Sustainability-centric claims made by Everlane on its website brought the brand under the microscope of a consumer protection watchdog in what is one of the latest indications that governmental agencies and independent regulators, alike, are increasing their attention to the rising number of Environmental, Social, and Governance claims being made in the marketplace. In a determination issued last month, the National Advertising Division (“NAD”), a division of the independent, non-profit BBB National Programs, stated that certain environmental benefit claims that Everlane made on its e-commerce site in connection with its ReNew line of clothing are sufficiently supported by evidence, but others, namely ones in which it asserts that certain products are made using dyes that are “safer for the environment” should be modified to include clarification for consumers.  

In connection with its investigation into the Everlane’s marketing language, which stemmed from the “independent monitoring of truth and transparency in U.S. national advertising” that it routinely carries out, the NAD pointed to four different types of claims made by the San Francisco-based apparel company: aspirational claims, recycled materials claims, claims about the number of recycled bottles, and “safer for the environment” claims.  

Everlane Environmental Benefit Claims

Primarily, the truth-in-advertising entity looked at the aspirational claims that Everlane made, namely, that “in 2018, we set out to remove virgin plastic from our entire supply chain by 2021,” as part of a “no new plastic” initiative. While aspirational in nature, the NAD determined that Everlane “provided a reasonable basis” for making the “No New Plastic” claim because it is limited to “a specific environmental benefit” – removing all virgin plastic from its supply chain – and asserted that the company’s website explains how far it has come in achieving this goal.

Everlane No New Plastic ad

Second, the NAD referred to Everlane’s statements about certain products being “made from recycled plastic bottles, [thereby] diverting waste from landfills and lessening dependency on fossil fuels.” The NAD also determined that this is also a qualified claim based on Everlane’s compliance with Global Recycled Standard, a voluntary international standard that relies on well-established international and regulatory guidance for what constitutes recycled content, including the Federal Trade Commission’s Guides for the Use of Environmental Marketing Claims. 

Third, the NAD pointed to Everlane claims about the number of bottles used to make individual garments, such as specifying that “60 plastic bottles [are] renewed” to make its parka, and 15 are renewed to make its “half zip,” as well as its “the sweatshirt” styles. These claims are also above-board in the eyes of the NAD, as Everlane explained that its mills and yarn spinners work with plastic pellet producers to calculate the quantity of plastic needed to produce recycled polyester yarns, which the mills then use to calculate the amount of plastic used to create the finished fabric per yard. 

And finally, the NAD turned to claims that Everlane made about its use of bluesign®-approved dyes, which it says are “safer for dyehouse workers and better for the environment.” Despite signing off on the previous claims, the NAD pushed back here, recommending that the “Safer for the Environment” claim be modified because “in context [it] does not make clear that chemical safety is one aspect of a larger 5-point environmental impact assessment,” nor does it specify that Everlane’s use of Bluesign is in a nascent stage.” Specifically, the NAD suggested that Everlane explain that Bluesign is an independent third-party certification designed to remove harmful chemicals from the manufacturing process, and that its adoption of the certification is still limited, as “at present, 12 percent of Everlane’s mills (fabric suppliers) and 10 percent of its factories (finished goods suppliers) are Bluesign-certified.” 

Everlane product description

The NAD stated in its determination that during the pendency of the proceeding, Everlane opted to permanently discontinue a couple of additional sustainability claims, and so, the ad watchdog did not review those claims on the merits. These included Everlane’s previously-used assertion that the “[number increasing quickly to the millions] plastic bottles [were] made since you landed on this page,” and its claim that it “plastic is a really big problem,” but that it has found a way to “take the plastic that is already here and turn it into something meaningful” by way of ReNew, “a collection of outerwear made from discarded plastic bottles, about 3 million of them … Made to last for decades instead of seconds.” 

In response to the NAD’s findings, Everlane said that it “agrees to comply with NAD’s recommendations,” further stating that it was “happy to work with the NAD to share information that supports our claims around our environmental initiatives.”

The Role of Aspirational ESG Claims

The NAD’s determination comes as companies continue to make a growing number of Environmental, Social, and Governance claims in government filings and marketing campaigns in order to lure investors and consumers amid an overarching push to address climate change. And in putting sustainability at the center of their models, many companies are winning over shoppers and investors, with Bank of America recently reporting that $3 out of every $10 going into global equities is being directed into ESG. At the same time, “The environment was ranked as the most important political and social issue by teens in Fall 2021, according to the Piper Sandler “Taking Stock With Teens” survey,” which CNBC recently noted is a signal that this younger demographic may be filled with potential buyers of ESG-friendly brand Allbirds, as well as the likes of Everlane and co.

In furtherance of the move to put sustainability (and ESG more broadly) at the center of their operations (or at the very least, at the center of their marketing endeavors), many brands have taken to making aspirational statements about what they aim to or hope to achieve in the future. A motivating factor behind the adoption of aspirational claims is that these claims (paired with a whole slew of legally undefined “green” terms) have generally posed less risk from a truth-in-advertising perspective.

However, as companies become more aggressive with their claims and as regulators continue to focus their attention on ESG issues, that hard-and-fast rule about aspirational claims being a safe haven is proving to be questionable. “Aspirational claims can be tricky to substantiate because you cannot prove what has not happened,” according to Kelley Drye’s Gonzalo Mon and Christie Grymes. That does not mean, of course, that a company “can just rest on good intentions.” In fact, the NAD has held that “an advertiser must be able to demonstrate that its goals and aspirations are not merely illusory and to provide evidence of the steps it is taking to reach its stated goal.” 

In light of ever-growing attempts by companies to bolster their bottom lines by way of ESG and sustainability messaging, including a slew of more-ambitious-than-objective statements, market players need to be sure “not to undercut their public statements with contradictory actions,” per Bracewell LLP’s Keith Blackman, Joshua Klein, Rachel Goldman and Russell Gallaro, who note that “a few companies have already been the target of lawsuits claiming that [they] failed to live up to their aspirational statements.” 

Coca-Cola, for instance, landed on the receiving end of litigation earlier this year related to its ESG claims, including aspirational ones, such as how it aims to “make 100% of our packaging recyclable globally by 2025,” and that “part of our sustainability plan is to help collect and recycle a bottle or can for every one we sell globally by 2030.” According to Plaintiff Earth Island Institute’s complaint, Coca-Cola’s marketing violates the District of Columbia Consumer Protection Procedures Act, as it serves to mislead consumers in believing that it is a sustainable company. In actuality, Earth Island claims that “Coca-Cola is the world’s leading plastic waste producer.”

At the same time, another recent NAD determination involving Georgia-Pacific focused, in part, on aspirational claims, including Georgia-Pacific’s assertions that “3 trees planted for every tree used” and that its “plan is to plant 2 million new trees by the end of 2021” in connection with its Quilted Northern Ultra Soft & Strong Bathroom Tissue product. As support for its claim that “3 trees [are] planted for every tree used,” Georgia-Pacific demonstrated that it “accurately tracks the number of trees consumed throughout its manufacturing process and that it can ensure that three trees are regrown for each tree used.” And in terms of the aspirational claim that “our plan is to plant 2 million new trees by the end of 2021,” the NAD concluded that the advertiser “adequately demonstrated that it is commitment” by “implementing a plan to do so.” 

While both Everlane and Georgia-Pacific were able to withstand NAD scrutiny over the aspirational sustainability claims, the attention by the watchdog to such claims is, nonetheless, a notable indication of the types of claims that it considers to be worthy of investigation and of substantiation, i.e., these are not merely puffery-type claims. In the same vein, the Coca-Cola case and one filed against Walmart by the National Consumers League before that on the basis of aspirational claims are also significant indicators of what types of advertising claims that plaintiffs and their counsels deem to be viable bases for litigation.

With such attention to aspirational claims in mind and given the increasingly blurry line between concrete statements and forward-looking ones when it comes to risk of NAD attention and/or legal action, companies are encouraged to pay close attention to the accuracy of all of their ESG disclosures, including aspirational ones, and have evidence – even if it is in the form of a future-looking plan in connection with which progress is actively being made – to back up such claims, as they cannot be assumed to be outside of the bounds of truth-in-advertising actions. 

This article was updated to clarify that NAD is division of the independent, non-profit BBB National Program.

Warby Parker has responded to a lawsuit accusing it of attempting to confuse consumers into believing that its products are affiliated with those offered up by 1-800 Contacts. In the trademark infringement, unfair competition, and deceptive advertising practices suit that 1-800 Contacts filed with the U.S. District Court for the Southern District of New York in August, the 26-year old contacts company accuses the newly-publicly traded Warby Parker of adopting a website that allegedly “mimics the look and feel of 1800contacts.com” and of bidding on 1-800 Contacts’ trademarks as search engine keywords to generate Warby Parker advertisements in an attempt to dupe consumers given its status as a relatively “new entrant in the online contact lens marketplace.” 

New York-based Warby Parker is now pushing back against 1-800 Contacts’ claims, taking issue with the plaintiff’s allegations that it engaged in an illegal pattern of “persistent and prevalent use” of 1-800 Contacts’ trademark, while also adopting a landing page “that deceptively and intentionally mimics the look and feel of the 1-800 Contacts website.” 

Primarily, Warby Parker denies that it hatched a “plan” to confuse or mislead consumers who seek to go to 1-800 Contacts’ e-commerce site or to “thwart consumers’ legitimate rights and expectations to find what they are looking for when searching for 1-800 Contacts’ products and services.” Despite 1-800 Contacts’ claim that Warby Parker engages in “unauthorized bidding on 1-800 Contacts’ trademarks as search engine keywords that generate Warby Parker advertisements” in furtherance of an attempt by the defendant to “trade off [the 1-800 Contacts] brand name and reputation,” Warby Parker argues that its use of keywords does not create a likelihood of confusion for consumers.

1-800 Contacts also alleges in its complaint – and Warby Parker has since denied – that Warby Parker makes “persistent and prevalent use of the 1-800 CONTACTS trademarks in keyword advertising” not only to confuse customers, but also to force 1-800 Contacts “to spend substantial resources” in order to “outbid Warby Parker virtually every day to combat the likelihood of consumer confusion and deception caused by Warby Parker’s scheme” and ensure that consumers are not misled.

In a subsequent letter to the court dated November 6, counsel for Warby Parker states that 1-800 Contacts “mistakenly claims that the purchase of a competitor’s trademarks for keyword advertising may create liability for trademark infringement.” In reality, the defendant’s counsel states that in a case that 1-800 Contacts “cites extensively,” the Southern District of New York found that “[u]nder the Lanham Act,’ [v]irtually no court has held that, on its own, a defendant’s purchase of a plaintiff’s mark as a keyword term is sufficient for liability,’” and thus, a plaintiff must also “plausibly allege likelihood of confusion,” which 1-800 Contacts has not done here, per Warby Parker. 

Beyond that, in the answer that it filed in October, Warby Parker takes aim at 1-800 Contacts’ assertion that it “possesses a valid, protectable proprietary interest in the ‘look and feel’” of its website – namely, “the prominently featured shade of light blue on its homepage,” as well as “the light blue rectangular shaded box that spans most of the screen in a horizontal configuration and displays representative contact lens product packages to the right of a discount offer to ‘Get 20% off your first order.’” 

According to Warby Parker, no such interest exists and despite 1-800 Contacts’ claims to the contrary, the design of its site has not acquired distinctiveness. Warby Parker argues that 1-800 Contacts does not maintain rights in the appearance of its website, in part, because “multiple companies selling contact lenses online use the color blue and/or the same general layout as referenced [by 1-800 Contacts] in connection with their online promotion, advertisement, and sale of contact lenses,” making it so that the design is not distinctive and has not acquired secondary meaning in the minds of consumers. And to prove its point, Warby Parker points to “multiple third-party websites that present some combination of … (i) a blue and/or a rectangular shaded box that spans most of the screen; (ii) a display of representative contact lens products; and (iii) and a discount offer.” 

In its November 8 letter to the court, Warby Parker doubles-down on its criticism of 1-800 Contacts’ trade dress claims, stating that the plaintiff “errs in cloaking its likelihood of confusion argument in the language of trade dress infringement when it knows that it cannot (and will not) allege that the website has non-functional, distinctive design elements that have acquired secondary meaning.” 1-800 Contacts “cannot have it both ways,” per Warby Parker, in that it cannot “plead that consumers will be confused because [Warby Parker] has imitated [its] website but not actually allege that [its] website has any trade dress which consumers have come to associate with the brand.”

With the foregoing in mind, Warby Parker sets out a single affirmative defense, alleging that 1-800 Contacts fails to state a claim upon which relief can be granted, as it “cannot sustain its trademark infringement and unfair competition claims … on the bare allegation that [Warby Parker] used the ‘1 800 CONTACTS trademarks’ in connection with keyword advertising.” In addition, Warby Parker contends that “courts in this jurisdiction, including the Second Circuit” have held that use of a competitor’s trademarks in keyword advertising is “not sufficient to support a claim of trademark infringement,” further noting that “nothing alleged in or attached to the complaint provides any plausible factual support for the confusion element of the plaintiff’s unfair competition and false designation of origin claims,” and amounts to “generalized, conclusory assertions that [its] conduct” runs afoul of the law. 

Websites as Trade Dress

Not the first company to make website design-specific trade dress claims, the 1-800 Contacts case comes as a growing number of companies have made similar claims, including Daily Harvest, which filed against Revive, alleging that its fellow frozen foods company copied not only its product packaging but the design of its website. In that since-settled case, Daily Harvest asserted that it maintains trade dress rights in the “look and feel” of its e-commerce site – from “the home page, [which consists of] a vivid and colorful photograph of a line-up of prepared products topped with garnishes, with a black, rectangular call to action button prompting consumers in white lettering to ‘Get Started’” to “the subpages, [which] feature rows and columns of images of Daily Harvest’s lineup of products.” 

Having used such “inherently distinctive” branding consistently since April 2016, Daily Harvest claimed in its April 2020 complaint that “consumers have come to immediately identify Daily Harvest as the exclusive source of products bearing and/or offered in connection with the trade dress,” including products sold by way of its website. 

In response to the case, Revive characterized Daily Harvest’s trade dress claims (and its case as a whole) as devoid of merit, arguing, among other things, that Daily Harvest’s alleged website trade dress is not distinctive, “meaning that the design of the website itself is not an indicator of source.” Revive argued that Daily Harvest’s “website is a compilation of common ornamental and functional features that are neither inherently distinctive nor have they acquired distinctiveness.” 

Rising Similarity

Website – and app-based – trademark infringement claims (and the arguments made in response in the 1-800 Contacts and Daily Harvest cases, among others) are likely to keep surfacing in litigation in the future as companies continue to rely heavily on their e-commerce sites as a critical sales channel (and as companies spin off their e-comm divisions as significant sources of value)even as surging online sales growth has started to normalize in the wake of the pandemic. 

While trademark law serves as a source of protection for a wide array of source-identifying elements – from logos and colors to product packaging and even elements of products, themselves, infringement arguments that rely on website design as trade dress are not easy to sustain for a number of reasons. Among other things, plaintiffs must be able to properly describe the trade dress, which has proven a problem in more than onw website trade dress case. They must also establish that the trade dress is not functional; that it is either inherently distinctive or has acquired secondary meaning; and that there is a likelihood of confusion between its trade dress and the alleging infringing use. (Warby Parker claims that 1-800 Contacts fails on each of these fronts.)

In terms of distinctiveness, it seems to me that one of the challenging elements stems from the overarching similarity that exists among most websites. For instance, after running a series of data mining studies that scrutinized nearly 200,000 images across 10,000 websites, Sam Goree, a PhD Student in Informatics at the Indiana University, and his colleagues Bardia Doosti, David Crandall, and Norman Su found that across three metrics – color, layout and AI-generated attributes, the average differences between websites in declining, which the academics claim confirms their suspicions that websites are becoming more similar. 

As for what can be made of this creeping conformity, they say that “adhering to trends is totally normal in other realms of design, like fashion or architecture,” and so, it makes sense for companies to look to – and adopt – the same design trends when it comes to their websites. (In furtherance of the Instagram aesthetic, for example, a large pool of buzzy direct-to-consumer brands have drawn from “a relatively small set of design codes” to attract millennial consumers.) 

At the same time, “The use of software libraries – which feature collections of generic code for common tasks, like resizing a page for mobile devices or making a hamburger menu slide in and out – has increased a lot, thereby, explaining some of the commonality among sites that use certain less-flexible libraries,” per Goree. This is also true given that no shortage of companies use the same e-commerce or other website platforms, whether it be WordPress or Shopify, etc. 

Ultimately, the fact that websites are “morphing into uniformity,” as Goree and co. put it, could mean two things: (1) it give rise to more website-centric trade dress lawsuits like the one at hand, and (2) it could make it even more difficult for companies to successfully argue that the elements of their websites taken together are able to act as identifiers of source. As such, companies will likely want to keep these considerations in mind if/when they build – or rebuild – their sites. Developing case law in this arena should also prove telling going forward. 

The case is 1-800 Contacts, Inc. v. Jand, Inc. d/b/a Warby Parker, 1:21-cv-06966 (SDNY).

SKIMS, the burgeoning loungewear brand of Kim Kardashian, might be eyeing an expansion. Amid the frenzy that was its recently-revealed collaboration with Fendi, one that reportedly generated $1 million in sales in just one minute this week, a trademark application for registration that counsel for the reality television mega-star’s company quietly filed last year with the U.S. Patent and Trademark Office for “Hims by Skims” for use on “Hats; Leggings; Loungewear; Shapewear; Slippers; Socks; Sweatpants; T-shirts; Underwear; Boxer briefs; Boxer shorts; Hoodies” surfaced, and it appears to suggest that a play by the almost three-year-old brand to enter into the menswear market is in the works. 

Skims’ November 2020 trademark application for registration was filed on an intent-to-use basis (and comes in lieu of any existing use of the “Hims” aspects of the mark by KKW and co. to date), which very well could mean that a men’s-focused venture called “Hims by Skims” may never actually come into fruition. The name and the potential use of it by Skims is interesting, nonetheless, as a result of the existence of another already-existing brand with a very similar name. That other market occupant is Hims, the four-year-old telehealth company that is in the business of doling out prescription and over-the-counter drugs, and supplements (namely, of the erectile dysfunction, hair loss, acne, and anxiety kind) online, while also selling personal care products for men. 

Sweatpants and supplements – and certainly prescription medication – occupy different segments of the market of one another, but a couple key things stand out (to me, at least) as worth considering in terms of possible confusion between Hims by Skims, and Hims – which filed a trademark application for registration of its own in October 2021 in Class 3 for use on everything from shampoo and cologne to anti-wrinkle cream and facial moisturizers – and thus, prospective pushback should Kim’s Skims make a move towards male consumers.

The Zone of Expansion

The primary point worth considering is the zone of natural expansion, a trademark doctrine that essentially holds that a trademark holder’s existing rights can be extended to other areas of the market that it would reasonably be expected to enter. For a recent example of how this works, the organizers of Woodstock argued in the case that they filed in a New York federal court in 2018 that while their main business centers on festival production, the sale of recreational marijuana is within the zone of expansion of such entertainment services, and thus, they are not running afoul of the rights of other entities with federally registered “Woodstock” trademarks for smoking-related items by using the festival’s name on recreational marijuana products. In February, the U.S. Circuit Court of Appeals for the Second Circuit upheld the U.S. District Court for the Southern District of New York’s preliminary injunction in favor of the Woodstock organizers.

The zone of expansion issue also came up in the since-resolved squabble between Off-White and S.C. Johnson over their respective OFF trademarks, with the multinational consumer packaged goods and chemicals company arguing that its products and those of Off-White are not only “likely to be marketed and sold to the same consumers, and move in the same channels of trade,” but Off-White’s goods, namely bags in this case, “are in the likely zone of expansion for goods sold by S.C. Johnson under the OFF! marks,” thereby, leading to further potential for confusion.

And still yet, in a zone of expansion-esque argument of its own, Zara managed to successfully put a stop to the registration of the “Zara Tanzania Adventures” trademark for use in Classes 39 (travel and tourism services), 41 (wildlife education and training services, ecology, safaris) and 43 (travel agency and hotel services) back in 2019. At the time, K&L Gates’ Simon Casinader and Daniel Cartmell noted that the Spanish fast fashion brand’s win before the Court of Justice of the European Union “demonstrates the far reaching, evolving nature of fashion brands, and the markets they can operate in and are expanding into.”

The zone of expansion theory could prove a useful tool for Hims – which along with its female-focused counterpart Hers, boasts more than 500,000 subscription members – should it add merch to its offerings. The company is, after all, in the midst of expansion, unveiling a new app this week, complete with a “Member Store” that the San Francisco-based company says will “bring together the entirety of the Hims & Hers product portfolio – from supplements to support sleep to products tackling hair-loss – into one simple and personalized space.”

Since the app is the first step in a larger roll out of “additional educational programs, wellness content, community support, and other services” – and presumably, other goods – “over time and based on the needs and feedback of consumers,” and a move to brick-and-mortar by way of a newly-announced partnership with Walgreens, it is not difficult to imagine Hims attempting to bolster its “community” with branded products, such as t-shirts or even underwear (the latter of which is not light-years removed from erectile dysfunction medication) in the same way as so many other buzzy direct-to-consumer companies have done. 

One company that comes to mind is Glossier, which got its start exclusively selling cosmetics and has since expanded into apparel and accessories, including branded hoodies, bags, and water bottles. If its pending trademark applications are any indication, Glossier is looking to expand further into the market via vitamins and supplements, as well as home-oriented offerings like candles. 

There are seemingly countless other examples, as companies continue to blur the lines between traditional offerings and those that can be expected from a modern company catering to brand-happy, community-leaning millennials. Peloton has workout offerings and sells a lot of them; the interactive fitness platform sold 600,000 units of branded apparel in Q4 of 2020. The Ritz Paris has teamed up with Frame for a collab of trademark-bearing wares. Shaving company Harry’s has expanded beyond razors, and has hats, fanny packs, and boxers currently up for sale on its e-commerce site. Alcohol brand Haus offers up branded tote bags. Hell, even Soylent has merch if you want to proclaim your love for soy-based meal-replacement drinks through branded t-shirts, sweatshirts, and hats. 

Against this background and given that just about every buzzy company – from drink-makers to exercise bike companies – is first and foremost a brand (and ideally, an Instagram-friendly one) that happens to also sell products/services, it probably is not a stretch to argue that merch is absolutely within the realm of imaginable expansion for Hims (and also Hers). As for whether anyone would want to wear the name of the company that provides them with acne or anxiety medication is, of course, another matter. 

Collaboration >> Confusion

The other key point worth considering here is the role that collaborations – and the emerging adoption of some interesting new examples of co-branding – play when it comes to the issue of potential confusion (i.e., the core element at the heart of a trademark infringement claim). As TFL wrote back in at least 2017, the onslaught of branded collabs that has become the norm for fashion brands and consumer products-makers more broadly has likely made it so that consumers are increasingly susceptible to confusion about the source of goods/services, as sometimes the source can be more than one entity. In other words and in light of the continued reliance by companies on creativity-by-collaboration (as opposed to actual creativity, one might argue), it is entirely likely that any given product in the market is the result of a collaboration and/or that an ever-growing list of brands are engaging in such collaborative efforts, thereby, blurring the line between respective brands’ offerings.

(Burberry actually argued this point in the trademark lawsuit that it filed against Target in 2018, in which its counsel claimed that consumer confusion was likely to abound in connection with the checkered wares being sold by the retail chain due to “Target’s well-publicized history of collaborating with popular brands and fashion designers to promote and sell Target-exclusive limited-edition collections.” In other words, because Target has engaged in a string of collaborations in the past, who is to easily say if something is or is not the product of a collaboration going forward?)

The chance of confusion is heightened by the inter-industry tie-ups that continue to make their way to market with regularity, whether it be co-branded home furnishings from Off-White and Ikea, apparel from Proenza Schouler and Mercedes-Benz, or a cartoon that consists of both Balenciaga wares and the Simpsons. Beyond that, there are the tie-ups between arguably unlikely bedfellows, such as LVMH-owned Fendi and Capri-owned Versace, stalwart jewelry company Tiffany & Co. and hyped streetwear brand Supreme, or loungewear company Skims and high fashion house Fendi. 

And still yet, the potential for confusion is increased even more by the fact that a growing number of products are coming to market bearing the mashed-together trademarks of more than one market entity. Fendace, anyone? How about Gucci bags with Balenciaga branding on them? If you are not confused (even for just a minute), there is a chance that you might not be paying close attention.

Ultimately, the reality is that in an effort to consistently create novelty to attract consumers, almost any combination could make for an often-heavily-hyped collaboration. Crocs x Hidden Valley Ranch comes to mind as just one example. At the same time, it seems that far fewer things are being left off the table in terms of what the reasonable zone of expansion for a brand could/should look like. And all the while, trademarks, themselves, are readily taking a wide range of forms – from red zip tie and pink bubble wrap pouches to mashed up marks from different companies (a la Yeezy Gap and Gucci x Balenciaga branding). Taken all together, this could make Hims by Skims – and a whole slew of other examples – a confusing prospect for consumers when it comes to the notion of source. 

It will be interesting to see what – if anything – happens if/when Kardashian’s brand actually begins using Hims by Skims in commerce; the USPTO issued a notice of allowance for the mark in May and last month, it approved Skims’ first request for an Extension of Time to File a Statement of Use. Should Hims take action, it would not be the first time that a Kardashian business has faced pushback over a trademark. In fact, Kim was embroiled in a separate trademark tangle over the name for her skincare venture, SKKN and SKKN by Kim, this summer, after filing trademark applications for registration for those names.

Warby Parker is looking to tap into the pool of millions of customers that 1-800 Contacts has amassed as a result of more than a decade in business and hundreds of millions of dollars worth of “advertising, marketing, and promotion,” the Draper, Utah-based contacts company argues in a new lawsuit. According to the complaint that it filed in a New York federal court on Wednesday, 1-800 Contacts asserts that JAND, Inc., d/b/a Warby Parker is engaging in “continuing trademark infringement, unfair competition, and deceptive advertising practices” in an effort to attract consumers given its status as a “new entrant in the online contact lens marketplace.” 

In the newly-filed complaint, 1-800 Contacts alleges that in light of its “relatively low consumer recognition for contacts,” and “instead of independently developing its own brand awareness related to the online sales of contacts,” direct-to-consumer pioneer Warby Parker “has devised a plan to confuse and mislead consumers who seek to go to 1-800 Contacts’ online store.” Primarily a retailer of eyeglasses, Warby Parker is “trad[ing] off 1-800 Contacts’ brand name and reputation through unauthorized bidding on 1-800 Contacts’ trademarks as search engine keywords that generate Warby Parker advertisements,” 1-800 Contacts claims. 

1-800 Contacts alleges that Warby Parker “bids on 1-800 Contacts’ distinctive trademarks to make search engine keyword purchases with Google and other search engines, [and] by doing so, arranges to place its own ads at or near the top of the Google search results page that appears after a consumer searches for 1-800 Contacts or one of its trademarks.” The real kicker for 1-800 Contacts, however, is what comes next: Once consumers are presented with Warby Parker ads that “appear to be from 1-800 Contacts or an approved affiliate, licensee, or associate of 1-800 Contacts,” Warby Parker links those ads to “a Warby Parker landing webpage that deceptively and intentionally mimics the look and feel of 1-800 Contacts’ website, including through use of a confusingly similar color scheme, layout, and discount offering, along with imagery evoking the 1800contacts.com website.” 

Specifically, 1-800 Contacts claims that the link takes consumers to “a unique warbyparker.com landing webpage that is different from the look and feel of Warby Parker’s homepage and that features coloring and a presentation that is confusingly similar to 1-800 Contacts’ website.” Among the elements that make up the allegedly “distinctive look and feel” of the 1-800 Contacts site: “the prominently featured shade of light blue on its homepage,” as well as “the light blue rectangular shaded box that spans most of the screen in a horizontal configuration and displays representative contact lens product packages to the right of a discount offer to ‘Get 20% off your first order.’” 

In late December 2020, 1-800 Contacts claims that “Warby Parker revamped the ad [home] page color scheme and layout to even more closely resemble the updated 1800contacts.com website homepage layout adopted in April 2020 … by transitioning the blue rectangular box [on the homepage] from one shade of blue to a lighter shade of blue that is nearly the same shade as the light blue rectangular box displayed on 1-800 Contacts’ standard website homepage.” More than that, Warby Parker also allegedly “began displaying—in the light blue rectangular box—contact lens product packaging images and a discount offer to ‘Get 15% off your first contacts order.’” 

Warby Parker’s plan is particularly harmful, per 1-800 Contacts, as it “creates a particularly significant likelihood of confusion for consumers who engage in navigational searches,” the primary purpose of which is to locate a specific website. Because consumers are being served Warby Parker ads when they search for the 1-800 Contacts brand name, as opposed to merely a general product name, the plaintiff asserts that Warby Parker “intentionally deceives and confuses consumers, who have a reasonable and legitimate expectation that their searches for the well-known 1-800 CONTACTS marks will lead them to 1-800 Contacts’ website, products, and services, not to a page created by a competitor seeking to pass itself off as 1-800 Contacts or an affiliate or licensee of 1-800 Contacts.” 

In addition to confusing consumers, Warby Parker “has usurped and continues to usurp the valuable goodwill that 1-800 Contacts has built in its marks through the high quality of its offerings, its exceptional customer service, and its substantial investments in advertising, marketing, and promotions,” the online-only contacts-maker claims.  

Warby Parker’s main homepage

With the foregoing in mind, 1-800 Contacts sets out claims of trademark infringement and unfair competition, and is seeking unspecified monetary damages, as well as injunctive relief to bar Warby Parker – which is slated to go public in the near future – “using any of the 1 800 CONTACTS trademarks or any confusingly similar mark, name, domain name, or colorable imitation thereof,” in connection with its business, among other things. 

The case is the latest in a running list of trademark actions initiated by 1-800 Contacts against competitors for bidding on its trademark-protected name as a keyword, settling a large majority of those cases, and giving rise to the Federal Trade Commission taking on the contacts company on the basis that some of the restrictions in 1-800 Contacts’ settlement agreements unfairly restricted competitors’ search advertising practices. 

More than Just Keywords

While “competitive keyword advertising lawsuits are still stupid, and they are still typically doomed in court,” as Santa Clara University School of Law professor Eric Goldman put it not too long ago, this case is a bit more interesting than a run of the mill keyword matter thanks to 1-800 Contacts claims that Warby Parker is going a step beyond bidding for its trademarks in a search capacity, and utilizing a website that looks like the 1-800 Contact site – which differs in color, layout, and content from Warby Parker’s main e-commerce homepage – in order to dupe consumers.

The case is also intriguing, as it is not the only recent matter in which one DTC company has accused another of ripping off the look and feel of its website. You may recall that in a short-lived trademark and copyright case that Daily Harvest filed against Revive in April 2020, the mighty and heavily funded DTC player accused its fellow frozen food company of scheming to “free-ride [on its] coattails” by adopting “an identical and confusingly similar website design, content, product packaging, [and] images” as it sought to expand its reach from its native Canada into the U.S. market.

Just like in the Daily Harvest case, which settled less than a year after it was filed, if 1-800 Contacts’ history is any indication, this case will settle out of court, too. Nonetheless, both cases are striking, as they drive home the point that many companies’ most valuable components are not necessarily the products, themselves, but branding-specific assets, including “distinctive” e-commerce sites that they use to sell those products.  

As I noted in connection with the Daily Harvest case, this emphasis on branding is, of course, not new to or exclusive to DTC players, and in the DTC space, the products, themselves, certainly are not irrelevant. At the same time, though, it is difficult to ignore the fact that one of the key distinguishing factors for many of these DTC companies is not necessarily earth-shattering, impossible-to-get-elsewhere products, but the branding – and marketing – and related elements at play. This has likely been made only more important in the wake of the COVID-19 pandemic and the spike on e-commerce sales, which is expected to endure not only generally (as consumers have become significantly more comfortable purchasing anything and almost everything online), but also in light of the spread of new variants, which are swiftly diminishing consumer confidence in frequenting brick-and-mortar stores when they could achieve the same result online. 

A rep for Warby Parker was not immediately available for comment. 

The case is 1-800 Contacts, Inc. v. Jand, Inc. d/b/a Warby Parker, 1:21-cv-06966 (SDNY).

Allbirds has built a $1 billion brand of footwear that has been coined as making “Silicon Valley’s favorite shoes,” in the process has “beaten the odds in the startup world by raising a quarter of a billion dollars and turning earth-friendly wool sneakers into a legit product category,” as Fortune put it early this year. In addition to amassing fans across the globe and investors like Tiger Global Management, Lerer Hippeau, Fidelity, and T. Rowe Price, which have poured upwards of $200 million into the company, Allbirds has garnered the attention of a class of plaintiffs that claim that it is not living up to the claims that is makes in its sustainability-centric marketing, including about the carbon footprint of its products, and its “sustainable” and “responsible” manufacturing practices. 

According to the complaint that she filed in a New York federal court earlier this summer, plaintiff Patricia Dwyer claims that Allbirds knows that “consumers are increasingly influenced by the business practices of companies they choose to engage with, [and that] factors important to consumers include whether a company acts in way that protects the environment, labor practices and animal welfare.” The brand’s “marketing is based on all these factors, which has helped it become worth over one billion dollars,” Dwyer asserts. However, she argues that despite its advertising being “replete with eco-friendly phrases,” the reality of Allbirds’ operations does not match that “eco-friendly”-focused marketing, and the footwear brand is peddling “false, deceptive and misleading” information. 

Specifically, Dwyer alleges that Allbirds’ life cycle assessment tool – which identifies the carbon footprint of each product – does not assess the environmental impact beyond the manufacturing of the shoes, themselves, such as the impact of “wool production, including on water, eutrophication, or land occupation,” and thus, “exclude[es] almost half of wool’s environmental impact.” At the same time, the plaintiff claims carbon footprint figures “are based on ‘the most conservative assumption for each calculation, skewing the calculations in its own favor,’ so it can make more significant environmental claims.” 

Beyond that, Dwyer asserts in the complaint that Allbirds makes “misleading animal welfare claims,” including by “promot[ing] the ‘happy’ sheep” whose wool is at the heart of its products. “Allbirds has claimed that its wool harvesting practices are sustainable [and] humane,” per Dwyer. However,  she argues that “based on investigations into more than 100 large-scale wool operations, most of which had been promoted in the same terms used by Allbirds – as ‘sustainable’ and ‘responsible’ – ‘workers beat, stomped on, cut open the skin of, and slit the throats of conscious, struggling sheep,’” practices that are “neither sustainable nor humane.” 

Still yet, Dwyer argues that Allbirds’ “emphasis on ‘transparency’ is also false, deceptive and misleading, ‘as it stonewalls any enquiries into its wool sourcing,’” and that its products “contain other representations that are false and misleading,” which is problematic, as “reasonable consumers must and do rely on a company to honestly identify and describe the components, attributes and features of [its] products, relative to itself and other comparable products or alternatives.” 

Sustainability claims are not inconsequential, Dwyer argues, as they add value to the products in connection with which they are attached, and enable companies to charge more. “Had [she] and the proposed class members known the truth [about Allbirds’ products], they would not have bought the products or would have paid less for them,” Dwyer argues, claiming that Allbirds not only “sold more of the products … than it would have in the absence of this misconduct,” it also sold them “at higher prices.” In short: “If Allbirds were required to either truthfully disclose the practices which provide the wool for its shoes, or if it refrained from representing its ‘humane’ and “animal-friendly’ attributes, fewer people would buy the shoes.” 

Allbirds formally responded by way of an answer, complete with an array of affirmative defenses, dated July 17. In addition to asserting that Dwyer’s and putative class members’ claims are barred, in whole or in part, due to “a lack of standing and failure to establish any cognizable injury,” and that Dwyer “fails to and cannot prove money damages with any degree of certainty sufficient to permit recovery of damages,” Allbirds claims that its actions were “authorized by the applicable law and thus, are not actionable,” and that Dwyer’s claims are barred because “Allbirds was not under a legal duty to disclose the allegedly concealed facts.” 

THE BROAD VIEW: The case is striking, as it is one of a handful of recent class action complaints that aim to hold companies accountable for sustainability centric advertising claims that may have previously been viewed – and treated – as unactionable, due, in large part, to a lack of formal definitions for terms in the “green” vein. “With no consensus of a standard to use to verify the meaning of sustainability, using the term in a marketing context creates some risk,” Crowell & Moring’s Cheryl Falvey wrote back in 2013, noting, however, that sustainability claims that “relate solely to aspirations and goals … can be used.” 

This case and others demonstrate that this appears to be changing. Canada Goose, for instance, is currently in the midst of a false advertising suit for allegedly misleading consumers about the nature of the trapping methods used to source the fur for its buzzy jackets by claiming that it is dedicated to “the ethical, responsible, and sustainable sourcing and use of real fur.” 

The sheer amount of companies that are pushing products by way of sustainability and other eco-friendly claims and the largely unrelated nature of such uses will likely lead to more cases in the space, and the outcomes may not bode well for brands based on at least some of the early determinations of Southern District of New York Judge Victor Marrero in the Canada Goose case, in which he refused to toss out a false advertising claim on the basis that the plaintiff plausibly alleged that Canada Goose’s statement that it is committed to “ethical, responsible, and sustainable sourcing” could prove misleading to a reasonable consumer.

With these cases and others in mind, and as brands – and regulators – continue to grapple with what it means to be “green,” “sustainable,” or “eco-friendly,” companies are encouraged to “pay attention to their advertising when they make claims regarding their positive environmental impact,” per Perkins Coie’s Amanda Beane, Jason Howell, and Emily Cooper. “Given the risk of regulatory enforcement, competitor challenges, and class actions, companies should keep the Federal Trade Commission’s Green Guides, state regulations, and general truth-in-advertising laws in mind and closely scrutinize broad environmentally-friendly marketing and labeling claims.” 

The case is Patricia Dwyer v. Allbirds, Inc., 7:21-cv-05238 (SDNY).