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Considerations for granting TM rights after Circ. 2. Decision

By David N. Costello
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By Kimberly Culp and Alyssa Crooke (October 1, 2021, 3:53 p.m. EDT) – On August 26, the United States Court of Appeals for the Second Circuit refused to rehear In Re: 1-800 Contacts Inc., in which the June court opinion rejected the use of the “inherently suspect” framework for trademark settlement agreements, simultaneously creating a more favorable and unstable landscape for parties entering into trademark rights agreements.

The initial complaint

In 2016, the Federal Trade Commission filed an administrative complaint against 1-800 Contacts, alleging that its practice of entering into competitive bidding agreements violated Section 5 of the Federal Trade Commission Act.[1]

The agreements at issue prohibited both 1-800 Contacts and many of its competitors from …

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David N. Costello
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