Ditto Turns To Indiegogo For Help Battling Patent Lawsuits (Including One From 1-800-Contacts)

Ditto, a startup that helps users virtually try on different pairs of eyeglasses, has launched an Indiegogo campaign to help fight a big threat — the company says it's being sued by 1-800-CONTACTS and another company called Lennon Imaging Technology.

Ditto's technology allows users to create webcam recordings of their faces, which they then use to see how different designer glasses will look with their facial shape and size. Both Lennon Imaging and 1-800-CONTACTS are claiming that this technology infringes their own patents. But Ditto's campaign describes them as "patent troll" lawsuits — Lennon is a non-practicing company, meaning that it doesn't have a product or service of its own, and Ditto co-founder and CEO Kate Endress said 1-800-CONTACTS (which is owned by WellPoint) didn't purchase the patent in question until after the company's CEO visited the Ditto website.

1-800-CONTACTS did not respond when I emailed for comment. However, the Electronic Frontier Foundation published its own blog post in support of Ditto saying that 1-800-CONTACTS has "a long record of using the courts to bully its competitors." That prompted a complaint from the company's lawyer saying that 1-800-CONTACTS is not a patent troll. The EFF writes:

Sure, the company is not a classic patent troll — a shell company that does nothing but buy patents and sue—but it's little better. Patent trolls generally want to use the club of litigation to extort licensing fees. But all indications are that 1-800-CONTACTS isn't interested in a license from Ditto. Rather, it wants to destroy the competition.

Indeed, Endress said she's in a tough spot, where "we cannot afford to win" — in other words, the company doesn't have enough money to defend itself in court, and even though Ditto has raised venture funding, the threat of litigation scares off any additional investment. The company has already had to lay off three engineers, Endress said.

That's why the company has turned to Indiegogo to fund its legal efforts. (Endress said the money will only go towards legal costs.) So far, it has raised about $5,700 of its $30,000 goal. However, the campaign page states that Ditto is looking at $30,000 to $100,000 in legal fees over the next three to six months (and potentially much more afterwards), so I'm guessing Ditto could use a lot more help if possible.

Update: A 1-800-CONTACTS spokesperson just sent me the following statement:

1-800 CONTACTS has a history putting the consumer first by promoting competition. In fact, 1-800 CONTACTS spent years working in concert with consumer advocacy groups to support the passage of the Fairness to Contact Lens Consumers Act. This legislation was passed by Congress and gives all Americans the right to their contact lens prescription so they can choose where to purchase contact lenses. 1-800 CONTACTS also compelled the largest contact lens manufacturers to sell to Internet retailers. Both efforts were successful and led to a more open and competitive market that has benefitted numerous online competitors and ultimately, millions of consumers.

As a leading vision retailer, 1-800 CONTACTS recognized the need to improve the online purchasing options for eyeglasses and began developing an enhanced virtual try on system that would vastly improve the consumer experience. As part of our due diligence when developing our virtual try on technology, we investigated the existing rights in this space, as is standard practice. The granted patent that 1-800 CONTACTS purchased in 2012 entitled "Interactive try-on platform for eyeglasses" was filed in 2001 and granted in 2006. Like most other companies operating a business that depends on technology, 1-800 CONTACTS purchased this patent for a reason – the patent covered what the business was doing so the patent either needed to be licensed or purchased. Ditto could have licensed or purchased the same patent, but chose to ignore it and launched their website with an infringing virtual try on feature anyway.

1-800 CONTACTS began working on our virtual try on system for Glasses.com long before Ditto was formed as a company. Glasses.com had a working demonstration of its more robust 3D virtual try on system running in 2011 – before Ditto launched its website in April 2012. Members of the 1-800 CONTACTS team visited Ditto's website to try the virtual try on technology when it launched. Viewing competing products that are on the market is not unusual, and is in fact a responsible business practice.

1-800 CONTACTS has offered to discuss an amicable resolution to the lawsuit through licensing or other options, but instead of responding to our offer, Ditto has spent time and energy engaging in online discussions and issuing an inaccurate and misleading press release.

Ditto has found its strongest supporter in the Electronic Frontier Foundation (EFF), who has been quoted multiple times in blog articles and in Ditto's press release. What Ditto and the EFF failed to disclose is that three members of the advisory board at the Electronic Frontier Foundation all work for Durie Tangri – the same law firm representing Ditto in this case. It is disappointing that the EFF concealed this inherent bias from the public, instead holding itself out as an impartial observer.

1-800 CONTACTS will launch our virtual try on technology next month, providing an enhanced consumer shopping experience. Our approach has taken longer to bring to market, as we developed a revolutionary virtual try on system customized for the iPad. We were honored to present our ground-breaking technology at TED in February, where we also demonstrated the app 1,650 times on 100 iPads.

Complaint 1-800-Contact v. Ditto by TechCrunch

999 016 – Ditto Motion to Dismiss With Memo (00354120) by TechCrunch