[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 
[email protected]. 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