According to MediaPost.com, Lens.com filed suit against 1800Contacts alleging they are violating antitrust laws and engaging in “vexatious and sham” litigation by suing 15 competitors over their paid search campaigns.
This an interesting case as 1800contacts has been according to the suit suing and threating competitors who buy keyword advertising under their trademark, a practice courts have upheld time and time again in suits against the search engines who sell the ads.
“This lawsuit is about 1-800’s bold and unlawful crusade to obtain or maintain its dominant position in the direct-to-consumer market for replacement contact lenses,”
“Lens.com argues in its complaint, “Notwithstanding its carefully crafted image, 1-800 has battled to censor and impede the universe of information that can be passed on to consumers; and conspired to ensure that consumers never taste the fruits of competition.”
“Lens.com asserts, 1800Contacts has unlawfully attempted to dominate the direct-to-consumer market for contact lenses by bringing or threatening trademark infringement claims against a host of competitors.”
“Beginning in or around 2005, 1-800 implemented a business practice, which called for 1-800 officials to conduct weekly searches of “1-800 Contacts” and variations thereof on Google, Yahoo and other Internet search engines,” the lawsuit alleges.
“Upon information and belief, when its weekly searches returned the sponsored link of a competitor, 1-800 would then accuse the competitor of purchasing 1-800’s trademark as a keyword from the Internet search engine. Upon information and belief, 1-800 sent cease and desist correspondence to all such competitors,” it continues.”
“Lens.com argues that 1800Contacts did so in order to coerce competitors into agreeing that they would stop purchasing the term to trigger search ads, which helped the company cement a dominant market position.”
“Lens.com, says has been fighting trademark infrigement claims from 1800contact since 2008, from Lens.com buying keywords saying they have spent $1.4 million “to defend against 1-800’s frivolous infringement claims,”
Lens.com is asking for a declaratory judgment that it didn’t infringe 1800Contacts’ trademark.
You know, the USPTO hired an FT economist a while back.
I sometimes wonder if the idea of an auction-based system hasn’t crossed his mind.
Trademarks to the highest bidder.
Not simply limited to this case, this is pretty much what Google is managing to do. They sell the use of unstylised trademarks on their website to the highest bidder.
Adwords has something called a Quality Score which is used to determine who gets the top spot.
A question for the Adwords’ gurus: Does that score take into account whether the bidder is already paying trademark fees to use the word in it’s non-Google advertising?
Courts continue to uphold that its ok to buy keywords against someone else’s mark, although I still disagree with it. According to past court cases I guess lens.com is correct, but realistically 1800 spent a boat load of advertising dollars to get it’s dominant position years ago and now everyone else wants to take easy street by leveraging 1800’s brand recognition. The only reason why the keyword 1800contacts is worth anything is because 1800contacts paid millions to accomplish that. 1800 did that, it wasn’t just happenstance and I don’t think it is generic. So why should everyone get to just bid on the term 1800 created for themselves? Then again in TV ads you will see coke comparing itself to Pepsi lawfully and vise-versa. IMHO its all about use. Will be interesting to see how the case goes.