1-800 Contacts
| Company type | Private |
|---|---|
| Industry | Retail (contact lenses) |
| Founded | 1995 |
| Founder | Jonathan C. Coon, John F. Nichols |
| Headquarters | Draper, Utah , United States |
Area served | United States |
| Products | Contact lenses, eyewear, online prescription renewals, AquaSoft Daily contact lenses |
| Parent | AEA Investors (controlling interest since 2015) |
| Website | 1800contacts |
1-800 Contacts Inc. is a U.S.-based retailer specializing in contact lenses, with its headquarters located in Draper, Utah. The company offers products from prominent manufacturers such as Johnson & Johnson Vision Care, Alcon, Bausch & Lomb, and CooperVision. Established as the pioneer in online contact lens retailing, it has broadened its services to include online prescription renewals, eyewear, lens replacements, and its own AquaSoft Daily contact lenses. In 2006, which marked its last year as a publicly traded entity, 1-800 Contacts recorded net revenues of $247 million.
History
Launched in 1995 by entrepreneurs Jonathan C. Coon and John F. Nichols, 1-800 Contacts went public on NASDAQ in 1998 under the ticker CTAC, generating $27.5 million by issuing shares at $12.50 each. Growth was accelerated through acquisitions, notably the purchase of Lens Express in 2002.
The company's ownership changed hands several times: it was bought by Fenway Partners in 2007 at $24.25 per share; later acquired by WellPoint (now Anthem) in 2012; followed by a sale to Thomas H. Lee Partners in 2013, with glasses.com being divested separately to Luxottica. In 2015, a controlling interest was obtained by AEA Investors.
Among its strategic alliances was a 2008 deal with Walmart that combined contact lens sales with Walmart’s in-store eye care services; this partnership concluded in 2013. That same year, leveraging ownership of the domain since 1999, 1-800 Contacts introduced glasses.com to extend its eyewear portfolio, incorporating advanced features such as 3D Fit technology.
Liingo
In 2017, 1-800 Contacts expanded by acquiring Liingo, an eyewear brand established in October 2016 and headquartered in Draper, Utah.
6over6
The company further enhanced its digital health capabilities in 2019 through the acquisition of 6over6, a technology platform that allows consumers to conduct vision assessments remotely via computers or smartphones.
Ditto
In 2021, the acquisition of Ditto enabled 1-800 Contacts to utilize virtual try-on technology and deliver personalized frame suggestions to customers.
WhenU lawsuit
In 2002, 1-800 Contacts filed suit against WhenU over pop-up ads promoting competitors such as Vision Direct that appeared when users accessed its website. The company argued these advertisements were misleading and infringed on its trademarks under the Lanham Act. A preliminary injunction issued in 2003 restricted WhenU from displaying certain ads; however, this decision was overturned by the Second Circuit Court, which dismissed trademark infringement claims and left only allegations of unfair competition and copyright violations.
The district court concluded that 1-800 Contacts was unlikely to prevail on the copyright issues. The Electronic Frontier Foundation criticized the litigation for potentially allowing corporations to exert control over users’ desktop environments through trademark law.
Beyond this case, 1-800 Contacts pursued additional trademark infringement actions concerning keyword advertising. In 2010, it initiated legal proceedings against Contact Lens King for using "1-800 CONTACTS" trademarks as keywords that triggered advertisements redirecting consumers to Contact Lens King's offerings.
Lens.com lawsuit
1-800 Contacts engaged in several legal battles with Lens.com, Inc., including a trademark cancellation dispute where the U.S. Court of Appeals ruled that Lens.com's "LENS" trademark for "computer software" had been abandoned because it was only utilized for selling contact lenses online without consumer recognition linking it to software.
In a 2013 decision, the Tenth Circuit held that Lens.com did not infringe on 1-800 Contacts' registered trademark by purchasing search ads triggered by the keyword "1800 CONTACTS." Subsequently, in August 2016, the Federal Trade Commission (FTC) filed a complaint alleging that 1-800 Contacts’ enforcement of its trademarks in search advertising unlawfully limited competition; the company denied any misconduct. On June 11, 2021, the Second Circuit vacated the FTC’s complaint.
Lawsuits Involving DITTO and the FTC
In April 2013, the Electronic Frontier Foundation criticized 1-800 Contacts for allegedly misusing patent law in its legal action against DITTO. The organization characterized 1-800 Contacts as a patent troll employing expensive litigation tactics to hinder competitors and advocated for the use of crowdsourced prior art to support DITTO’s defense.
By August 2016, the Federal Trade Commission (FTC) filed charges against 1-800 Contacts, the leading online contact lens retailer in the United States, accusing it of coordinating anti-competitive arrangements with no fewer than fourteen competing sellers. These agreements were aimed at limiting competition within online search advertising auctions conducted on platforms such as Google and Bing. The FTC’s complaint asserted that these deals suppressed price competition and curtailed truthful advertising, thereby breaching federal regulations.
In October 2017, Chief Administrative Law Judge D. Michael Chappell affirmed the FTC’s allegations, determining that 1-800 Contacts had engaged in unlawful coordination with competitors to restrict competition. The ruling prohibited 1-800 Contacts from limiting other sellers’ involvement in search advertising auctions or controlling their use of keywords and negative keywords. Furthermore, it forbade any agreements that restricted honest, non-misleading advertising or promotional activities and mandated the discontinuation of enforcing any contractual terms that conflicted with this directive.