[Federal Register Volume 85, Number 179 (Tuesday, September 15, 2020)]
[Notices]
[Pages 57248-57249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20278]
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INTERNATIONAL TRADE COMMISSION
[Investigation No. 337-TA-936 (Remand)]
Certain Footwear Products; Commission Determination To Affirm in
Part and Reverse in Part a Remand Initial Determination; Issuance of a
General Exclusion Order and Cease and Desist Orders; Termination of the
Investigation
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
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SUMMARY: Notice is hereby given that the U.S. International Trade
Commission has determined to affirm in part and reverse in part a
remand initial determination (``RID'') of the presiding administrative
law judge (``ALJ'') in the above-captioned investigation. The
Commission has issued a general exclusion order (``GEO'') directed to
footwear products that infringe U.S. Trademark Registration No.
4,398,753 (``the '753 trademark''), and cease and desist orders
(``CDOs'') directed to two respondents found in default. The
investigation is terminated in its entirety.
FOR FURTHER INFORMATION CONTACT: Cathy Chen, Office of the General
Counsel, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, telephone 202-205-2392. Copies of non-
confidential documents filed in connection with this investigation may
be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email
EDIS3Help@usitc.gov. General information concerning the Commission may
also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on
this matter can be obtained by contacting the Commission's TDD terminal
on (202) 205-1810.
SUPPLEMENTARY INFORMATION: The Commission instituted this investigation
on November 17, 2014, based on a complaint filed on behalf of Converse
Inc. (``Converse'' or ``Complainant'') of North Andover, Massachusetts.
79 FR 68482-83 (Nov. 17, 2014). The complaint alleges, inter alia,
violations of section 337 of the Tariff Act of 1930, as amended, 19
U.S.C. 1337, based upon the importation into the United States, the
sale for importation, and the sale within the United States after
importation of certain footwear products by reason of infringement of
U.S. Trademark Registration Nos. 3,258,103 (``the '103 trademark'') and
1,588,960 (``the '960 trademark''), and the '753 trademark, registered
on September 10, 2013, and the common law trademark rights for the same
mark (the ``CMT''). See id. The Commission's notice of investigation
names numerous respondents including Skechers U.S.A., Inc.
(``Skechers'') of Manhattan Beach, California, and Highline United LLC
d/b/a Ash Footwear USA (``Highline''), now of Hyde Park, Massachusetts.
Id. New Balance Athletic Shoe, Inc. (``New Balance'') of Boston,
Massachusetts, was subsequently added to the investigation as a
respondent-intervenor. 80 FR 9748 (Feb. 24, 2015). Only Skechers,
Highline, and New Balance remain active in the investigation
(collectively, the ``Active Respondents''). The following five
respondents were found in default: Dioniso SRL (``Dioniso'') of
Perugia, Italy; Shenzhen Foreversun Industrial Co., Ltd. (a/k/a
Shenzhen Foreversun Shoes Co., Ltd.) (``Foreversun'') of Shenzhen,
China; Fujian Xinya I&E Trading Co. Ltd. of Jinjiang, China; Zhejiang
Ouhai International Trade Co. Ltd. (``Ouhai'') of Wenzhou, China; and
Wenzhou Cereals Oils & Foodstuffs Foreign Trade Co. Ltd. of Wenzhou,
China (collectively, the ``Defaulting Respondents''). Every other
respondent was terminated from the investigation or settled with
Converse. The Office of Unfair Import Investigations (``OUII'') is also
a party to the investigation. 79 FR at 68483.
On June 23, 2016, the Commission found a violation of section 337
with respect to the '103 trademark and the '960 trademark and issued a
GEO directed against infringing footwear products. 81 FR 42377-79 (June
29, 2016). The Commission found no violation of section 337 with
respect to the '753 trademark because it determined the '753 trademark
and the common law trademark rights in the CMT were invalid based on a
lack of secondary meaning. Id. at 42379.
Thereafter, Converse appealed the Commission's finding of no
violation of section 337 with respect to the '753 trademark and its
alleged common law trademark rights in the CMT. The Federal Circuit
vacated the Commission's finding and remanded the investigation to the
Commission in Converse, Inc. v. International Trade Commission, 909
F.3d 1110 (Fed. Cir. 2018). On April 9, 2019, the Commission, in turn,
remanded the matter to the ALJ who adjudicated the original
investigation to make findings and issue an RID with respect to the CMT
in accordance with the Federal Circuit decision.
On July 31, 2019, Converse, the Active Respondents, and OUII each
filed an initial brief regarding the issues on remand. On August 9,
2019, Converse and the Active Respondents each filed a reply brief.
On October 9, 2019, the ALJ issued his RID finding no violation of
section 337 by the Active Respondents. Specifically, the RID found that
Converse had not established secondary meaning of the CMT prior to each
Active Respondents' alleged first use and, therefore, Converse
possessed no valid common law trademark rights in the CMT. The RID also
found that the Active Respondents' accused products do not infringe
even if the CMT were found to have acquired secondary meaning, except
for one Skechers product found to infringe. The RID further found the
Defaulting Respondents' accused products infringe the '753 trademark.
On October 22, 2019, Converse, the Active Respondents, and OUII
each filed a petition for review of the RID. On October 30, 2019, each
of these parties filed responses to the other petitions for review.
On February 7, 2020, the Commission determined to review the RID in
part. 85 FR 8322 (Feb. 13, 2020). Specifically, the Commission
determined to review the RID's infringement, validity, and injury
analyses with respect to the common law trademark rights in the CMT and
the RID's validity and infringement analyses with respect to the '753
trademark. Id. The Commission also requested additional briefing from
the parties on the issues under review and on the issues of remedy, the
public interest, and bonding. Id. at 8322-23. Converse, the Active
Respondents, and OUII filed timely initial and reply written
submissions.
Having reviewed the record in this investigation, including the RID
and the parties' written submissions, the Commission has determined to
affirm in part and reverse in part the RID's findings under review.
Specifically, the Commission reverses the RID's finding that the CMT
had not acquired
[[Page 57249]]
secondary meaning prior to each Active Respondents' alleged first use
of the mark. The Commission has determined that there has been no
violation by the Active Respondents because, although Converse has
established that its CMT had acquired secondary meaning prior to each
of those Respondents' alleged first uses of the mark (which predate
registration of the '753 trademark), Converse has failed to show either
a likelihood of confusion or injury to its domestic industry, or both,
with respect to those Respondents' accused products. The Commission has
also determined that it may assess the validity of the '753 trademark
and affirms with modifications the RID's finding that the '753
trademark has not been proven invalid. The Commission further
determines that Converse has proven a violation of section 337 by
substantial, reliable, and probative evidence with respect to
Defaulting Respondents Foreversun and Dioniso (whose infringements
postdate registration of the '753 trademark), but not with respect to
Defaulting Respondents Xinya, Wenzhou, and Ouhai. Accordingly, the
Commission has determined that there is a violation of section 337 with
respect to the '753 trademark.
Having found a violation of section 337 as to the '753 trademark,
the Commission has determined that the appropriate form of relief is:
(1) A GEO prohibiting the unlicensed entry of footwear products that
infringe the '753 trademark; and (2) CDOs prohibiting Defaulting
Respondents Dioniso and Foreversun from further importing, selling, and
distributing infringing products in the United States. The Commission
further determined that the public interest factors enumerated in
section 337(d)(1) and (f)(1) do not preclude issuance of the remedial
orders. Finally, the Commission determined that a bond in the amount of
100 percent of the entered value (per pair) of the infringing products
is required to permit temporary importation during the period of
Presidential review (19 U.S.C. 1337(j)). The Commission has also issued
an opinion explaining the basis for the Commission's action. The
Commission's orders and opinion were delivered to the President and to
the United States Trade Representative on the day of their issuance.
The investigation is hereby terminated.
While temporary remote operating procedures are in place in
response to COVID-19, the Office of the Secretary is not able to serve
parties that have not retained counsel or otherwise provided a point of
contact for electronic service. Accordingly, pursuant to Commission
Rules 201.16(a) and 210.7(a)(1) (19 CFR 201.16(a), 210.7(a)(1)), the
Commission orders that the Complainant complete service for any party
without a method of electronic service noted on the attached
Certificate of Service and shall file proof of service on the
Electronic Document Information System (EDIS).
The Commission vote for this determination took place on September
9, 2020.
The authority for the Commission's determination is contained in
section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, and
in Part 210 of the Commission's Rules of Practice and Procedure, 19 CFR
part 210.
By order of the Commission.
Issued: September 9, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020-20278 Filed 9-14-20; 8:45 am]
BILLING CODE 7020-02-P