly problematic “blue box,” a reasonable consumer is unlikely to become confused by Warby Parker’s use of a single light-blue box when 1800contacts.com uses multiple bars that span the entire horizontal width of its website in different shades of blue. Third, as to Warby Parker’s discount offer, not only is this unlikely to confuse online consumers who presumably and frequently see discount offers from all types of retailers, Warby Parker’s website not only offers an inferior percentage discount (15% as opposed to 1-800 Contacts’s 20%), but also displays it only once, compared to 1800contacts.com, which also displays its 20% discount offer in a separate banner at the top of the screen, even above its own 1-800 Contacts mark.

Furthermore…

to the extent that online consumers may make mistakes in navigation, they are well-positioned to quickly identify and rectify their mistakes. Here, even assuming that an appreciable number of reasonable consumers intending to purchase from 1-800 Contacts will click on an “Ad” search result clearly linking to warbyparker.com and not 1800contacts.com, they will then land on the Warby Parker website, with the Warby Parker mark displayed top and center on a website page that bears little resemblance to the 1-800 Contacts website and contains no references to the 1-800 Contacts Marks. In such circumstances, it is implausible that these reasonable online consumers would be confused as to whether the contact lenses sold on the Warby Parker site are related to 1-800 Contacts

Implications

The light blue shading on Warby Parker’s landing page seems a little dubious, but the court’s final point–that consumers can easily use the back button and often do–strikes at the core deficiency of keyword ad lawsuits since the beginning. So long as consumers don’t actually believe that Warby Parker is 1-800 Contacts, any consumer engagement with Warby Parker is pro-consumer competitive behavior.

That’s exactly why 1-800 Contacts has been trying to shut it down for two decades. Having established the category of online contact lens sales, 1-800 Contacts wants to shut the door on price competition so it can maximize the ROI from its category-building investments. This regressive and anti-consumer approach got zero traction with this judge.

1-800 Contacts’ keyword ad litigation campaign went on hiatus during the pendency of the FTC enforcement. With that resolved, 1-800 Contacts reverted to its old litigation tricks–and is getting the same futile outcomes. FTC entanglements and courtroom failures normally would dissuade most trademark owners from continuing this campaign. However, I highly doubt this will be my last blog post about 1-800 Contacts.

Case citation: 1-800 Contacts, Inc. v. Jand, Inc., 2022 WL 2316181 (S.D.N.Y. June 27, 2022)

BONUS: Morris Bart, LLC v. Slocum Law Firm LLC, 2:21-cv-01771-JCZ-DPC (E.D. La. May 26, 2022). Another law firm suing over competitive keyword ads. The court, bound by Fifth Circuit law, rejects the motion to dismiss per the Jim Adler/Texas Hammer Fifth Circuit ruling. The court says the fact that Slocum didn’t display its trademark in the ad copy might be a problem:

a potential client using the Bart mark to search for Bart will obtain a result that does not clearly indicate that it belongs to the Slocumb Firm and not to Bart. This is the initial interest confusion that Bart alleges; whether it may ultimately prove to be a mere distraction and therefore fall short of being actionable is not an issue that the Court can resolve on the pleadings alone.

However, the court dismisses the publicity rights claim because Slocum’s ads don’t include Bart’s marks, name, or likeness, even though if they were used to trigger the ads. This accords with the uncited Habush case.

For more on competitive keyword ads by lawyers, see this article.

More Posts About Keyword Advertising

1-800 Contacts Loses YET ANOTHER Trademark Lawsuit Over Competitive Keyword Ads–1-800 Contacts v. Warby Parker

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