[Federal Register Volume 85, Number 30 (Thursday, February 13, 2020)]
[Notices]
[Pages 8322-8324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02853]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-936 (Remand)]


Certain Footwear Products; Commission Determination To Review in 
Part a Remand Initial Determination and To Extend the Target Date; 
Request for Written Submissions on the Issues Under Review and on 
Remedy, Bonding, and the Public Interest

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 review a remand initial determination 
(``RID'') of the presiding administrative law judge (``ALJ'') in part. 
The Commission requests briefing from the parties on certain issues 
under review, as indicated in this notice. The Commission also requests 
briefing from the parties, government agencies, and interested persons 
on the issues of remedy, the public interest, and bonding. The 
Commission has also determined to extend the target date for the 
completion of the above-captioned investigation to May 28, 2020.

FOR FURTHER INFORMATION CONTACT: Clint Gerdine, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 708-2310. Copies of non-
confidential documents filed in connection with this investigation are 
or will be available for inspection during official business hours 
(8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. 
International Trade Commission, 500 E Street SW, Washington, DC 20436, 
telephone (202) 205-2000. General information concerning the Commission 
may also be obtained by accessing its internet server at https://www.usitc.gov.
    The public record for this investigation may be viewed on the 
Commission's electronic docket (EDIS) at https://edis.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. of North Andover, Massachusetts. 79 FR 68482 (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 No. 4,398,753 
(``the '753 Registration''), registered on September 10, 2013, and the 
common law trademark rights for the same mark (the ``Converse Midsole 
Trademark'' or ``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. at 68482-483. 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). 
These three respondents remain active in the investigation. The 
following five respondents were found in default: Dioniso SRL of 
Perugia, Italy; Shenzhen Foreversun Industrial Co., Ltd. (a/k/a 
Shenzhen Foreversun Shoes Co., Ltd.) of Shenzhen, China; Fujian Xinya 
I&E Trading Co. Ltd. of Jinjiang, China; and Zhejiang Ouhai 
International Trade Co. Ltd. and Wenzhou Cereals Oils & Foodstuffs 
Foreign Trade Co. Ltd., both of Wenzhou, China. Every other respondent 
was terminated from the investigation or settled with Complainant after 
the Commission's final determination. The Office of Unfair Import 
Investigations (``OUII'') is also a party to the investigation. 79 FR 
68483. The investigation was remanded to the Commission by the Federal 
Circuit 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.
    On October 9, 2019, The ALJ issued his RID finding no violation of 
section 337 as to all accused products of each active respondent. 
Specifically, the RID found that Converse had not established secondary 
meaning of the CMT prior to the time of first infringement for any 
active respondent and, therefore, there were 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 a violation as to the 
accused products of the defaulting respondents because they infringe 
the CMT after the registration date of the `753 Registration.
    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.
    Having reviewed the record of the investigation, including the 
parties' briefing, the Commission has determined to review the RID in 
part. Specifically, the Commission has determined to review the RID's 
infringement, validity, and injury analyses with respect to the 
asserted common law and federal registration rights in the CMT. See RID 
at 8-86, 87. The Commission now requests briefing from the parties on 
the following questions:
    (1) For each of the six (6) secondary-meaning factors in Converse, 
909 F.3d at 1120, please identify and discuss the evidence in the 
record you assert is relevant to whether the CMT has acquired secondary 
meaning prior to the first infringing use by each active respondent. 
Pay special attention to evidence that falls within five years before 
the relevant first use dates and to the questions below. Provide a 
summary of your evidence in a table including the specific factor (or 
subpart thereof) to which each piece of evidence is relevant, the date 
of the evidence, and the impact of the evidence on consumer 
perceptions. Any evidence not included in your submission will be 
deemed waived and will not be considered.
    a. Factor 2--For each relevant time frame, identify which third-
party's shoes, having designs substantially similar to the CMT design, 
were in use in the United States. Explain (1) why each shoe's design is 
substantially similar to the CMT; (2) the extent of that third-party 
use; and (3) the impact of that use on the consuming public (through 
the extent or volume of sales, etc.). Explain whether third-party uses 
can be considered if there is no evidence of the impact of that use on 
the consuming public. Include a table summarizing the third-party use 
upon which you rely, why the use is substantially similar, and the 
extent and impact of the third-party use. For the

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same time periods, identify the extent, degree, and impact of 
Converse's use of the CMT design. Please explain how the Commission 
should analyze the amount of Converse's sales in relation to the amount 
of third-party sales and note where this information is in the record.
    b. Factor 5--Identify all evidence of intentional copying of the 
CMT. Indicate if there is evidence supporting any explanation for this 
copying other than to pass off the copied product as the CMT design 
owner's. Is evidence of intentional copying by Skechers relevant to 
this factor at least with respect to Highline and New Balance?
    c. Factor 6--Please explain whether factor (6) is the same as the 
factor previously relied upon by the Commission (i.e., effectiveness of 
the effort to create secondary meaning). Assuming it is not the same, 
please identify what evidence pertains to factor (6), unsolicited media 
coverage of the product embodying the mark.
    (2) Explain how the evidence pertaining to the six factors should 
be weighed in determining whether the CMT has acquired secondary 
meaning. Is it appropriate to accord some factors more weight than 
others in this investigation, and if so why? Is a simple tally of 
factors the proper method of weighing them?
    (3) Explain whether New Balance's PF Flyers shoes that are accused 
of infringement are identical to the PF Flyers shoes in use during 
1995-2007 at least with regard to the midsole, toe cap, and bumper. Are 
the designs of the accused New Balance shoes and the 1995-2007 PF 
Flyers substantially similar to the CMT? If they are not substantially 
similar, do the differences justify the different outcomes between the 
finding of third-party use by PF Flyers and the finding of no 
infringement by New Balance?
    (4) Explain who is the purchaser of shoes bearing the CMT (or any 
relevant shoe, if the answer differs). Is it the general public or a 
sophisticated buyer? What are the circumstances of their sales, prices, 
stores, display conditions, etc.? Cite to evidence in the record.
    (5) For this investigation in which the complainant has alleged 
infringement of its trade dress:
    a. Explain whether the Commission should employ the Dupont factors, 
a modified version of the DuPont factors, or another framework to 
assess infringement. Discuss relevant case law (e.g., Versa Prods. Co. 
v. Bifold Co. (Mfg.), 50 F.3d 189, 202 (3d Cir. 1995) Eng'g Dynamics, 
Inc. v. Structural Software, Inc., 26 F.3d 1335, 1350 (5th Cir. 1994) 
(modified on other grounds, 46 F.3d 408 (5th Cir. 1995)); Egyptian 
Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 670 (Fed. Cir. 2008); 
Converse, 909 F.3d at 1124).
    b. Analyze the evidence in the record that is relevant to whether 
there is a likelihood of confusion under the Dupont factors or the 
framework you identify in part (a) above for each accused shoe. Factors 
that are the same for each shoe can be discussed once and do not need 
to be repeated for each shoe. Include a table summarizing which shoes 
remain accused of infringement.
    c. Explain the effect, if any, that a heel label, or other relevant 
branding, has with respect to infringement. Explain whether and how the 
location of the label or other branding relative to the mark is 
relevant. Explain whether and how the survey evidence related to the 
Skechers' shoe, Daddy'$ Money, should inform the Commission's 
determination about the relevance of heel label branding for other 
accused shoes.
    d. For Respondents: if you rely on a heel label or other relevant 
branding for non-infringement, cite the best available image(s) of the 
evidence.
    (6) For the '753 Registration:
    a. Briefly identify where Converse has asserted its rights arising 
from the '753 Registration against the active respondents. Did 
Converse's complaint or pre- and post-hearing briefs, circa 2015, 
allege that the active respondents infringed Converse's rights arising 
from the federal registration?
    b. If Converse asserted its rights arising from the federal 
registration against the active respondents, has Converse withdrawn 
these allegations? If so, how has Converse withdrawn them?
    c. Is there any practical distinction between finding that 
Converse's CMT lacks secondary meaning and finding the '753 
Registration invalid for lack of secondary meaning?
    (7) For Converse and OUII:
    a. For each defaulting respondent, please identify the date of the 
first infringing use. See, e.g., Converse, 909 F.3d at 1116-17. Cite to 
evidence in the record.
    b. Explain whether the Commission should address validity of the 
'753 Registration when no defaulting respondent has raised validity as 
a defense.
    The Commission has determined not to review the remainder of the 
RID, including the RID's analysis of the equitable defenses. See RID at 
86-87.
    In connection with the final disposition of this investigation, the 
statute authorizes issuance of (1) an order that could result in the 
exclusion of the subject articles from entry into the United States, 
and/or (2) one or more cease and desist orders that could result in the 
respondents being required to cease and desist from engaging in unfair 
acts in the importation and sale of such articles. Accordingly, the 
Commission is interested in receiving written submissions that address 
the form of remedy, if any, that should be ordered. If a party seeks 
exclusion of an article from entry into the United States for purposes 
other than entry for consumption, the party should so indicate and 
provide information establishing that activities involving other types 
of entry either are adversely affecting it or likely to do so. For 
background, see Certain Devices for Connecting Computers via Telephone 
Lines, Inv. No. 337-TA-360, USITC Pub. No. 2843, Comm'n Op. at 7-10 
(December 1994). In addition, if a party seeks issuance of any cease 
and desist orders, the written submissions should address that request 
in the context of recent Commission opinions, including those in 
Certain Arrowheads with Deploying Blades and Components Thereof and 
Packaging Therefor, Inv. No. 337-TA-977, Comm'n Op. (Apr. 28, 2017) and 
Certain Electric Skin Care Devices, Brushes and Chargers Therefor, and 
Kits Containing the Same, Inv. No. 337-TA-959, Comm'n Op. (Feb. 13, 
2017). Specifically, if Complainant seeks a cease and desist order 
against a respondent, the written submissions should respond to the 
following requests:
    1. Please identify with citations to the record any information 
regarding commercially significant inventory in the United States as to 
each respondent against whom a cease and desist order is sought. If 
Complainant also relies on other significant domestic operations that 
could undercut the remedy provided by an exclusion order, please 
identify with citations to the record such information as to each 
respondent against whom a cease and desist order is sought.
    2. ln relation to the infringing products, please identify any 
information in the record, including allegations in the pleadings, that 
addresses the existence of any domestic inventory, any domestic 
operations, or any sales-related activity directed at the United States 
for each respondent against whom a cease and desist order is sought.
    3. Please discuss any other basis upon which the Commission could 
enter a cease and desist order.
    The statute requires the Commission to consider the effects of any 
remedy upon the public interest. The public interest factors the 
Commission will

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consider include the effect that an exclusion order and/or cease and 
desist orders would have on (1) the public health and welfare, (2) 
competitive conditions in the U.S. economy, (3) U.S. production of 
articles that are like or directly competitive with those that are 
subject to investigation, and (4) U.S. consumers. The Commission is 
therefore interested in receiving written submissions that address the 
aforementioned public interest factors in the context of this 
investigation.
    If the Commission orders some form of remedy, the U.S. Trade 
Representative, as delegated by the President, has 60 days to approve, 
disapprove, or take no action on the Commission's determination. See 
Presidential Memorandum of July 21, 2005. 70 FR 43251 (July 26, 2005). 
During this period, the subject articles would be entitled to enter the 
United States under bond, in an amount determined by the Commission and 
prescribed by the Secretary of the Treasury. The Commission is 
therefore interested in receiving submissions concerning the amount of 
the bond that should be imposed if a remedy is ordered.
    Written Submissions: The parties to the investigation are requested 
to file written submissions on the issues identified in this notice. 
Parties to the investigation, interested government agencies, and any 
other interested parties are encouraged to file written submissions on 
the issues of remedy, the public interest, and bonding. Such initial 
written submissions should include views on the recommended 
determination by the ALJ on remedy and bonding. Complainant and OUII 
are also requested to identify the form of the remedy sought and to 
submit proposed remedial orders for the Commission's consideration in 
their initial written submissions. Complainant is also requested to 
state the HTSUS numbers under which the accused products are imported. 
Complainant is further requested to supply the names of known importers 
of infringing products at issue in this investigation.
    The initial written submissions and proposed remedial orders must 
be filed no later than close of business on Friday, February 28, 2020. 
Reply submissions must be filed no later than the close of business on 
Monday, March 9, 2020. Initial submissions are limited to 100 pages. 
Reply submissions are limited to 75 pages. These page limits do not 
apply to submissions on the issues of remedy, the public interest, and 
bonding. No further submissions on any of these issues will be 
permitted unless otherwise ordered by the Commission.
    In view of the briefing requested, the Commission has also 
determined to extend the target date of this investigation to May 28, 
2020.
    Persons filing written submissions must file the original document 
electronically on or before the deadlines stated above and submit eight 
true paper copies to the Office of the Secretary by noon the next day 
pursuant to section 210.4(f) Of the Commission's Rules of Practice and 
Procedure (19 CFR 2.10.4(f)). Submissions should refer to the 
investigation number (``Inv. No. 337-TA-936'') in a prominent place on 
the cover page and/or the first page. (See Handbook for Electronic 
Filing Procedures, https://www.usitc.gov/secretary/documents/handbook_on_electronic_filing.pdf). Persons with questions regarding 
filing should contact the Secretary (202-205-2000).
    Any person desiring to submit a document to the Commission in 
confidence must request confidential treatment. All such requests 
should be directed to the Secretary to the Commission and must include 
a full statement of the reasons why the Commission should grant such 
treatment. See 19 CFR 201.6. Documents for which confidential treatment 
by the Commission is properly sought will be treated accordingly. A 
redacted-non-confidential version of the document must also be filed 
simultaneously with any confidential filing. All information, including 
confidential business information and documents for which confidential 
treatment is properly sought, submitted to the Commission for purposes 
of this Investigation may be disclosed to and used: (i) By the 
Commission, its employees and Offices, and contract personnel (a) for 
developing or maintaining the records of this or a related proceeding, 
or (b) in internal investigations, audits, reviews, and evaluations 
relating to the programs, personnel, and operations of the Commission 
including under 5 U.S.C. Appendix 3; or (ii) by U.S. government 
employees and contract personnel, solely for cybersecurity purposes 
(all contract personnel will sign appropriate nondisclosure 
agreements). All nonconfidential written submissions will be available 
for public inspection at the Office of the Secretary and on EDIS.
    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: February 7, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020-02853 Filed 2-12-20; 8:45 am]
 BILLING CODE 7020-02-P