Sham Suits Attacked

     LAS VEGAS (CN) – In a federal antitrust complaint, a contact lens company that says it spent $1.4 million on legal fees to defend itself from a claim for $20.51 in damages claims 1-800 Contacts cranks out “sham lawsuits” like a “well-oiled machine,” knowing that most competitors can only afford to settle.

     In its own case, says, “1-800 spent around $1,100,000 in attorneys’ fees to chase $20.51 in damages,” and a federal judge rejected the claim anyway – but not until had spent $1.4 million defending itself. claims 1-800 Contacts’ business tactic is based on the belief “that its competitors … could not afford to fight 1-800, which meant that 1-800 need not concern itself with actual trademark rights; 1-800 could instead enforce the trademark rights it dreamed of.”
     The complaint continues: “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 against its competitors. In these lawsuits, 1-800 asserted objectively baseless claims against its competitors without regard to merits and without a genuine interest in redressing grievances, but rather to harass, neutralize and vanquish its competition. From extensive practice, 1-800’s litigation apparatus has become a well-oiled machine. Indeed, 1-800 now has a form complaint for its frequent lawsuits against competitors, which is always at the ready and requires little more than a new caption from lawsuit to lawsuit.
     “When Lens refused to accede to 1-800’s demands, 1-800 unleashed the litigation 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 fetched twenty dollars and fifty-one cents ($20.51) in lost profits. Nonetheless, 1-800 poured enormous financial and other resources into the lawsuit, and pursued scorched-earth tactics usually reserved for 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.
     “In late 2010, the district court tossed 1-800’s lawsuit against Lens in a comprehensive 65-page decision. By then, however, 1-800 had achieved its objective. Lens had incurred in excess of $1,400,000 in litigation fees and expenses to defend against 1-800’s frivolous infringement claims.
     “Undeterred, 1-800 now hopes to revive its lawsuit and extend the pain based upon ‘new evidence.’ Once again, however, 1-800 has no basis for its argument. The federal court dismissed 1-800’s lawsuit on December 14, 2010, while its so-called ‘new evidence’ is from November 30, 2009.
     “1-800’s anticompetitive behavior has violated state and federal antitrust laws, the
     Lanham Act and Nevada common law. Lens files this lawsuit to stop 1-800’s misconduct and anticompetitive practices; to recover compensatory and treble damages; and to obtain injunctive and other equitable relief. Lens further seeks declaratory relief in connection with 1-800’s asserted trademark rights.” seeks punitive damages for abuse of process, attempted monopoly, unfair competition and unfair trade. It is represented by Michael McCue with Lewis and Roca.

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