1-800 Contacts, Inc. v. JAND, Inc., DBA Warby Parker

119 F.4th 234

• Court: Court of Appeals for the Second Circuit
• Decided: October 8, 2024
• Docket: 22-1634
• Status: Published

Opinion

22-1634-cv 1-800 Contacts, Inc. v. JAND, Inc., DBA Warby Parker

In the United States Court of Appeals for the Second Circuit ___________________________

August Term 2022 No. 22-1634

1-800 CONTACTS, INC.,

Plaintiff-Appellant,

v.

JAND, INC., DBA WARBY PARKER,

Defendant-Appellee.

___________________________

On Appeal from the United States District Court for the Southern District of New York ___________________________

(Argued June 9, 2023; Decided October 8, 2024)

Before: CHIN, CARNEY, and LEE, Circuit Judges.

Plaintiff-Appellant 1-800 Contacts, Inc., appeals from a judgment entered in the United States District Court for the Southern District of New York (Castel, J.), granting a motion for judgment on the pleadings in favor of Defendant-Appellee JAND, Inc., d.b.a. Warby Parker. The Complaint alleges that Defendant-Appellee used Plaintiff-Appellant’s trademarks—its brand name 1-800-Contacts and related variations—in keyword search advertisements in violation of the federal Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and New York State common law. Defendant- Appellee allegedly engaged in a plan to purchase search engine keywords consisting of Plaintiff-Appellant’s trademarks for use as keywords in online advertising campaigns and then designed misleading paid advertisements, so that customers searching for Plaintiff-Appellant’s website by typing “1-800-Contacts” into a web browser would be diverted to Defendant-Appellee’s website instead. However, Plaintiff-Appellant does not claim that Defendant-Appellee actually used the former’s trademarks other than purchasing them as keywords in the online search engine auctions.

We now reiterate that the mere act of purchasing a search engine keyword that is a competitor’s trademark does not alone, in the context of keyword search advertising, constitute trademark infringement. Upon examination of the remaining allegedly infringing components of Defendant-Appellee’s search advertising campaign—i.e., the resulting advertisement itself and landing webpage linked within, neither of which displays 1-800-Contact’s trademarks— we conclude that Plaintiff-Appellant failed to plausibly allege any likelihood of consumer confusion under this Circuit’s test in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961). Thus, we AFFIRM the district court’s judgment. ___________________________

STEPHEN R. FISHBEIN, Shearman & Sterling LLP, New York, NY (Todd M. Stenerson, Brian C. Hauser, Shearman & Sterling LLP, Washington, DC; Ryan A. Shores, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC; Steven J. Joffee, Ethan J. Bercot, Michael Best & Friedrich LLP, Cottonwood Heights, UT; Thomas A. Agnello, Michael Best & Friedrich LLP, Milwaukee, WI, on the brief) for Plaintiff-Appellant.

G. ROXANNE ELINGS (L. Danielle Toaltoan, on the brief), Davis Wright Tremaine LLP, New York, NY, for Defendant-Appellee. ___________________________

EUNICE C. LEE, Circuit Judge:

2 Plaintiff-Appellant 1-800 Contacts, Inc. (“1-800”), appeals from a judgment

entered in the United States District Court for the Southern District of New York

(Castel, J.), granting a motion for judgment on the pleadings in favor of Defendant-

Appellee JAND, Inc., d.b.a. Warby Parker (“Warby Parker”). The Complaint

alleges that Warby Parker used 1-800’s trademarks—its brand name 1-800-

Contacts and related variations—in keyword search advertisements in violation of

the federal Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and New York State common

law. Warby Parker allegedly engaged in a plan to purchase 1-800’s trademarks

as keywords in online advertising campaigns and then designed misleading paid

advertisements, so that customers searching for 1-800’s website by typing “1-800-

Contacts” into a web browser would be diverted to Warby Parker’s website

instead. However, 1-800 does not claim that Warby Parker actually displayed or

used the former’s trademarks; it alleges only that Warby Parker purchased search

engine keywords consisting of its trademarks in the online search engine auctions.

We now join the consensus view and decide that the mere act of purchasing

a competitor’s trademarks in the context of keyword search advertising does not

constitute trademark infringement. Upon examination of the remaining

allegedly infringing components of Warby Parker’s search advertising

campaign—i.e., the advertisement itself and landing webpage linked within—we

3 conclude that 1-800 failed to plausibly allege any reasonable likelihood of

consumer confusion under this Circuit’s test in Polaroid Corp. v. Polarad Electronics

Corp., 287 F.2d 492 (2d Cir. 1961). Thus, we AFFIRM the district court’s

judgment.

BACKGROUND

1-800-Contacts is an online—rather than brick-and-mortar—retailer of

contact lenses that consumers access solely through its website 1800contacts.com.

Many consumers navigate to the website by searching for 1-800’s registered

trademarks (“Marks”) on search engines, such as Google, and finding 1-800’s

webpage in the search results. These trademarks include “1800 Contacts,” “1 800

Contacts,” “1800contacts.com,” and “1800contacts” (collectively, “1-800’s Marks”).

Warby Parker was originally an online retailer of eyeglasses only. In 2013,

it opened brick-and-mortar stores. Then, around November 2019, Warby Parker

entered the online contact lens marketplace by selling contact lenses on its website

warbyparker.com. As a result, Warby Parker and 1-800 became competitors in

the online sale of contact lenses. Warby Parker uses the trade name and

trademark “Warby Parker.”

This dispute revolves around Warby Parker’s purchase at auction of

keywords including 1-800’s Marks in a type of internet marketing called search (or

4 keyword) advertising. We therefore begin with a brief explanation of how search

advertising works. As this is an appeal from the district court’s grant of a Rule

12(c) motion for judgment on the pleadings, we assume the facts alleged in the

complaint to be true and draw all reasonable inferences in favor of the non-

movant, 1-800. See Sheppard v. Beerman, 18 F.3d 147, 150 (2d Cir. 1994).

When online shoppers search for “1-800 Contacts” or variations of its

trademarks by typing those terms into a search engine, they receive two main

types of search results: (1) organic, or natural, results; and (2) sponsored, or paid,

results—both of which provide links to webpages. The first category, organic

results, includes the webpages that the “search engine’s algorithm deems to be

most relevant to the shopper’s search.” Compl. ¶ 36. The second category, paid

results, are based on which advertisers paid the most to have their advertisements

shown in response to the search term—also known as search advertising. Id. At

the time of the dispute, paid results included a small designation labeling the

result as an “Ad” in the top, left-hand corner.

Google Ads (formerly Google AdWords) is Google’s platform through

which advertisers can bid to place advertisements in Google’s search results. 1

1 We focus on Google despite the existence of other search engines because 1-800’s allegations are centered on Warby Parker’s use of Google Ads.

5 Using Google Ads, an advertiser can "strategically place advertisements" in a

search term’s results at, or near, the top of the results page, by outbidding the

competition for that term or keyword. Id. ¶ 42. Further, most search engines,

including Google’s, do not limit which keywords an advertiser can bid on. Thus,

an advertiser can bid on a competitor’s brand or trademarks so that the advertiser’s

ad appears in response to a consumer’s search for the competitor’s marks. For the

purposes of this case, the search result for a purchased keyword contains three

relevant components: (1) the advertisement copy; (2) a uniform resource locator

(“URL”), i.e., website link; and (3) the landing webpage the consumer arrives at

after clicking on the aforementioned URL.

I. 1-800’s Complaint Allegations

1-800’s Complaint, filed in August 2021, alleges that Warby Parker’s use of

1-800’s Marks in search advertising constituted trademark infringement and

unfair competition under the federal Lanham Act and New York State law. 2

Specifically, Warby Parker, as a new entrant into the online contact lens market,

2 To establish trademark infringement and unfair competition claims under the Lanham Act, a plaintiff must show first, that “it has a valid mark that is entitled to protection,” 1- 800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400, 407 (2d Cir. 2005), and second, that defendant’s “use in commerce” of the allegedly infringing mark is “likely to cause confusion” as to the origin, sponsorship, or affiliation of the defendant’s goods with plaintiff’s goods. Rescuecom Corp. v. Google Inc., 562 F.3d 123, 128 (2d Cir. 2009) (quoting 15 U.S.C. § 1114).

6 “devised a plan to trade on the great strength and goodwill of [1-800’s Marks] by”

engaging in a three-step plan to (1) purchase 1-800’s Marks as keywords, and (2)

show source-ambiguous ads to consumers searching for 1-800’s website, in order

to (3) direct them to a Warby Parker landing webpage that mimicked 1-800’s

homepage—so that consumers would believe they were actually on 1-800’s official

website, or at the very least, a website that was affiliated with, or approved by, 1-

800. Compl. ¶ 55 (arguing that Warby Parker used “keyword advertising,

ambiguous ads, and a deep-linked webpage” to “confuse consumers”). 3 In other

words, 1-800 accuses Warby Parker of “mislead[ing] consumers about the source or

affiliation of the advertiser . . . to exploit the favorable reputation consumers

associate with the 1 800 CONTACTS Marks.” Id. ¶¶ 88-89 (emphasis added).

Further, 1-800 argues that even if consumers were able to determine Warby

Parker’s lack of affiliation with 1-800 after reaching the latter’s deep-linked ad

page, Warby Parker still created initial-interest confusion 4 by diverting consumers

3 Warby Parker’s Google advertisement contained a “deep link” to a “unique warbyparker.com landing webpage that [wa]s different from the look and feel of Warby Parker’s homepage and that feature[d] coloring and a presentation that [wa]s confusingly similar to [1-800’s] website.” Compl. ¶ 67. 4 As will be discussed infra, initial-interest confusion is a type of consumer confusion that

occurs pre-sale, in which a “consumer falsely infer[s] an affiliation between the [plaintiff’s and defendant’s marks],” which “provide[s] the [defendant] with [a sales] opportunity it otherwise would not have achieved, or deprive[s] the [plaintiff] of an actual [sales] opportunity.” Select Comfort Corp. v. Baxter, 996 F.3d 925, 932 (8th Cir. 2021).

7 away from 1-800 to Warby Parker through its placement of paid keyword search

advertisements for the 1-800 Marks. We now detail 1-800’s allegations regarding

each of the three steps below.

A. Warby Parker’s Bids on 1-800’s Marks for Keyword Searches

First, 1-800’s Complaint alleges that Warby Parker’s purchase of 1-800’s

Marks as keywords in search engine auctions created consumer confusion.

According to 1-800, “[t]he primary purpose of navigational searches is to locate a

specific website.” Id. ¶ 63. That is, when consumers conduct “navigational

searches using a keyword corresponding to a specific business, their reasonable

expectation is to use the search engine as a shortcut to ‘navigate’ directly to that

company’s website.” Id. Based on this understanding of navigational searches,

1-800 argues that Warby Parker’s bids on 1-800’s Marks thwarted consumers’

reasonable expectations when they searched for terms like “1800 Contacts” or

“1800contacts.com” hoping to reach 1-800’s website, only to find Warby Parker’s

advertisement at the top of the search results page. Such a strategy allegedly was

devised “to confuse and mislead [1-800’s] consumers” by “trad[ing] off 1-800

Contacts’ brand name and reputation through unauthorized bidding on 1-800

Contacts’ trademarks as search engine keywords.” Id. ¶ 5. In other words, 1-800

argues that Warby Parker “deliberate[ly] use[d] [1-800’s Marks] to place

8 ambiguous ads that generate source, sponsorship, or initial interest confusion.”

Id. ¶ 6.

B. The Nature of Warby Parker’s Ads

Next, the Complaint claims that Warby Parker’s ads that appear on the

search results page were intentionally designed to be ambiguous and to confuse

consumers regarding the source of the ads. To support its claim, 1-800 provided

a July 26, 2021 screenshot of the Google search results page, in which Warby

Parker’s ad is the first result for the search term “1 800 contacts.” Compl. Ex. 2.

The first line of the ad consists of the bolded word “Ad” and the

www.warbyparker.com domain name in black, while the second line uses slightly

larger blue font and contains the text: “15% Off First Contacts Order – 90 Daily

Contacts for Only $55.” Id. 1-800 argues that because the ad’s first line appeared

in less prominent font than the ad’s second line, consumers who only skimmed

the search results, especially on a mobile phone, may have overlooked the first line

identifying the result as a Warby Parker advertisement. Moreover, the ad’s

second line, with the “larger, brighter-colored” text, “fail[ed] to identify Warby

Parker” and did not “clearly indicate that the website is not owned by, or affiliated

with” 1-800. Compl. ¶¶ 60-61. The screenshot of the search results page is

pictured below:

9 Compl. Ex. 2. On the basis of the allegations above, 1-800 surmises that Warby

Parker “knowingly and intentionally present[ed] . . . consumers with ads that

appear[ed] to be from 1-800 Contacts or an approved affiliate, licensee, or

associate.” Compl. ¶ 8.

C. The Landing Webpage Linked to Warby Parker’s Ads

Lastly, 1-800 claims that Warby Parker further “magnifie[d] this confusion”

10 created by the aforementioned keyword bidding and ad placements, by including

a URL in its paid advertisements that, when clicked upon, directed Google

searchers to a “deep link”—i.e., a link to a page other than Warby Parker’s

homepage—within the Warby Parker website. Id. ¶ 66. 1-800 refers to the

advertisement’s landing webpage as the “Deep Linked Ad Page.” Id. Further,

1-800’s brand is uniquely associated with the color blue, which has been

“continuously and prominently featured” on its website since 1996. Id. ¶ 68. 1-

800 argues that Warby Parker “usurp[ed]” the look and feel of 1-800’s website by

intentionally using a layout and color scheme in its Deep Linked Ad Page to

“further confus[e] consumers into believing [that] they have arrived” at 1-800’s

website or an affiliated site. Id. ¶ 69; see also id. ¶ 71 (explaining that Warby Parker

“revamped the Deep Linked Ad Page color scheme and layout to even more

closely resemble the updated 1800contacts.com website homepage layout adopted

in April 2020”). To make this point, 1-800’s Complaint provides screenshots of 1-

800’s homepage to compare with Warby Parker’s Deep Linked Ad Page. Compare

infra Figure 1 (1-800’s homepage), with infra Figure 2 (Warby Parker’s “Deep

Linked Ad Page” for consumers who search 1-800’s Marks).

11 Figure 1 (1-800’s standard homepage):

Id. ¶ 68. Figure 2 (Warby Parker’s “Deep Linked Ad Page,” shown in searches for

1-800’s Marks):

Id. ¶ 70.

1-800 compares the two webpage screenshots above and highlights that

12 Warby Parker’s Deep Linked Ad Page contained a blue rectangular box, see supra

Figure 2, which was “nearly the same shade of light blue” as the box on the 1-800

homepage, see supra Figure 1. Id. ¶ 70. Moreover, both blue boxes contained

images of contact lens boxes and a discount offer. Compare id. ¶ 68 (Figure 1

displaying screenshot of 1-800’s homepage with the text, “Get 20% off your first

order,” and partial images of four boxes of contact lenses) with id. ¶ 70 (Figure 2

displaying screenshot of Warby’s Deep Linked Ad Page with the offer, “Get 15%

off your first contacts order, plus free shipping,” and images of ten boxes of contact

lens).

Additionally, 1-800 points out that Warby Parker’s Deep Linked Ad Page

had a different look and feel than either (1) Warby Parker’s landing webpage

provided in paid ads for users who searched “Warby Parker contacts” (the “Non-

1-800 Landing Webpage”) or (2) Warby Parker’s standard homepage. Compare

supra Figure 2 (Warby Parker’s Deep Linked Ad Page with rectangular light blue

box and discount offer), with infra Figure 3 (Warby Parker’s Non-1-800 Landing

Webpage without rectangular light blue box and no discount offer), and infra

Figure 4 (Warby Parker’s homepage with light brown background).

13 Figure 3 (Warby Parker’s Non-1-800 Landing Webpage):

Id. ¶ 75. Figure 4 (Warby Parker’s standard homepage):

Id. ¶ 76. 1-800 argues that the differences in color and layout between Warby

Parker’s Deep Linked Ad Page and its Non-1-800 Landing Webpage further

14 evidences Warby Parker’s intent to "misdirect[] consumers who type 1-800

Contacts’ domain name into the search bar . . . and to divert them away” from 1-

800 to Warby Parker. Id. ¶ 80 (emphasis omitted).

II. District Court Decision

On June 27, 2022, the district court granted Warby Parker’s motion for

judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) in its

entirety. To reach its conclusion, the district court applied this Circuit’s Polaroid

test to determine whether 1-800 had adequately pleaded that Warby Parker’s use

of 1-800’s Marks created a likelihood of consumer confusion. See 1-800 Contacts,

Inc. v. JAND, Inc., 608 F. Supp. 3d 148, 154–55 (S.D.N.Y. 2022) (explaining the eight-

factor balancing test in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d

Cir. 1961)). The district court reasoned that, although 1-800’s Marks were strong

and despite indications of “bad faith” in Warby Parker’s design of the Deep Linked

Ad Page, these factors alone were insufficient to establish a likelihood of consumer

confusion. Id. at 157-58. Rather, the district court found one of the eight

factors—the similarity-of-the-marks factor—to be dispositive to its analysis

because Warby Parker’s name was clearly displayed in both the paid Google

advertisements and the Deep Linked Ad Page. See id. at 157. Accordingly, the

district court held that it was not plausible for “reasonably sophisticated internet

15 consumers to be confused as to whether they ha[d] navigated to, and [were]

purchasing contacts” from 1-800 instead of Warby Parker because Warby Parker’s

mark—“Warby Parker”—was entirely dissimilar from 1-800’s Marks—“1800

Contacts,” “1 800 Contacts,” “1800contacts.com,” and “1800contacts.” Id. at 158.

1-800 timely appealed.

DISCUSSION

I. Standard of Review

“We review de novo a district court’s decision to grant a motion for judgment

on the pleadings pursuant to Federal Rule of Civil Procedure 12(c).” Lively v.

WAFRA Inv. Advisory Grp., Inc., 6 F.4th 293, 301 (2d Cir. 2021) (quoting Vega v.

Hempstead Union Free Sch. Dist., 801 F.3d 72, 78 (2d Cir. 2015)). A party may move

for judgment on the pleadings after the pleadings are closed, but early enough not

to delay a trial. Id. When determining a Rule 12(c) motion, courts are limited to

reviewing: (1) the non-movant’s pleadings; (2) the documents that are attached to,

integral to, or incorporated by the pleadings; and (3) judicially noticeable extrinsic

evidence. Id. at 306.

The legal standard for granting a Rule 12(c) motion is identical to that for

granting a Rule 12(b)(6) motion to dismiss for failure to state a claim. Lynch v.

City of New York, 952 F.3d 67, 75 (2d Cir. 2020). That is, the “complaint must

16 contain sufficient factual matter, accepted as true, to state a claim to relief that is

plausible on its face.” Lively, 6 F.4th at 301 (quoting Hayden v. Paterson, 594 F.3d

150, 160 (2d Cir. 2010)). Further, “we are not to give effect to a complaint’s

assertions of law or legal conclusions couched as factual allegations; we are to

accept well pleaded factual assertions as true; and we are to draw all reasonable

factual inferences in favor of the plaintiff.” Lynch, 952 F.3d at 75–76.

II. Applicable Law

A. Trademark Infringement and Unfair Competition

“The Lanham Act defines a trademark as ‘any word, name, symbol, or

device, or any combination thereof’ that a manufacturer uses to distinguish the

manufacturer’s goods from those manufactured or sold by others and to ‘indicate

the source of the goods.’” Vans, Inc. v. MSCHF Prod. Studio, Inc., 88 F.4th 125, 135

(2d Cir. 2023) (per curiam) (quoting 15 U.S.C. § 1127). To sufficiently state claims

for trademark infringement and unfair competition under the Lanham Act, the

plaintiff must show first, that its mark is protected, see 1-800 Contacts, Inc. v.

WhenU.com, 414 F.3d 400, 407 (2d Cir. 2005), and second, that the defendant’s “use

in commerce” of the allegedly infringing mark would “likely cause confusion” as

to the origin, sponsorship, or affiliation of the defendant’s goods with plaintiff’s

goods. Rescuecom Corp. v. Google Inc., 562 F.3d 123, 128 (2d Cir. 2009) (quoting 15

17 U.S.C. § 1114). “[L]iability for trademark infringement under New York law

[largely] mirrors liability under the Lanham Act.” Tiffany & Co. v. Costco Wholesale

Corp., 971 F.3d 74, 91 n.13 (2d Cir. 2020). 5

There are two types of consumer confusion at issue in this case—

"sponsorship confusion” and “initial-interest confusion.” Appellant’s Br. at 25.

First, to sufficiently allege sponsorship confusion, “a consumer need not believe

that the owner of the mark actually produced the item and placed it on the market.

[Rather,] [t]he [consumer]’s belief that the mark’s owner sponsored or otherwise

approved the use of the trademark satisfies the confusion requirement.” Star

Indus., Inc. v. Bacardi & Co. Ltd., 412 F.3d 373, 384 (2d Cir. 2005) (quoting Dall.

Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 (2d Cir. 1979)).

Separately, initial-interest confusion, also known as pre-sale confusion,

creates initial customer interest “even though no actual sale is finally completed

as a result of the confusion.” 3 J. Thomas McCarthy, McCarthy on Trademarks and

Unfair Competition § 23.6 (5th ed. 2024). Such confusion “may result in the

consumer falsely inferring an affiliation between the [plaintiff’s goods] and

5 New York law additionally requires a “showing of bad faith.” Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 485 (2d Cir. 2005). On appeal, 1-800 presented the same arguments for both its federal Lanham Act claims and New York common law claims, and we accordingly conclude that they all fail for the reasons explained infra.

18 [defendant’s goods], provide the [defendant] with an opportunity it otherwise

would not have achieved, or deprive the [plaintiff] of an actual [business]

opportunity.” Select Comfort Corp. v. Baxter, 996 F.3d 925, 932 (8th Cir. 2021). In

particular, “[i]n the context of the internet, the concern [with initial-interest

confusion] is that potential customers of one website will be diverted and

distracted to a competing website.” Alzheimer’s Disease & Related Disorders Ass’n,

Inc., v. Alzheimer’s Found. of Am., 307 F. Supp. 3d 260, 286 (S.D.N.Y. 2018) (Nathan,

J.) (internal quotation marks omitted); see also Brookfield Commc’ns, Inc. v. W. Coast

Ent. Corp., 174 F.3d 1036, 1057 (9th Cir. 1999) (“[E]ven where people realize,

immediately upon accessing [the defendant’s website] that they have reached a

site operated by [the defendant] and wholly unrelated to [the plaintiff], [the

defendant] will still have gained a customer by appropriating the goodwill that

[plaintiff] has developed.”). We require a showing of intentional deception to

sufficiently plead internet-related initial-interest confusion because “consumers

diverted on the Internet can more readily get back on track than those in actual

space.” Savin Corp. v. Savin Grp., 391 F.3d 439, 462 n.13 (2d Cir. 2004).

B. Polaroid Test for Likelihood of Confusion

After ascertaining the type of consumer confusion alleged, we apply the

eight-factor Polaroid test to assess whether a plaintiff has sufficiently pleaded

19 “likelihood of confusion.” 287 F.2d at 496; see also Alzheimer’s Disease, 307 F. Supp.

3d at 285 (noting that “it is important to clarify upfront the specific type of

consumer confusion alleged by the [plaintiff]” so that the Polaroid test can be

“evaluated in the context” of whether that type of confusion was likely to have

occurred). “The eight factors are: (1) strength of the trademark; (2) similarity

between the two marks; (3) proximity of the products and their competitiveness

with one another; (4) likelihood the prior owner may ‘bridge the gap’ in the

markets for their products; (5) evidence of actual consumer confusion; (6) the

defendant’s good faith in adopting its imitative mark; (7) quality of the defendant’s

product compared with the plaintiff’s product; and (8) sophistication of the

buyers.” Vans, Inc., 88 F.4th at 136. “No single factor is dispositive, nor is a court

limited to consideration of only these factors.” Brennan’s, Inc. v. Brennan’s Rest.,

LLC, 360 F.3d 125, 130 (2d Cir. 2004).

Importantly, “each factor must be evaluated in the context of how it bears

on the ultimate question of likelihood of confusion as to the source of the product.”

Id. (emphasis added) (quoting Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799

F.2d 867, 872 (2d Cir. 1986)); see also Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.,

588 F.3d 97, 115 (2d Cir. 2009) (“The application of the Polaroid test is not

mechanical, but rather, focuses on the ultimate question of whether, looking at the

20 products in their totality, consumers are likely to be confused.” (internal quotation

marks omitted)). In other words, “[t]he crucial issue . . . is whether there is any

likelihood that an appreciable number of ordinarily prudent purchasers are likely

to be misled, or indeed simply confused, as to the source of the goods in question.”

Savin Corp., 391 F.3d at 456 (second alteration in original) (quoting Mushroom

Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 46 (2d Cir. 1978)).

III. Application of Lanham Act Claim Elements and the Polaroid Test

As an initial matter, Warby Parker’s practice of bidding on competitors’

trademarks during search advertising auctions is a permissible and standard

industry practice. See, e.g., Rescuecom Corp., 562 F.3d at 125–27 (describing how

an advertiser can bid on a competitor’s brand name and trademark as keywords

in search auctions); Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144, 151 (4th Cir. 2012)

(describing how “an advertiser will try to outbid its competitors for the top

positions in order to maximize the number of clicks on the advertiser’s text ads”).

As 1-800 Contacts conceded at oral argument, there is no prohibition on such

search advertising. See Oral Arg. at 5:15–6:30. This well-known marketing

strategy—standing alone—cannot support a claim of trademark infringement

absent additional use of 1-800’s Marks. See, e.g., 1-800 Contacts, Inc. v. Lens.com,

Inc., 722 F.3d 1229, 1242 (10th Cir. 2013); Alzheimer’s Disease, 307 F. Supp. 3d at 287;

21 cf. Select Comfort Corp., 996 F.3d at 931 (holding that the combined use of a

competitor’s trademarks in search advertising, website addresses, and graphic and

text advertising materials could support a claim of trademark infringement);

Australian Gold, Inc., v. Hatfield, 436 F.3d 1228, 1240 (10th Cir. 2006) (holding that

the use of a competitor’s trademarks on a company’s own website, in addition to

bidding in search advertising auctions, violated the Lanham Act). It is within that

context that the elements of 1-800’s Lanham Act claims must be assessed.

As outlined above, three components to a search advertising campaign are

relevant for our analysis of whether 1-800 has sufficiently alleged trademark

infringement by Warby Parker: first, the defendant’s purchase of a competitor’s

marks as keywords; second, the ads placed on the search results page for the

competitor’s marks; and third, the defendant’s landing webpage to which its ads

are linked. Thus, the central question in this case is whether 1-800 has sufficiently

alleged a likelihood of confusion arising from Warby Parker’s use of 1-800’s Marks

(i.e., 1800 Contacts,” “1 800 Contacts,” “1800contacts.com,” and “1800contacts”) in

the keyword bidding process, the search ads, and/or the linked landing webpage.

Before we reach this central question, however, we note that to establish a

Lanham Act violation a plaintiff must show its “bona fide use,” Rescuecom Corp., 562

F.3d at 132 (quoting 15 U.S.C. § 1127), of a “valid protectable mark,” Vans, Inc., 88

22 F.4th at 136. Here, there is no dispute that 1-800’s Marks are federally registered

and protected and that 1-800 has used them in more than a token fashion. See

Rescuecom Corp., 562 F.3d at 138; see also Vans, Inc., 88 F.4th at 136 (noting that

federal registration is “prima facie evidence that [the plaintiff’s marks] are valid and

protectable”). Further, in the search advertising context, an alleged infringer’s

purchase of a keyword comprising a competitor’s trademark constitutes a “use in

commerce” of such trademark under the Lanham Act. See Rescuecom Corp., 562

F.3d at 127 (holding that complaint regarding Google’s AdWord’s

recommendation of plaintiff’s trademark to plaintiff’s competitors “adequately

plead[ed] a use in commerce” under the Lanham Act).

1-800 alleges that Warby Parker made an infringing use of 1-800’s Marks in

the first component of its search advertising campaign: the keyword purchase.

However, as described above, the mere act of purchasing a competitor’s

trademarks as keywords in the search advertising context does not constitute

trademark infringement or unfair competition. See id. at 130. Warby Parker’s

purchase of 1-800’s Marks, standing alone, does not infringe 1-800’s Marks because

“a defendant must do more than use another’s mark in commerce to violate the

Lanham Act.” Id. The statute requires a showing that the defendant’s use

caused consumer confusion. See 15 U.S.C. § 1114(1) (“Any person who shall,

23 without consent of the registrant—[] use in commerce any . . . copy . . . of a

registered mark in connection with the sale, offering for sale, distribution, or

advertising of any goods . . . in connection with which such use is likely to cause

confusion . . . shall be liable in a civil action by the registrant . . . .”).

Below, we apply the Polaroid factors de novo to the other two components of

Warby Parker’s ad campaign—its search ads and the linked landing webpage—

which 1-800 alleges violated the Lanham Act. We conclude that 1-800 has failed

to sufficiently plead that Warby Parker’s advertising plan was likely to confuse

consumers at any point in the sales process because 1-800 does not claim that

Warby Parker actually used the former’s Marks other than by buying them as

keywords in the search engine auctions, and such use alone does not create a

likelihood of consumer confusion. 6

6 To the extent 1-800 also alleges that Warby Parker committed trademark infringement by copying the “look and feel” of 1-800’s website, that is really a trade dress claim. Such a claim would require an additional showing by 1-800 that its website design is “distinctive.” See Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206, 216 (2d Cir. 2012) (explaining that in a trade dress claim a mark must be “distinctive” and not “generic” in order to be protectable, either by being inherently distinctive or by “‘acquir[ing]’ distinctiveness by “developing ‘secondary meaning’ in the public mind”); see also id. at 217 (“[I]f (and only if) the plaintiff’s trademark is ‘distinctive’ within the meaning of trademark law and is therefore valid and protectable,” does the court then assess whether the defendant’s use of plaintiff’s protected mark is likely to cause consumer confusion.). Here, 1-800 did not plead or argue that the “look and feel” of its website is a protectable mark. Rather, 1-800’s Complaint is focused on Warby Parker’s

24 A. Strength of the Marks, Relative Competition and Proximity, Bridging the Gap, Relative Quality, and Good Faith

The district court held that four of the eight factors in the Polaroid test—the

strength of the Marks, the products’ competitive proximity, the products’ relative

quality, and good faith—all favored 1-800. The district court also concluded that

the bridging-the-gap factor was irrelevant. Although 1-800 does not challenge

the district court’s analysis of these five factors, we nevertheless have reviewed

each factor de novo and agree with the district court’s conclusion and reasoning as

to each. See JAND, Inc., 608 F. Supp. 3d at 155–58. We now turn to analysis of

the remaining factors.

B. Similarity of the Marks

1-800 contends that the district court erred in choosing which marks to

compare for the similarity-of-the-marks factor of the likelihood of confusion test.

In the decision below, the district court compared the mark Warby Parker used

“after the search results . . . [we]re displayed to the consumer” (i.e., Warby’s own

mark) and concluded that it was “substantially different” from 1-800’s Marks.

JAND, Inc., 608 F. Supp. 3d at 157. On appeal, 1-800 primarily argues that

use of its “distinctive ‘1 800 CONTACTS’ trademark and variations thereof (collectively, the ‘Marks’).” Appellant’s Br. at 3 (quoting Compl. ¶¶ 1, 21–22). Accordingly, the Court focuses only on 1-800’s allegations over Warby Parker’s use of 1-800’s Marks.

25 “consumers [had to] physically type 1-800’s Marks (including the

1800contacts.com domain name) into the search or address bar . . . to generate [the]

search results” page that displayed the Warby Parker ads, and thus this typing in

of the mark by consumers should be the point of comparison. Appellant's Br. at

52. 7 Under this theory, 1-800 argues, the district court should have concluded

that the similarity-of-the-marks factor favored 1-800, “because the [m]arks Warby

[Parker] use[d] and bid[] on to generate its advertisements [we]re identical to

1-800’s Marks.” Id. at 49. We disagree.

First, as noted above, Warby Parker’s only alleged use of 1-800’s Marks was

in the initial keyword bid. Despite 1-800’s emphasis on the allegedly nefarious

7 1-800 also argues that the district court should have compared 1-800’s Marks with the “keyword or metatag used by” Warby Parker to place the paid ad, “even if that keyword or metatag remain[ed] hidden from the consumers.” Appellant’s Br. at 50–51. “Metatags are HTML code not visible to Web users but used by search engines in determining which sites correspond to the keywords entered by a Web user.” Id. at 51 n.30 (alteration adopted) (quoting Brookfield Commc’ns., Inc., 174 F.3d at 1061 n.23). However, to the extent 1-800 is raising a likelihood of confusion argument with respect to metatags, 1-800’s Complaint is devoid of claims regarding metatags and thus lacks allegations upon which to infer such an argument, even at the pleadings stage. As a result, the Court will not address 1-800’s metatag argument, as it was not raised below. See In re Nortel Networks Corp. Sec. Litig., 539 F.3d 129, 132 (2d Cir. 2008) (“It is a well- established general rule that an appellate court will not consider an issue raised for the first time on appeal.” (alteration adopted) (quoting Bogle-Assegai v. Connecticut, 470 F.3d 498, 504 (2d Cir. 2006)). But even if we consider that argument, it fails. As we held in WhenU, “as a matter of law,” a defendant’s use of a plaintiff’s trademark in an “unpublished directory of terms” does not constitute a trademark infringement under the Lanham Act. 414 F.3d at 403.

26 nature of Warby Parker’s keyword bidding activities, this well-known internet

marketing strategy—by itself—does not support a claim of trademark

infringement absent additional use of 1-800’s Marks. See, e.g., Lens.com, Inc., 722

F.3d at 1241 (affirming district court’s ruling that “merely purchasing such a

keyword cannot, on its own, give rise to liability for infringement” under the

Lanham Act); Alzheimer’s Disease, 307 F. Supp. 3d at 287 (“[C]ourts have repeatedly

found that the purchase of a competitor’s marks as keywords alone, without

additional behavior that confuses consumers, is not actionable.”). Thus, although

the marks Warby Parker purchased at auction for use as keywords are identical to

1-800’s Marks, this alleged use—including the consumer’s component of typing

the keyword into a search engine—does not violate the Lanham Act and is not the

relevant comparison point for the similarity-of-the-marks factor.

Rather, in search advertising, “‘the labeling and appearance of the

advertisements and the surrounding context on the screen displaying the results

page’ [is] a critical factor” in assessing likelihood of confusion—especially “when

the entry is clearly labeled as an advertisement and clearly identifies the source.”

Lens.com, 722 F.3d at 1245 (quoting Network Automation v. Advanced Sys. Concepts,

638 F.3d 1137, 1154 (9th Cir. 2011)). In other words, in the search advertising

context, the similarity-of-the-marks factor should be assessed as it relates to the

27 paid advertisement’s appearance on the result page. See Lens.com, 722 F.3d at

1245 (holding that “the similarity of the [consumer’s] search term and [the

plaintiff’s] mark is of minor relevance”); see also Alzheimer’s Disease, 307 F. Supp.

3d at 291 (“With respect to the [plaintiff’s] claim regarding [the defendant’s]

purchase of [the plaintiff’s] Marks as keywords and metatags, the proper

comparison is between the resulting ads for [the parties’] advertisements or other

search results.”); CJ Prods. LLC v. Snuggly Plushez LLC, 809 F. Supp. 2d 127, 159

(E.D.N.Y. 2011) (explaining that in the AdWords context, courts must consider the

degree of similarity between the plaintiff’s marks and the defendant’s paid

advertisements as they appear on the search results page).

Here, 1-800 does not allege that Warby Parker used 1-800’s Marks in any

components aside from the preliminary keyword purchase. Indeed, 1-800’s own

pleadings show that the word “Ad” is displayed directly next to Warby Parker’s

domain name at the top of its paid search ad in bold; the linked URL contains only

the www.warbyparker.com domain name, see Compl. Ex. 2; and the alleged “Deep

Linked Ad Page” displays Warby Parker’s mark at the top of the webpage, Compl.

¶ 70. Further, as the district court correctly observed, Warby Parker’s own marks

do not contain any reference to numbers, phone numbers, or a 1-800 Contacts-

branded product. We therefore agree with the district court’s conclusion “that

28 the marks at issue are substantially different.” JAND, Inc., 608 F. Supp. 3d at 157. 8

Consequently, we find that the similarity-of-the-marks factor entirely favors

Warby Parker.

C. Actual Confusion

Regarding the actual confusion factor, 1-800 argues that the district court

ignored its plausible allegations that Warby Parker’s “bad-faith plan” did, in fact,

create confusion among consumers as to whether 1-800 was affiliated with Warby

Parker either pre-sale, at the point of sale, or post-sale. Appellant’s Br. at 57. We

disagree.

Although other methods might suffice, Lanham Act claimants typically

present evidence of actual confusion through consumer surveys. See Star Indus.,

8 We are not holding that a plaintiff can never allege some sort of violation of the Lanham Act where the defendant’s only use of the plaintiff’s mark is in the keyword purchase. For example, if Warby Parker’s landing webpage mimicked 1-800’s website such that it was a mirror image of 1-800’s site but stopped just short of using 1-800’s brand name and related Marks, 1-800 could have a potential trade dress infringement claim, and our analysis would likely weigh the similarity-of-the-marks factor much more heavily in 1-800’s favor. See Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 381 (2d Cir. 1997) (“[T]here is no question that trade dress may protect the ‘overall look’ of a product.”); FC Online Mktg., Inc. v. Burke’s Martial Arts, LLC, No. 14-CV-3685 (SJF), 2015 WL 4162757, at *9 (E.D.N.Y. July 8, 2015) (collecting cases to explain that although the issue is relatively novel, district courts have recognized that a website’s “look and feel” can constitute protectable trade dress). However, 1-800 did not bring a trade dress claim in this case, and therefore the question is not before us. See supra note 6 (“1-800 did not plead or argue that the ‘look and feel’ of its website is a protectable mark.”).

29 Inc., 412 F.3d at 388 (noting that plaintiff’s “failure to present its own consumer

survey weighs against a finding of [actual] consumer confusion”). 1-800’s

Complaint did not refer to any survey—or even anecdotal—evidence from

consumers demonstrating actual confusion. Rather, on appeal, 1-800 cites

examples from the Complaint that allege that Warby Parker’s “source-ambiguous”

ads and its landing webpage’s “mimicry” of 1-800’s website caused actual

consumer confusion. See Appellant’s Br. at 57 n.36 (citing, for example, Compl.

¶ 5 (alleging that Warby Parker’s scheme “exposes consumers to source-

ambiguous Warby Parker advertisements and a deep linked webpage that

confuses consumers”); Compl. ¶ 9 (alleging that Warby Parker’s “mimicry” of 1-

800’s website “causes consumers who view th[e Warby] webpage to reasonably—

but mistakenly—conclude that the webpage they have reached is 1-800” or an

affiliated company)). However, these allegations of “actual confusion” are

conclusory at best. See Ashcroft v. Iqbal, 556 U.S. 662, 686 (2009) (holding that

courts are not required “to credit a complaint’s conclusory statements without

reference to its factual context”); Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009)

(explaining that “threadbare recitals of the elements of a cause of action, supported

by mere conclusory statements” are not sufficient for surviving a motion to

dismiss (alteration adopted) (quoting Iqbal, 556 U.S. at 678)).

30 First, despite 1-800’s allegations that Warby Parker’s ads were “source-

ambiguous,” 1-800’s own screenshot of the ad shows that it is clearly marked as

an “Ad” in the top left corner, clearly displays Warby Parker’s own domain name,

and contains no use of 1-800’s Marks or anything remotely similar to 1-800’s

Marks:

Compl. Ex. 2. Indeed, the screenshot shows that just below Warby Parker’s paid

ad is 1-800’s own paid ad, which, in contrast, prominently displays 1-800’s Marks

twice, and clearly proclaims that this result is 1-800’s “Official Site.” Id. Thus, 1-

800 does not allege actual confusion as to the source or affiliation of Warby Parker’s

Google ad nor does it allege facts from which we could plausibly infer actual

confusion.

Second, 1-800’s screenshot of the Deep Linked Ad Page indicates that the

31 page prominently displays Warby Parker’s own mark, includes a light blue banner

which offers a 15% discount with images of ten boxes of contact lenses, and is

devoid of 1-800’s Marks:

Compl. ¶ 70. In contrast, 1-800’s website prominently displays 1-800’s Marks,

contains an offer for a 20% discount, and displays only four partial images of boxes

32 of contact lenses:

Compl. ¶ 68.

Generally, a lack of consumer survey data is “evidence that actual confusion

cannot be shown.” The Sports Auth., Inc. v. Prime Hosp. Corp., 89 F.3d 955, 964 (2d

Cir. 1996). Nevertheless, “a [court] may still conclude that actual confusion

exists . . . , so long as there is other evidence of actual confusion.” Id. To prevail

on the actual confusion factor at this initial pleadings stage, 1-800 must plead

“enough fact[s] to raise a reasonable expectation that discovery will reveal

evidence of illegal conduct.” Lively, 6 F.4th at 301 (alteration in original) (quoting

Lynch, 952 F.3d at 75). Given the absence of allegations of actual confusion, a

comparison of the website screenshots shown above does not lead to a plausible

inference that “an appreciable number” of consumers who reach Warby Parker’s

33 Deep Linked Ad Page would actually be confused by a partial light-blue color and

a discount offer (15% as opposed to 1-800’s 20%) into thinking Warby Parker’s

webpage is sponsored by or affiliated with 1-800. Savin, 391 F.3d at 456 (quoting

Mushroom Makers, 580 F.2d at 46).

Thus, we conclude that the actual confusion factor favors Warby Parker.

D. Sophistication of the Consumer

As to the final factor, 1-800 contends that the district court erred by making

impermissible factual findings regarding consumer sophistication at the pleadings

stage. In the Complaint, 1-800 alleges that the relevant consumers’ lack of

familiarity with search advertising and sponsored ads made them susceptible to

being confused by Warby Parker’s Google ads. According to 1-800, the decision

below completely ignored 1-800’s plausible allegations that “online consumers are

equivalent to ordinary retail customers in the public at-large, who typically do not

bring any heightened sophistication to the marketplace,” and that these

“ordinarily sophisticated” customers would have been especially confused by

Warby Parker’s paid ads because the ads did not disavow an affiliation with 1-800.

Appellant’s Br. at 39.

First, we agree with 1-800 that the district court erred in determining that

the relevant consumer base was “reasonably sophisticated” because this assumed

34 facts outside of the Complaint. See JAND, Inc., 608 F. Supp. 3d at 159 (district

court discounting the likelihood that 1-800 consumers would “mistakenly” click

on a Warby Parker paid search result and assuming that any such consumers

would thoroughly review Warby Parker’s website and not be confused). To be

clear, although 1-800 argues on appeal that the district court ignored its well-

pleaded allegations that “an appreciable number of ordinarily sophisticated

consumers” would be confused by Warby Parker’s actions, Appellant’s Br. at 39,

1-800 did not make any explicit allegations regarding consumer “sophistication”

in its Complaint. See App’x 9–109 (no use of the word “sophisticated” or

“sophistication” in Complaint). Nevertheless, the Court still concludes that the

district court erred by substituting its own facts regarding consumer sophistication

where 1-800 did not allege any. See Lively, 6 F.4th at 306 (explaining that courts

are limited to reviewing the non-movant’s pleadings when considering a motion

for judgment on the pleadings).

Second, the district court also erred by substituting 1-800’s plausible theory

of initial-interest confusion with point-of-sale confusion in its assessment of the

consumer-sophistication factor. See JAND, Inc., 608 F. Supp. 3d at 159 (“[E]ven

assuming that some consumers will mistakenly click on a Warby Parker paid

search result and inadvertently navigate to Warby Parker’s page, these consumers

35 would then take time to meaningfully review the contents and layout of the

website before taking any further action.”). The district court’s assumption that

online consumers would “meaningfully review” Warby Parker’s webpage before

they took any actions, see id., ignores this Circuit’s case law holding that in the

search advertising context, actionable initial-interest confusion can occur if a

defendant deceptively diverts the plaintiff’s consumers to the defendant’s site by

misusing plaintiff’s marks. See Savin Corp., 391 F.3d at 462 n.13.

Accordingly, upon de novo review of this factor, we hold that 1-800’s

allegations about the sophistication of consumers engaged in navigational

searches raised a plausible inference that the relevant consumer base could be

susceptible to initial-interest and affiliation confusion. Accordingly, we decide

that the consumer-sophistication factor slightly favors 1-800.

* * *

Viewing the Polaroid factors as a whole, 1-800’s Complaint fails to plausibly

allege that consumers are likely to be confused by any portion of Warby Parker’s

search advertising plan. We recognize that “the likelihood of confusion test is a

fact-intensive analysis that ordinarily does not lend itself to a motion” for

judgment on the pleadings. Merck & Co. v. Mediplan Health Consulting, Inc., 425 F.

Supp. 2d 402, 412 (S.D.N.Y. 2006) (Chin, J.). However, “district courts can and do

36 properly dismiss [trademark infringement] claims when the allegation of

consumer confusion is implausible, and we have affirmed dismissals in such

cases.” E.A. Sween Co. v. A&M Deli Express Inc., 787 F. App’x 780, 782–83 (2d Cir.

2019) (summary order). Here, the pleadings failed to plausibly allege that Warby

Parker used 1-800’s Marks anywhere during the search advertising process outside

of its purchase at the initial, permissible keyword auction. Notably, Warby

Parker did not use 1-800’s Marks in the paid advertisement displayed on the search

results page, in the domain name of the URL linked in the paid advertisement

(www.warbyparker.com), or on the landing webpage displayed to consumers

who clicked on the URL in the paid advertisement. Nor did 1-800 plausibly allege

that Warby Parker used any other protectable marks in these remaining components

of the search advertising campaign. See Christian Louboutin S.A. v. Yves Saint

Laurent Am. Holding, 696 F.3d 206, 216 (2d Cir. 2012) (explaining that a mark must

be “distinctive” in order to be protectable under the Lanham Act). Thus, the

dissimilarity of the marks factor is dispositive in this case; 1-800 has not adequately

alleged likelihood of consumer confusion. See Nat. Organics, Inc. v. Nutraceutical

Corp., 426 F.3d 576, 579 (2d Cir. 2005) (“[I]n an appropriate case, the ‘similarity of

the marks’ factor can be dispositive.” (quoting Nabisco, Inc. v. Warner-Lambert Co.,

220 F.3d 43, 46 (2d Cir. 2000))); Nabisco, Inc., 220 F.3d at 48 (holding that the marks

37 in the case were so dissimilar as to outweigh all other factors); Brookfield Commc’ns,

174 F.3d at 1054 (“Where the two marks are entirely dissimilar, there is no

likelihood of confusion.”).

Accordingly, we affirm the district court’s grant of Warby Parker’s motion

for judgment on the pleadings and its dismissal of the Complaint.

CONCLUSION

The judgment of the United States District Court for the Southern District of

New York is AFFIRMED.