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Lens.com v. 1-800 Contacts Antitrust Complaint

Lens.com v. 1-800 Contacts Antitrust Complaint

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Published by Eric Goldman

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Published by: Eric Goldman on Jun 26, 2011
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08/10/2011

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Lewis and Roca LLP3993 Howard Hughes ParkwaySuite 600Las Vegas, Nevada 89169
Michael J. McCue (Nevada Bar No. 6055)mmccue@LRLAW.comJohn L. Krieger (Nevada Bar No. 6023) jkrieger@LRLAW.comLEWIS AND ROCA LLP3993 Howard Hughes Parkway, Ste. 600Las Vegas, Nevada 89169Tel: (702) 949-8200Fax: (702) 949-8363David D. Weinzweig (
 pro hac vice
application to be submitted)dweinzweig@LRLAW.comLEWIS AND ROCA LLP40 North Central AvenuePhoenix, Arizona 85004Tel: (602) 262-5311Fax: (602) 262-5358Attorneys for Plaintiff LENS.COM, INC.
UNITED STATES DISTRICT COURTDISTRICT OF NEVADA
LENS.COM, INC., a Nevada corporation,Plaintiff,vs.1-800 CONTACTS, INC., a Delawarecorporation,Defendant.))))))))))))
COMPLAINTJURY DEMAND
For its Complaint against defendant 1-800 Contacts, Inc. (“1-800”), plaintiff Lens.com,Inc. (“Lens”) alleges as follows:
NATURE OF ACTION
1.
 
1-800 has long fashioned itself as a champion of consumers and an outspoken advocatefor open and robust competition. 1-800 has emphasized, in particular, the importance of informedconsumers who understand their alternatives. Indeed, in its protracted battle with eye carepractitioners and manufacturers, 1-800 often decried the conduct of entrenched business interests
Case 2:11-cv-00918 Document 1 Filed 06/06/11 Page 1 of 46
 
 
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that zealously guarded their pecuniary self-interest at the expense of meaningful consumer choiceand greater competition.2.
 
It was all a ruse. This lawsuit is about 1-800’s bold and unlawful crusade to obtainor maintain its dominant position in the direct-to-consumer market for replacement contact lenses,and the horizontal agreements that 1-800 extracted from its direct competitors to restrict outputand restrain trade. Notwithstanding its carefully crafted image, 1-800 has battled to censor andimpede the universe of information that can be passed on to consumers; and conspired to ensurethat consumers never taste the fruits of competition.3.
 
1-800 has engaged in a host of anticompetitive practices to obtain or maintain itsmarket dominance, restrict output and otherwise restrain trade, including:a)
 
1-800 has manufactured a fictional collection of trademark rights and bulliedits competitors with false accusations of trademark infringement and frivolous litigation.b)
 
1-800 has extracted horizontal agreements from its competitors, under threatof litigation, to restrain trade and reduce output. While fashioned as “settlements” of 1-800’strademark infringement accusations, these horizontal agreements represent nothing but 1-800’snaked and unjustified power grab. The onerous terms in these horizontal agreements far exceedthe scope of 1-800’s actual limited trademark rights and afford greater relief to 1-800 than 1-800could ever hope to achieve in litigation. Competitors do not account for merit in their decision toenter the settlements, but instead hope to avoid the crushing burden of 1-800’s litigation apparatus.Unlike 1-800, most of these competitors lack the size and strength to survive an extensivetrademark battle.c)
 
1-800 understood and lamented the actual scope of its limited trademark rights, and knew that its demands far outstripped its actual trademark rights. 1-800 wasnevertheless convinced that its competitors in the Relevant Market could not afford to fight 1-800,which meant that 1-800 need not concern itself with actual trademark rights; 1-800 could insteadenforce the trademark rights it dreamed of.d)
 
1-800 sued all competitors who had the temerity to refuse its demands.Between 2005 and 2010 alone, 1-800 filed over 15 repetitive, predominantly sham lawsuits
Case 2:11-cv-00918 Document 1 Filed 06/06/11 Page 2 of 46
 
 
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against its competitors. In these lawsuits, 1-800 asserted objectively baseless claims against itscompetitors without regard to merits and without a genuine interest in redressing grievances, butrather to harass, neutralize and vanquish its competition. From extensive practice, 1-800’slitigation apparatus has become a well-oiled machine. Indeed, 1-800 now has a form complaintfor its frequent lawsuits against competitors, which is always at the ready and requires little morethan a new caption from lawsuit to lawsuit.e)
 
When Lens refused to accede to 1-800’s demands, 1-800 unleashed thelitigation equivalent of a thermonuclear war in response to the damage equivalent of a hangnail.The district court determined that 1-800’s infringement claim, if successful, might have fetchedtwenty dollars and fifty-one cents ($20.51) in lost profits. Nonetheless, 1-800 poured enormousfinancial and other resources into the lawsuit, and pursued scorched-earth tactics usually reservedfor bet-the-company litigation. In the end, upon information and belief, 1-800 spent around$1,100,000 in attorneys’ fees to chase $20.51 in damages.f)
 
In late 2010, the district court tossed 1-800’s lawsuit against Lens in acomprehensive 65-page decision. By then, however, 1-800 had achieved its objective. Lens hadincurred in excess of $1,400,000 in litigation fees and expenses to defend against 1-800’sfrivolous infringement claims.g)
 
Undeterred, 1-800 now hopes to revive its lawsuit and extend the pain basedupon “new evidence.” Once again, however, 1-800 has no basis for its argument. The federalcourt dismissed 1-800’s lawsuit on December 14, 2010, while its so-called “new evidence” is fromNovember 30, 2009.4.
 
1-800’s anticompetitive behavior has violated state and federal antitrust laws, theLanham Act and Nevada common law. Lens files this lawsuit to stop 1-800’s misconduct andanticompetitive practices; to recover compensatory and treble damages; and to obtain injunctiveand other equitable relief. Lens further seeks declaratory relief in connection with 1-800’sasserted trademark rights. ///  /// 
Case 2:11-cv-00918 Document 1 Filed 06/06/11 Page 3 of 46

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