1-800 Contacts, Inc. v. JAND, Inc.

Background

1-800 Contacts, Inc. sells contact lenses online through 1800contacts.com. JAND, Inc., doing business as Warby Parker, sells eyeglasses and contact lenses online and through physical stores. 1-800 Contacts alleged that JAND bid on search-engine keywords containing the 1-800 Contacts trademarks, including “1800 Contacts,” so that Warby Parker advertisements appeared when consumers searched for those terms.

According to the complaint, the advertisements were labeled “Ad,” displayed the warbyparker.com address, and directed users to a contact-lens landing page on Warby Parker’s website. 1-800 Contacts alleged that this page used a similar color scheme, layout, imagery, and discount offer to mimic 1-800 Contacts’ website. It claimed that the conduct diverted customers, increased Warby Parker’s sales, and increased 1-800 Contacts’ advertising costs.

1-800 Contacts asserted trademark-infringement and unfair-competition claims under the federal Lanham Act and New York common law. After filing its answer, JAND moved under Federal Rule of Civil Procedure 12(c) for judgment on the pleadings on all claims.

Legal standard

A Rule 12(c) motion tests whether the pleadings state a legally sufficient claim. The court applies the same standard used for a motion to dismiss for failure to state a claim. The complaint must contain factual allegations that, accepted as true, make the claimed right to relief plausible rather than merely possible. The court does not assume that unsupported legal conclusions are true.

For the federal trademark claims, the court explained that 1-800 Contacts had to show that its marks were protected and that JAND’s use would likely confuse consumers about the source or sponsorship of the products. The court evaluated likely confusion using the eight-factor test commonly called the Polaroid factors. New York’s trademark-infringement and unfair-competition standards generally mirror the federal standards, although New York unfair competition also requires bad faith.

Court’s analysis

The parties did not dispute that the 1-800 Contacts marks were protected or that JAND’s keyword bidding constituted use of those marks for purposes of the federal claims. The court therefore focused on whether the alleged conduct was likely to confuse consumers.

The court found that the 1-800 Contacts marks were strong. It concluded that the marks were suggestive, rather than generic or descriptive, and that they had acquired marketplace distinctiveness through nearly three decades of use, substantial advertising and marketing, and millions of website visitors.

The court found, however, that the relevant marks were substantially different. Although JAND used the 1-800 Contacts marks when bidding on search terms, the court compared those marks with the “Warby Parker” mark in evaluating whether consumers would be confused. The court emphasized that the search results displayed the Warby Parker name and the warbyparker.com address, while “1-800 Contacts” referred to a toll-free number and contact lenses.

The court agreed that the parties sold virtually identical products and were direct competitors. It also found some evidence of bad faith at the pleading stage because the complaint alleged that JAND used a different landing page for searches involving the 1-800 Contacts marks and designed that page to resemble aspects of the 1-800 Contacts website. The court stated that it lacked enough information to draw a meaningful conclusion about actual confusion.

The court nevertheless concluded that the complaint did not plausibly allege likely confusion. It reasoned that reasonably sophisticated online consumers would notice that the paid search results were labeled “Ad,” identified Warby Parker, and linked to warbyparker.com rather than 1800contacts.com. Consumers would also review the Warby Parker page before making a purchase or providing payment information. The court found that the Warby Parker name was prominently displayed and that the alleged similarities—a light-blue box, product imagery, and a discount offer—were insufficient to overcome the differences between the websites.

Because the federal claims failed to plausibly allege likely consumer confusion, the court reached the same conclusion for the New York trademark-infringement and unfair-competition claims, which shared the relevant pleading requirements.

Disposition

Judge P. Castel granted JAND’s motion for judgment on the pleadings. The court directed the Clerk to terminate the motions identified as Documents 32 and 39 and enter judgment for JAND.