|This article needs additional citations for verification. (October 2009)|
|Industry||contact lens retail|
|Key people||Jonathan C. Coon, CEO
Brian Bethers, President
Rob Hunter, CFO
Joe Zeidner General Counsel
|Revenue||$237 million (2005)|
|Operating income||$5.7 million (2005)|
|Net income||($2.6 million) (2005)|
|Employees||680 (as of August 12, 2007)|
1-800 Contacts is a company based in Draper, Utah that sells various brands of contact lenses, including Johnson & Johnson Vision Care, Ciba Vision, Bausch & Lomb and CooperVision. The company was first incorporated in 1995. In 2006, its last year as a public company, the company reported net sales of US$ 247 million. In 2008, 1-800 CONTACTS entered into a partnership with Wal-Mart, which ended in 2013. In June 2012, WellPoint acquired 1-800 Contacts from Fenway Partners.
1-800 CONTACTS was founded in 1995 by Jonathan C. Coon and John F. Nichols, and first incorporated in February that year. As the company's 2005 10-K 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."
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-Flowers, 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" 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. The alliance partnership ended January 1, 2013.
Pop-up ad lawsuit
1-800 CONTACTS sued WhenU over pop-up advertisments 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 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.
However, 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. 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 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.
Other Trademark Infringement Lawsuits
In addition to the WhenU case, 1-800 CONTACTS has been involved in a number of trademark infringement suits revolving around the issue of keyword advertising. On March 8, 2010, 1-800 CONTACTS sued Contact Lens King, Inc. 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.
Patent Infringement Lawsuit
On April 17, 2013 the Electronic Frontier Foundation claimed that 1-800 Contacts is abusing 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” and asked its followers to help DITTO by crowdsourcing prior art.
- 2005 10-K Report, accessed October 13, 2006
- "company website". 1-800 Contacts. Archived from the original on 18 August 2007. Retrieved 12 August 2007.
- 1-800-CONTACTS, Wal-Mart announce a long-term pact
- WellPoint Acquires 1-800 Contacts
- "1-800 CONTACTS to Acquire Lens Express and Lens 1st". Camelot Ventures Group. 2002-12-16. Retrieved 29 November 2011.
- 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.
- 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
- Stefanie Olsen (2004-01-05). "Pop-up seller loses round in court". CNET News.com. Archived from the original on 15 September 2006. Retrieved 12 October 2006.
- 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 24 September 2006. Retrieved 12 October 2006.
- Martin H. Samson. "1-800 CONTACTS, Inc. v. WhenU.Com and Vision Direct, Inc.". Phillips Nizer LLP Internet Library of Law and Court Decisions. Retrieved 12 October 2006.
- "1-800 CONTACTS v. WhenU". Electronic Frontier Foundation. Archived from the original on 14 October 2006. Retrieved 12 October 2006.
- Inside Trademarks, , March 13, 2010
- 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.