1-800 Contacts
Encyclopedia
1-800 CONTACTS is a privately held company based in Draper, Utah
Draper, Utah
Draper is a city in Salt Lake and Utah Counties in the U.S. state of Utah, located about south of Salt Lake City along the Wasatch Front. Between 1990 and 2000 Draper was Utah's fastest-growing city over 5,000 people . Its population in 1990 was 7,143 and had grown to 25,220 by the 2000 census...
that sells various brands of contact lenses, including Johnson & Johnson
Johnson & Johnson
Johnson & Johnson is an American multinational pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500....
Vision Care, Ciba Vision
CIBA Vision
CIBA VISION is a company that researches, develops, and manufactures contact lenses and lens care products. A Novartis company, it is headquartered in Atlanta, Georgia in the Johns Creek Technology Park. Manufacturing plants are also located in Germany, Singapore, Indonesia, and Malaysia...
, Bausch & Lomb
Bausch & Lomb
Bausch & Lomb, an American company based in Rochester, New York, is one of the world's leading suppliers of eye health products, such as contact lenses and lens care products today. In addition to this main activity, in recent years the area of medical technology has been developed...
and CooperVision
CooperVision
The Cooper Companies is an American medical company. Subsidiary CooperVision was founded in 1979 and is the 4th largest contact lens maker in the world and the number one manufacturer of toric lenses...
. The company's last publicly reported net sales, in the 2006 fiscal year, were US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
247 million.
First incorporated in February 1995, the company sued advertising software developer WhenU
WhenU
WhenU Save/SaveNow , developed by the company WhenU, is a piece of advertising software generally considered to be adware or spyware. The program delivers advertisements, compares shopping results and other offers to users' computers, and tracks their browsing habits...
in 2002 and entered a long-term agreement with Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
in 2008.
History
1-800 CONTACTS was founded in 1995 by Jonathan C. CoonJonathan C. Coon
Jonathan C. Coon is an American businessman who is the CEO and co-founder of 1-800 Contacts. He received his B.A. in Advertising and Public Relations in 1994 from Brigham Young University. While a student there, Coon created a small business selling contact lenses to other students...
and John F. Nichols, and first incorporated in February that year. As the company's 2005 10-K
Form 10-K
A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission , that gives a comprehensive summary of a public company's performance...
report states, "Mr. Nichols is a certified optician in the State of California and was the owner of the Discount Lens Club from 1991 until February 1995. Mr. Nichols worked with Bausch & Lomb as a Senior Sales Representative from 1989 to 1991."
In 2002, they acquired Lens Express
Lens Express
Lens Express was a direct-to-order company that sold contact lenses that were available over-the-phone, and also offered a free catalog. The company was well known for Lynda Carter appearing in its ads, including her famous trademark sayings such as "I wouldn't trust these baby blues to just...
.
Brand awareness
By utilizing a toll-free number as its brand, a consumer can instantly recognize the product, be directed to call for a purchase, and buy a product within minutes. It was hoped that consumers would more easily remember the company's phone number, and thus be more likely to become repeat customers. This concept is also evidenced by 1-800-Flowers1-800-Flowers
1-800-Flowers is a floral and gift retailer and distribution company in the United States. It was one of the first retailers to use a 24 x 7 toll-free telephone number and the Internet for direct sales to consumers....
, as they reportedly purchased their telephone number from a company that was deeply in debt. 1800Contacts.com is also a domain name owned by the company in which a customer may order online. The combined toll-free number and matching domain is called a "Toll-Free Domain" or a "Teledotcom
Teledotcom
A teledotcom is a domain name that not only spells a memorable word but also has a matching toll-free telephone number. This means the word that spells something will have a toll-free prefix and a top level domain extension after it...
" and is considered one of the most valuable branding properties.
Alliance with Wal-Mart
In January 2008, 1-800 CONTACTS entered a long-term agreement with Wal-Mart Stores Inc. to align their contact lens businesses.Pop-up ad lawsuit
1-800 CONTACTS sued WhenUWhenU
WhenU Save/SaveNow , developed by the company WhenU, is a piece of advertising software generally considered to be adware or spyware. The program delivers advertisements, compares shopping results and other offers to users' computers, and tracks their browsing habits...
over pop-up ad
Pop-up ad
Pop-up ads or pop-ups are a form of online advertising on the World Wide Web intended to attract web traffic or capture email addresses. Pop-ups are generally new web browser windows to display advertisements...
vertisments in 2002. In the suit against WhenU, which also named Vision Direct as a co-defendant, 1-800 CONTACTS alleged that the advertisements provided by WhenU, which advertised competitors of 1-800 CONTACTS(such as Vision Direct) when people viewed the company's web site, as "inherently deceptive" and one that "misleads users into falsely believing the pop-up advertisements supplied by WhenU.com are in actuality advertisements authorized by and originating with the underlying Web site".
In December 2003 Judge Deborah Batts of the United States District Court for the Southern District of New York
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...
granted a preliminary injunction, barring WhenU from delivering the advertisements to some web surfers, on the grounds that it constituted trademark infringement
Trademark infringement
Trademark infringement is a violation of the exclusive rights attaching to a trademark without the authorization of the trademark owner or any licensees...
violating the Lanham Act
Lanham Act
The Lanham Act is a piece of legislation that contains the federal statutes of trademark law in the United States. The Act prohibits a number of activities, including trademark infringement, trademark dilution, and false advertising.-History:Named for Representative Fritz G...
.
However, WhenU appealed, and the United States Court of Appeals for the Second Circuit
United States Court of Appeals for the Second Circuit
The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals...
held that WhenU's actions did not amount to the "use" that the Lanham Act requires in order to constitute trademark infringement. The appeal court reversed the preliminary injunction and ordered the dismissal of all claims made by 1-800 CONTACTS that were based upon trademark infringement, leaving the claims based upon unfair competition and copyright infringement. The District court had already found that 1-800 CONTACTS was unlikely to prevail in its copyright infringement claims, finding that "the conduct neither violated [the] plaintiff's right to display its copyrighted website, nor its right to create derivative works therefrom".
The Electronic Frontier Foundation
Electronic Frontier Foundation
The Electronic Frontier Foundation is an international non-profit digital rights advocacy and legal organization based in the United States...
criticized the case, stating that it was "not to help [people] fight off adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
and spyware
Spyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
" but was rather intended to allow companies "to gain control over [a computer's] desktop
Desktop environment
In graphical computing, a desktop environment commonly refers to a style of graphical user interface derived from the desktop metaphor that is seen on most modern personal computers. These GUIs help the user in easily accessing, configuring, and modifying many important and frequently accessed...
", where the legal principles being employed "would create a precedent that would enable trademark owners to dictate what could be open on your desktop when you visit their websites". At the time of the appeal it filed an amicus curiae
Amicus curiae
An amicus curiae is someone, not a party to a case, who volunteers to offer information to assist a court in deciding a matter before it...
brief urging the Appeals Court to limit the reach of the "initial interest confusion" doctrine that had been applied by the District Court.