On June 23, 2016, the International Trade Commission (the “Commission”) issued a notice determining that a Section 337 violation has occurred in Certain Footwear Products (Inv. No. 337-TA-936). The Commission also issued a general exclusion order prohibiting the unlicensed entry of footwear products that infringe U.S. Trademark Registration Nos. 3,258,103 (the ‘103 trademark) and 1,588,960 (the ‘960 trademark).

By way of background, this investigation is based on an October 14, 2014 complaint filed by Converse Inc. (“Converse”) alleging violation of Section 337 in the importation into the U.S. and sale of certain footwear products that infringe U.S. Trademark Registration No. 4,398,753 (the ‘753 trademark), the ‘103 trademark, and the ‘960 trademark. Additionally, Converse alleged violation of Section 337 based upon unfair competition/false designation of origin, common law trademark infringement and unfair competition, and trademark dilution. See our October 15, 2014 and November 14, 2014 posts for more details on the complaint and Notice of Investigation, respectively. Most of the named respondents were subsequently either found in default or terminated from the investigation based on good cause or settlement and/or consent order stipulation. However, Wal-Mart Stores, Inc., Skechers U.S.A., Inc., Highline United LLC d/b/a Ash Footwear USA, and New Balance Athletic Shoe, Inc. remained in the investigation.

On November 17, 2015, Chief ALJ Charles E. Bullock issued his initial determination (“ID”) finding a violation of Section 337 as to certain accused products of each active respondent and as to all accused products of each defaulting respondent. Specifically, the ALJ found that the ‘753 trademark is not invalid and that certain accused products of each active respondent, and all accused products of each defaulting respondent, infringe the ‘753 trademark. The ALJ also found that: (1) Converse satisfied both the economic and technical prongs of the domestic industry requirement with respect to all asserted trademarks; (2) certain accused products of defaulting respondent Foreversun infringe both the ‘103 and ‘960 trademarks; and (3) Foreversun violated Section 337 with respect to the ‘103 and ‘960 trademarks. The ALJ also found no dilution of the ‘753 trademark. On February 3, 2016, the Commission issued a notice determining to review: (1) the ID’s finding of no invalidity of the ‘753 trademark; (2) the ID’s findings regarding infringement of the ‘753 trademark; (3) the ID’s finding of invalidity of the common law rights asserted in the design depicted in the ‘753 trademark; and (4) the ID’s finding of no violation of Section 337 with respect to the common law rights asserted in the designs depicted in the ‘103 and ‘960 trademarks.

According to the June 23, 2016 notice, the Commission determined to affirm-in-part, reverse-in-part, and vacate certain portions of the ID. Specifically, the Commission reversed the ALJ’s finding that the ‘753 trademark is not invalid, and instead found the trademark invalid based on lack of secondary meaning. The Commission also affirmed the ALJ’s finding that there is a likelihood of confusion with respect to the ‘753 trademark for specific accused footwear products to the extent that the trademark is not invalid. The Commission also affirmed the ALJ’s finding that there is no likelihood of confusion with respect to the ‘753 trademark for specific accused footwear products regardless of invalidity. Further, the Commission affirmed the ALJ’s finding that the asserted common law rights in the ‘753 trademark are invalid. Accordingly, the Commission determined that there is no violation of Section 337 with respect to the ‘753 trademark. With respect to the ‘103 and ‘960 trademarks, the Commission vacated the ALJ’s finding that the asserted common law rights in the designs depicted in those trademarks are invalid. The Commission determined that this finding with respect to these common law rights is moot in view of the Commission’s finding of a violation with respect to the federally-registered rights in the ‘103 and ‘960 trademarks, since the scope of the common law and federally-registered rights in these trademarks is co-extensive.

Having found a violation of Section 337 with respect to the ‘103 and ‘960 trademarks, the Commission determined to issue a general exclusion order prohibiting the unlicensed entry of footwear products that infringe these trademarks. The Commission determined that the public interest factors do not preclude issuance of the general exclusion order. Lastly, the Commission determined that a bond of 100 percent of the entered value (per pair) of the covered products is required to permit temporary importation during the Presidential review period.