Warby Parker Beats Back 1-800's Infringement Claims

• Published date: 29 September 2022
• Subject Matter: Consumer Protection, Intellectual Property, Consumer Law, Trademark
• Law Firm: Katten Muchin Rosenman LLP
• Author: Mr David Halberstadter

Court applies Polaroid factors to determine likelihood of confusion

In our Fall 2021 issue, we reported on the Second Circuit's decision in 1-800-Contacts, Inc. v. Federal Trade Commission, 1 F.4th 102 (2d Cir. 2021). In that case, the Second Circuit reviewed the online contact lens retailer's practice of filing trademark infringement lawsuits against competitors who purchased 1-800-Contacts related "keywords" so that their own paid advertisements would appear in the search results of consumers searching online for 1-800's website. 1-800 typically then entered into settlement agreements in which the competitors agreed not to bid on 1-800's name or variations of its trademarks in future keyword auctions conducted by search engines. The Federal Trade Commission considered these settlement terms a method of unfair competition under the FTC Act, but the Second Circuit disagreed.

Our article questioned whether 1-800's trademark claims against competitors were meritorious and noted that 1-800 had just filed another federal lawsuit, in which it asserted that eyeglasses retailer, Warby Parker, infringed on 1-800's trademarks by purchasing search engine keywords such as "1-800 Contacts" and other variations, in order to advertise its recently-launched contact lens business. 1-800 Contacts Inc. v. JAND Inc., d/b/a Warby Parker, Case No. 21-cv-06966 (S.D.N.Y., filed August 18, 2021). As promised, we are keeping tabs on this lawsuit. Here's the latest.

On June 27, United States District Judge P. Kevin Castel of the Southern District of New York granted Warby Parker's motion for judgment on the pleadings and entered judgment for Warby Parker. To be sure, this is only one district court's decision; it has no precedential value and it is based upon the specific allegations of 1-800's complaint. Nevertheless, the court's summary dismissal of 1-800's claims could put a serious dent in the company's litigation strategy for deterring competitors from engaging in keyword advertising. This decision could embolden other competitors to ramp up their bidding on keywords related to 1-800's marks and to refuse to settle should 1-800 sue them. And other retailers with a substantial online presence and strong trademarks may think twice about engaging in similar litigation-and-settlement tactics.

1-800's Key Allegations

1-800 alleged that Warby Parker, as part of its recent foray into the online contact lens market, sought to confuse and mislead consumers searching for 1-800's online...