McKool Smith principal Nick Matich provided commentary to the World Trademark Review article, “‘The Second Circuit Got It Right’: FTC Decision Reversed in Trademark Agreements Dispute,” on the Second Circuit reversed a Federal Trade Commission (FTC) decision which held that a series of trademark agreements between online contact lens company 1-800 Contacts and its competitors focusing on keyword advertising restrained competition. Nick said, “This decision is very good for parties to trademark disputes and should provide clarity for settlement negotiations. The FTC clearly disagreed with the merits of 1-800 Contacts' claims in the litigation it settled, but the claims were brought in good faith and settled in an area of law that was, and still is, developing. Particularly strange was the FTC’s seeming desire to lay down a per se rule about consumer confusion in internet advertising, an area that is usually fairly fact-specific. Subjecting parties that settle reasonable disagreements in the face of legal and factual uncertainty to later antitrust scrutiny would have deterred settlements and prolonged litigation unnecessarily. The Second Circuit got it right.” Read the article here.


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