Why it matters: On November 17, 2015, an International Trade Commission judge issued an initial ruling in In the Matter of Certain Footwear Products, the case brought by Converse in November 2014 against 31 companies for importing "look alike" footwear that infringed on Converse's iconic "Chuck Taylor" design in violation of Section 337(a) of the Tariff Act. Both sides claimed victory in the judge's ruling, which will now go before the full International Trade Commission for review. Read on for the details.
Detailed discussion: On November 17, 2015, Chief Administrative Law Judge (ALJ) Charles E. Bullock issued a 149-page initial determination ruling in In the Matter of Certain Footwear Products, the case Converse, Inc. (Converse) filed with the International Trade Commission (ITC) in October 2014 against 31 companies for importing "look alike" footwear that infringed on Converse's iconic "Chuck Taylor" design in violation of Section 337(a) of the Tariff Act of 1930 (Tariff Act). Specifically, Converse was asserting trademark rights in the midsole and outsole of Converse's Chuck Taylor All-Star Shoes (i.e., a front "bumper," a toe cap and side stripes), which it claimed the named companies were infringing through the importation into the United States of their copycat shoes. Most of the companies named in the suit had either settled with Converse or defaulted by the time the ITC evidentiary hearing commenced in August 2015, leaving only four respondents, Skechers, New Balance, Walmart and Highline d.b.a. Ash Footwear (collectively, "respondents") in the suit, each with "accused products" consisting of shoes sold under multiple product lines (e.g., New Balance's "PF Flyer" lines and Skechers' "BOBS," "Twinkle Toes," "Daddy'$ Money" and "HyDee HyTop" lines, to name just a few).
ALJ Bullock began his analysis by reviewing the applicable law, which we briefly summarize in relevant part here. Section 337(a) of the Tariff Act bans "[t]he importation into the United States, the sale for importation, or the sale within the United States after importation … of articles that infringe a valid and enforceable United States trademark registered under the Trademark Act of 1946." The respondents in this case stipulated with respect to the importation element of Section 337(a), so that what remained to be proven was the validity of Converse's asserted marks. In order for a trademark to be "valid" for purposes of Section 337(a), it must be "non-functional and distinctive" such that it has acquired "secondary meaning," which is the developed association in the public's mind between the mark or trade dress of a product and the specific manufacturer originating it. Secondary meaning is analyzed through the application of seven factors (e.g., exclusivity and length of use, etc.). Infringement is analyzed under a "two prong" test of (1) whether the marks merit protection and, if so (2) whether the use by the alleged infringer of the mark is "likely to cause confusion" (to which a four-part test is applied, e.g., degree of similarity, intent, etc.).
After a review of the substantial evidence and surveys presented by the parties, ALJ Bullock found Converse's registered trademarks to be valid and enforceable—a win for Converse—although he emphasized that it was a "close call" with respect to the secondary meaning element because only 21% of the consumers surveyed associated the marks with Converse. In finding validity, ALJ Bullock rejected claims that Converse's marks were too functional or generic to warrant trademark protection or that Converse was subject to laches because it had waited so long to sue that third-party use of the designs was widespread.
With the validity of Converse's marks so established, ALJ Bullock turned next to the question of whether they had been infringed. In another win for Converse, he found that they had. However, in a win for the respondents, ALJ Bullock found no infringement and knocked out half of their "accused products"—for example, both of Skechers' "BOBS" and "Twinkle Toes" product lines—from the suit because they failed the "likelihood of confusion" test for infringement. Skechers' president Michael Greenberg claimed victory, stating that "[o]ur investment in our distinctive designs and brand identity has helped build Twinkle Toes into the number one shoe line for young girls and both Twinkle Toes and BOBS into household names synonymous with Skechers—not with Converse or any other brand. The Judge's ruling recognizes this."
ALJ Bullock's decision will now be reviewed by the full ITC in the coming months and, if affirmed, either party can appeal the decision to the Federal Circuit. We will be watching the turn of events with great interest and report back.
See here to read the ITC's 11/17/15 Initial Determination ruling in In the Matter of Certain Footwear.