1-800 Contacts v. Federal Trade Commission, 2nd Cir., No. 18-3848, amicus brief filed 06/14/2019. June 14, 2019

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At issue in this case are commonplace settlement agreements in which the parties agree to dismiss trademark infringement lawsuits on the conditions that the alleged infringers no longer advertise using specific keywords and that they purchase negative keywords preventing their advertisements from displaying whenever an Internet search includes the plaintiff’s marks.

 

The Commission erred in multiple respects in holding, many years later, that the parties’ agreed-upon advertising prohibitions unreasonably restrain trade in violation of the Federal Trade Commission Act.

 

First, the Commission erred in presuming that the settlements were unlawful instead of applying a rule-of-reason antitrust analysis.

 

Second, the vague “minimum threshold of validity” antitrust standard pro-posed by the Commission goes against precedent and decreases predictability and reliability.

 

In light of these errors, AIPLA respectfully urges the Court to vacate the Com-mission’s Order and remand this action for an application of the rule-of-reason standard.

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