1-800 Contacts

Last updated
1-800 Contacts Inc.
Company type Private
Industry Contact lens retail
FoundedFebruary 1995;29 years ago (1995-02)
Founders Jonathan C. Coon
John F. Nichols
Headquarters Draper, Utah, U.S.
Key people
John Graham, CEO
Phil Bienert, President, CMO
Brett Gappmayer, CFO
Douglas Harris, COO
Amy Larson, President, New Business
Roy Montclair, General Counsel
ProductsContact lenses
Revenue$237 million (2005) [1]
$5.7 million (2005) [1]
$2.6 million (2005) [1]
Owners KKR
Website 1800contacts.com
Former 1-800 Contacts headquarters in Draper 1800contactsheadquarters.jpg
Former 1-800 Contacts headquarters in Draper

1-800 Contacts Inc. is an American contact lens retailer based in Draper, Utah. The brands that 1-800 Contacts use includes Johnson & Johnson Vision Care, Alcon, Bausch & Lomb and CooperVision. The company was founded as the industry's first way to buy contacts online and has since expanded to provide online prescription renewals, glasses, lens replacements, and the in-house AquaSoft Daily contact lenses brand. In 2006, its last year as a public company, the company reported net sales of US$247 million. [2]

Contents

History

1-800 Contacts was founded in 1995 by Jonathan C. Coon and John F. Nichols, and was incorporated in February that year. The company held an IPO in 1998 on NASDAQ with the symbol CTAC with an offer price of $27.5M and share price of $12.50. [3] They acquired Lens Express in 2002. [4]

Over the years, 1-800 Contacts has been owned by several companies. In June 2007, 1-800 Contacts was acquired by Fenway Partners for $24.25 per share. [5] In June 2012, 1-800 Contacts was sold to WellPoint (now Anthem). [6] In 2013 Wellpoint sold 1-800 Contacts to Thomas H. Lee Partners and glasses.com to Luxottica. [7] AEA Investors acquired a majority interest in 1-800 Contacts in December 2015. [8]

In 2008, 1-800 Contacts entered into a partnership with Walmart to integrate phone and Internet orders for contact lenses with eye-doctor services and operations in Walmart's stores, [9] The agreement ended in 2013. In June 2013, 1-800 Contacts launched glasses.com, a domain which the company has held since 1999. [10]

In 2020, global investment firm KKR acquired the company from AEA Investors. The sale follows many years of strong growth and technology innovation for the vision brand. [11]

Direct-to-Consumer Business Model

As one of the first direct-to-consumer models in the vision industry, 1-800 Contacts has spent the past 25 years providing direct access to contact lens at competitive prices for consumers. It offers a "Gajillion Percent Promise" on millions of contact lens in stock with a best-price guarantee. [12] The company added ExpressExam, which takes 10 minutes to get a doctor-issued prescription within 24 hours.The brand hopes to make vision access easier for everyone at affordable prices.

Brand awareness

1-800 Contacts' mascot is Seymour, the eye guy. He is an eyeball with arms and legs that is often seen in marketing communications and throughout 1-800 Contacts workplaces. [13] [14]

The "My Brand" commercial is 1-800 Contacts' most well known commercial and has become a cult classic due to a gaming meme in 2012. [15] The reenactment of the commercial has the characters Tali and Commander Shepherd from the sci-fi video game series Mass Effect. [16]

Acquisitions

Liingo

In 2017, 1-800 Contacts acquired Liingo, which is an eyewear brand. [17] Liingo Eyewear was founded in October 2016, in Draper, Utah.

6over6

In 2019, 1-800 Contacts acquired 6over6, which is a digital healthcare technology that enables consumers to perform their own vision tests from anywhere using a computer or smartphone. [18]

Ditto

In 2021, 1-800 Contacts acquired Ditto. [19] Ditto's technology allows shoppers to realistically try-on eyewear and receive frame recommendations.

Lawsuits

WhenU lawsuit

1-800 Contacts sued WhenU over pop-up advertisements in 2002. [20] In the suit against WhenU, which also named Vision Direct as a co-defendant, [21] 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". [20]

In December 2003, Judge Deborah Batts of the United States District Court for the Southern District of New York granted a preliminary injunction, barring WhenU from delivering the advertisements to some web surfers, on the grounds that it constituted trademark infringement violating the Lanham Act. [22] WhenU appealed, and the United States Court of Appeals for the Second Circuit held that WhenU's actions did not amount to the "use" that the Lanham Act requires in order to constitute trademark infringement.

The appeals 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. [23] 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". [24]

The Electronic Frontier Foundation criticized the case, stating that it was "not to help [people] fight off adware and spyware" but was rather intended to allow companies "to gain control over [a computer's] desktop", 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 brief urging the Appeals Court to limit the reach of the "initial interest confusion" doctrine that had been applied by the District Court. [25]

In addition to the WhenU case, 1-800 Contacts has been involved in other trademark infringement suits revolving around the issue of keyword advertising. On March 8, 2010, 1-800 Contacts sued Contact Lens King, Inc. Ezcontacts.com for trademark infringement based on their use of "1-800 CONTACTS" trademarks as keywords to trigger sponsored ads directing consumers to Contact Lens King's website and products. [26]

Lens.com lawsuit

1-800 Contacts was also involved in several lawsuits against Lens.com, Inc., including a trademark cancellation case in the United States Court of Appeals for the Federal Circuit, Lens.com, Inc. v. 1-800 Contacts, Inc., in which the Court determined that Lens.com's trademark "LENS", held in connection with "computer software", had been abandoned because Lens.com merely used software to sell contact lenses over the internet, while consumers had no association between the trademark and computer software.

In 2013, the Tenth Circuit Court of Appeals held that Lens.com did not commit trademark infringement when it purchased search advertisements using 1-800 Contacts' federally registered 1800 CONTACTS trademark as a keyword. In August 2016, the Federal Trade Commission filed an administrative complaint against 1-800 Contacts alleging, among other things, that its search advertising trademark enforcement practices have unreasonably restrained competition in violation of the FTC Act. 1-800 Contacts has denied all wrongdoing. [27] On June 11, 2021, the Second Circuit vacated the FTC's request. [28] [29]

DITTO and FTC lawsuits

On April 17, 2013, the Electronic Frontier Foundation claimed that 1-800 Contacts abused patent law by acting like a patent troll in its lawsuit against DITTO. In a blog post, the EFF accused 1-800 Contacts of "leveraging the massive expense of patent litigation to squelch the competition" [30] and asked its followers to help DITTO by crowdsourcing prior art.

On August 8, 2016, the Federal Trade Commission filed an administrative complaint charging that 1-800 Contacts, the largest online retailer of contact lenses in the United States, unlawfully orchestrated a web of anti-competitive agreements with rival online contact lens sellers that suppress competition in certain online search advertising auctions and that restrict truthful and non-misleading internet advertising to consumers.

According to the administrative complaint, 1-800 Contacts entered into bidding agreements with at least 14 competing online contact lens retailers that eliminate competition in auctions to place advertisements on the search results page generated by online search engines such as Google and Bing. The complaint alleges that these bidding agreements unreasonably restrain price competition in internet search auctions, and restrict truthful and non-misleading advertising to consumers, constituting an unfair method of competition in violation of federal law.

In an initial decision entered on October 27, 2017, and announced on October 30, 2017, Chief Administrative Law Judge D. Michael Chappell upheld a Federal Trade Commission complaint against 1-800 Contacts, ruling that the FTC has proved that the nation's largest online retailer of contact lenses unlawfully orchestrated a web of anti-competitive agreements with rival online contact lens sellers. [31]

An order Judge Chappell included with the initial decision would bar 1-800 Contacts from agreeing with a marketer or seller of any contact lens product to restrict, prohibit, regulate or otherwise limit that seller's participation in search advertising auctions, and would also bar 1-800 Contacts from instructing search engines to restrict or prohibit any seller's use of any keyword (a word or phrase used to instruct a search engine to display specified search advertising), or to require any seller to use any negative keyword (a word or phrase used to instruct a search engine not to display specified search advertising). [32]

Also under the order, 1-800 Contacts would be barred from agreeing with a seller to restrict, prohibit, regulate or otherwise limit that seller's use of truthful, non-deceptive, and non-trademark-infringing advertising or promotion. The order would also require the company to stop enforcing or attempting to enforce any and all provisions, terms, or requirements in any existing agreement or court order that impose a condition on a seller that would be inconsistent with the order. [33]

Related Research Articles

<span class="mw-page-title-main">Google Ads</span> Online advertising platform owned by Google

Google Ads is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, and videos to web users. It can place ads in the results of search engines like Google Search, mobile apps, videos, and on non-search websites. Services are offered under a pay-per-click (PPC) pricing model.

<span class="mw-page-title-main">Yahoo Native</span> Internet advertising service provided by Yahoo

Yahoo! Native is a native "Pay per click" Internet advertising service provided by Yahoo.

America's Best Contacts & Eyeglasses is a discount provider of eye examinations, eyeglasses and contact lenses, with over 1000 retail locations in the United States as of May 31, 2024. The millennial store is located in Philadelphia, PA, which happened to be one of National Vision's first markets in their early days over 40 years ago. From 2005 to 2014, America's Best was a division of National Vision, a privately held portfolio company owned by Berkshire Partners. In 2014, National Vision, Inc, was sold to KKR.

Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate search engine optimization (SEO), which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings and increase the Call to action (CTA) on the website.

<span class="mw-page-title-main">JR Cigars</span> Tobacco retailer

800-JR Cigar, Inc., more commonly known as JR Cigar or JRCigars.com, is one of the largest wholesalers and retailers of cigars, cigar related products and pipe tobacco in the United States. The company originated as a cigar shop in Manhattan but now chiefly operates through on-line and catalog sales; however, the company maintains three retail outlets in North Carolina, two in New Jersey, as well as a retail locations in Manhattan (closed), Washington DC, and Detroit, MI.

Keyword advertising is a form of online advertising in which an advertiser pays to have an advertisement appear in the results listing when a person uses a particular phrase to search the Web, typically by employing a search engine. The particular phrase is composed of one or more key terms that are linked to one or more advertisements. The most common form or keyword advertising, focused on payment methods, is pay per click (PPC), with other forms being cost per action (CPA) or cost per mille (CPM).

In Internet marketing, search advertising is a method of placing online advertisements on web pages that show results from search engine queries. Through the same search-engine advertising services, ads can also be placed on Web pages with other published content.

<span class="mw-page-title-main">Initial interest confusion</span> Trademark law doctrine

Initial interest confusion is a legal doctrine under trademark law that permits a finding of infringement when there is temporary confusion that is dispelled before the purchase is made. Generally, trademark infringement is based on the likelihood of confusion for a consumer in the marketplace. This likelihood is typically determined using a multi-factor test that includes factors like the strength of the mark and evidence of any actual confusion. However, trademark infringement that relies on Initial interest confusion does not require a likelihood of confusion at the time of sale; the mark must only capture the consumer's initial attention.

<i>Google, Inc. v. American Blind & Wallpaper Factory, Inc.</i> Legal case

Google, Inc. v. American Blind and Wallpaper Factory, Inc., No. 5:03-cv-05340, was a decision of the United States District Court for the Northern District of California that challenged the legality of Google's AdWords program. The court concluded that, pending the outcome of a jury trial, Google AdWords may be in violation of trademark law because it (1) allowed arbitrary advertisers to key their ads to American Blind's trademarks and (2) may confuse search-engine users initially interested in visiting American Blind's website into visiting its competitors' websites.

<i>Rescuecom Corp. v. Google Inc.</i> American legal case

Rescuecom Corp. v. Google Inc., 562 F.3d 123, was a case at the United States Court of Appeals for the Second Circuit, in which the court held that recommending a trademark for keyword advertising was a commercial use of the trademark, and could constitute trademark infringement.

<i>1-800 Contacts, Inc. v. WhenU.com, Inc.</i> American legal case

1-800 CONTACTS v. WhenU.com was a legal dispute beginning in 2002 over pop-up advertisements. It was brought by 1-800 Contacts, an online distributor of various brands of contact lenses against WhenU SaveNow, a maker of advertising software. The suit also named Vision Direct, one of WhenU advertising customers, as a co-defendant. 1-800 CONTACTS alleged that the advertisements provided by WhenU, which advertised competitors of 1-800 CONTACTS when people viewed the company's web site, were "inherently deceptive" and that one of the advertisements "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".

<i>Network Automation, Inc. v. Advanced Systems Concepts, Inc.</i> Court case decided on March 8, 2011

Network Automation, Inc. v. Advanced Systems Concepts, Inc., 638 F.3d 1137 was a court case decided on March 8, 2011, where the United States Court of Appeals for the Ninth Circuit ruled that the use of a competitor's trademark as an Internet search advertising keyword did not constitute trademark infringement. In the case, Network Automation advertised their own competing product in search queries that contained Advanced Systems Concepts' "ActiveBatch" trademark. In determining whether trademark infringement occurred, the court evaluated factors relevant to the likelihood of customer confusion outlined in AMF Inc. v. Sleekcraft Boats and concluded that confusion was unlikely.

<i>Tiffany (NJ) Inc. v. eBay Inc.</i> American legal case

Tiffany (NJ) Inc. v. eBay Inc. 600 F.3d 93, was a landmark case in which the United States Court of Appeals for the Second Circuit first addressed contributory trademark infringement in the context of online marketplaces.

Ditto was a company that sold software that enabled eyewear companies to sell their products online using virtual fitting. Originally Ditto was a retailer that sold designer prescription eyeglasses and sunglasses. The company was originally based in San Francisco, CA before moving to Oakland, CA in 2018. It used virtual fitting technology to let customers try on eyeglass frames from a computer. The technology measured a customer's face by homing in on pupils, ears, cheekbones, ears and other facial landmarks, and then produced images of dozens of different pairs of glasses that might be a good fit.

Roger Vincent Hardy is a Canadian Internet entrepreneur and businessman. He is the chairman, and CEO of Hardy Capital. He is also Chairman and co founder of Kits Eyecare, Kits. A public company listed on the Toronto Stock Exchange. Hardy is also the co-founder and former chairman, and CEO of Coastal Contacts Inc., the leading manufacturer and online retailer of eyewear products. The Coastal Contacts Inc.’s family of websites includes Coastal.com, ClearlyContacts.ca, Clearly.com.au, Clearly.co.nz, Lensway.co.uk and ContactSan.com.

Frames Direct is an international online eyewear retailer owned by EssilorLuxottica. The company sells eyewear products such as eyeglasses, prescription sunglasses, sunglasses, and contact lenses through its website, https://www.framesdirect.com. Frames Direct sells designer and brand-name eyewear products with over 50,000 models. Founded in 1996, Frames Direct was one of the earliest online optical retail stores and the first to sell prescription sunglasses online.

Lens.com, Inc. v. 1-800 Contacts, Inc., 686 F.3d 1376, is a decision by the United States Court of Appeals for the Federal Circuit which ruled that when software merely acts as a "conduit" for providing services over the internet, and does not have an independent value per se, it does not constitute a "good" being "sold or transported in commerce" for the purposes of establishing whether or not a trademark for "computer software" has been "abandoned" under 15 U.S.C. § 1064 and 15 U.S.C. § 1127

<i>Rosetta Stone Ltd. v. Google, Inc.</i> U.S. court decision

Rosetta Stone v. Google, 676 F.3d 144 was a decision of the United States Court of Appeals for the Fourth Circuit that challenged the legality of Google's AdWords program. The Court overturned a grant of summary judgment for Google that had held Google AdWords was not a violation of trademark law.

<span class="mw-page-title-main">Clearly</span> Canadian online/offline retailer of eyeglasses owned by EssilorLuxottica

Clearly is an online retailer of contact lenses, eyeglasses and sunglasses headquartered in Vancouver, British Columbia. The company, founded in 2000, is a subsidiary of the French lens manufacturer Essilor, which acquired it in 2014. Essilor merged with Luxottica in 2018 to form EssilorLuxottica, thus making Clearly a subsidiary of the new entity. Clearly is one of the largest online contact lens retailers in North America, and the largest seller of prescription eyeglasses online in the world.

Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08), also known as Google v Louis Vuitton was a landmark decision in which the European Court of Justice (ECJ) held that search engines operators such as Google do not themselves infringe trademark rights if they allow advertisers to use a competitor's trademark as a keyword.

References

  1. 1 2 3 2005 10-K Report, accessed October 13, 2006
  2. ↑ "company website". 1-800 Contacts. Archived from the original on 18 August 2007. Retrieved 12 August 2007.
  3. ↑ "1-800 Contacts CTAC IPO". NASDAQ. Retrieved 23 March 2017.
  4. ↑ "1-800 Contacts to Acquire Lens Express and Lens 1st". Camelot Ventures Group. 2002-12-16. Archived from the original on 2011-10-31. Retrieved 29 November 2011.
  5. ↑ "1-800 Contacts to be acquired by Fenway Partners for $24.25 per share". Reuters . June 4, 2007.
  6. ↑ Rusli, Evelyn M. (June 4, 2012). "WellPoint Acquires 1-800 Contacts". DealBook. Archived from the original on September 24, 2015.
  7. ↑ "WellPoint Agrees to Sell 1-800-Contacts to Thomas H. Lee". bloomberg.
  8. ↑ "AEA acquires majority interest in 1-800 CONTACTS". December 30, 2015.
  9. ↑ "1-800-Contacts, Wal-Mart announce a long-term pact". DeseretNews.com. January 18, 2008. Archived from the original on October 9, 2016.
  10. ↑ "Glasses.com releases 3D Fit Technology". Archived from the original on 2018-01-28. Retrieved 2017-03-23.
  11. ↑ "KKR to Acquire DTC Pioneer 1-800 Contacts from AEA Investors". www.prnewswire.com. Retrieved 2022-07-19.
  12. ↑ "Gajillion Percent Promise". www.1800contacts.com. Retrieved 2022-07-19.
  13. ↑ "Torn lenses, they happen. But they don't have to. 😉 Swipe through to read how to prevent torn contact lenses". Instagram. Retrieved 2022-07-19.
  14. ↑ "Thanks @theoldgays for the good vibes and dance moves. ❤️". Instagram. Retrieved 2022-07-19.
  15. ↑ My Brand: 1 800 Contacts Special Eyes , retrieved 2022-07-19
  16. ↑ "My Brand". Know Your Meme. 17 January 2013. Retrieved 2022-07-19.
  17. ↑ "Liingo Eyewear Acquired by 1-800 Contacts". www.prnewswire.com. Retrieved 2022-07-19.
  18. ↑ "1-800 Contacts acquires revolutionary tech company 6over6 Vision". www.1800contacts.com. 2020-02-12. Retrieved 2022-07-19.
  19. ↑ "Updated: 1-800 Contacts Acquires Ditto". mobile.visionmonday.com. Retrieved 2022-07-19.
  20. 1 2 Christopher Saunders (2002-10-14). "U-Haul, 1-800 Contacts Join Anti-Pop-Up Bandwagon". ClickZ News. Incisive Interactive Marketing LLC. Archived from the original on 13 October 2006. Retrieved 12 October 2006.
  21. ↑ 1-800 Contacts, Inc. v. WhenU.Com and Vision Direct, Inc. 309 F.Supp.2d 467 (S.D.N.Y., 2003-12-22), reversed in part and remanded, F.3d—2d. Cir., 2005-06-27
  22. ↑ Stefanie Olsen (2004-01-05). "Pop-up seller loses round in court". CNET News.com. Archived from the original on 14 July 2014. Retrieved 12 October 2006.
  23. ↑ Chloe Hecht (2005-09-25). "Court Sees Clearly Now: "Use" in 1 800-Contacts, Inc. v. WhenU.Com, Inc. and Vision Direct, Inc". Chilling Effects. Archived from the original on 2006-09-24. Retrieved 12 October 2006.
  24. ↑ Martin H. Samson. "1-800 Contacts, Inc. v. WhenU.Com and Vision Direct, Inc". Phillips Nizer LLP Internet Library of Law and Court Decisions. Archived from the original on 2004-04-27. Retrieved 12 October 2006.
  25. ↑ "1-800 Contacts v. WhenU". Electronic Frontier Foundation. Archived from the original on 14 October 2006. Retrieved 12 October 2006.
  26. ↑ "1-800 Contacts, Inc. v. Contact Lens King, Inc". Inside Trademarks. Archived from the original on 2019-12-19. Retrieved 2010-03-14.
  27. ↑ David O. Klein & Joshua R. Wueller, Trademark Enforcement and Internet Search Advertising: A Regulatory Risk for Brand Owners, IP Litigator, Nov./Dec. 2016. SSRN   2897528
  28. ↑ "1-800 Contacts, Inc, In the Matter of". Federal Trade Commission. 2016-08-08. Retrieved 2023-12-21.
  29. ↑ "Second Circuit Holds That 1-800 Contacts Lawfully Protected Its Trademark In Online Search Auctions". Shearman & Sterling. 2021-06-15. Retrieved 2023-12-21.
  30. ↑ Nazer, Daniel; Samuels, Julie (2013-04-22). "Updated: Help Stop 1-800-Contacts from Abusing Patents to Squelch Competition". Electronic Frontier Foundation. Retrieved 2013-05-23.
  31. ↑ "Initial Decision by ALJ D. Michael Chappell" (PDF).
  32. ↑ "Id. at 203" (PDF).
  33. ↑ "Id. at 204" (PDF).
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.