[Federal Register Volume 88, Number 69 (Tuesday, April 11, 2023)]
[Notices]
[Pages 21712-21715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07530]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1270]


Certain Casual Footwear and Packaging Thereof; Notice of a 
Commission Determination To Review in Part a Final Initial 
Determination Finding No Violation; Request for Written Submissions on 
the Issues Under Review, 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 (``Commission'') has determined to review in part a final 
initial determination (``ID'') issued by the presiding administrative 
law judge (``ALJ'') finding no violation of section 337 and to solicit 
briefing from the parties on the issues under review, as well as 
briefing from the parties, interested government agencies, and any 
other interested parties on the issues of remedy, bonding, and the 
public interest.

FOR FURTHER INFORMATION CONTACT: Carl P. Bretscher, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 205-2382. 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 July 9, 2021, based on a complaint filed by Crocs, Inc. of 
Broomfield, Colorado (``Crocs''). 86 FR 36303-304 (July 9, 2021). The 
complaint, as supplemented, alleges violations of section 337 of the 
Tariff Act of 1930, as amended, 19 U.S.C. 1337 (``section 337''), in 
the importation into the United States, sale for importation, or sale 
in the United States after importation of certain casual footwear and 
packaging thereof by reason of infringement, false designation of 
origin, and dilution of one of more of U.S. Trademark Registration Nos. 
5,149,328; 5,273,875 (collectively, the ``3D Marks''); and 3,836,415 
(``the Word Mark'') (all collectively, ``the Asserted Marks''). Id. The 
complaint alleges that a domestic industry exists, and that the threat 
or effect of certain alleged violations is to destroy or substantially 
injure an industry in the United States. Id.
    The Commission's notice of investigation named numerous 
respondents, including: Hobby Lobby Stores, Inc. of Oklahoma City, 
Oklahoma (``Hobby Lobby''); Quanzhou ZhengDe Network Corp. d/b/a Amoji 
of

[[Page 21713]]

Quanzhou, Fujian Province, China (``Amoji''); Skechers USA, Inc. of 
Manhattan Beach, California (``Skechers''); SG Footwear Meser Grp. Inc. 
a/k/a S. Goldberg & Co. of Hackensack, New Jersey (``SG Footwear''); 
Cape Robbin Inc. of Pomona, California (``Cape Robbin''); Dr. Leonard's 
Healthcare Corp. d/b/a Carol Wright of Edison, New Jersey (``Dr. 
Leonard's''); Fullbeauty Brands Inc. d/b/a Kingsize of New York, New 
York (``Fullbeauty''); Legend Footwear, Inc. d/b/a/Wild Diva of City of 
Industry, California (``Wild Diva''); Fujian Huayuan Well Import and 
Export Trade Co., Ltd. of Fuzhou, Fujian Province, China (``Fujian''); 
Yoki Fashion International LLC of New York, New York (``Yoki''); 
Bijora, Inc. d/b/a Akira of Chicago, Illinois (``Akira''); Hawkins 
Footwear, Sports, Military & Dixie Store of Brunswick, Georgia 
(``Hawkins''); Shoe-Nami Inc. of Gretna, Louisiana (``Shoe-Nami''); PW 
Shoes, Inc. a/k/a P&W of Maspeth, New York (``PW''); 718Closeouts of 
Brooklyn, New York (``718Closeouts''); Crocsky of Austin, Texas 
(``Crocsky''); Hobibear Shoes and Clothing Ltd. of Brighton, Colorado 
(``Hobibear''); Ink Tee of Los Angeles, California (``Ink Tee''); 
Maxhouse Rise Ltd. of Hong Kong, China (``Maxhouse''); La Modish 
Boutique of West Covina, California (``La Modish''); Loeffler Randall 
Inc. of New York, New York (``Loeffler Randall''); Star Bay Group Inc. 
of Hackensack, New Jersey (``Star Bay''); and Royal Deluxe Accessories, 
LLC of New Providence, New Jersey (``Royal Deluxe''). The Office of 
Unfair Import Investigations (``OUII'') is also participating as a 
party.
    On November 17, 2021, the Commission amended the complaint and 
notice of investigation to add certain new respondents, including Orly 
Shoe Corp. of New York, New York (``Orly''); Mould Industria de 
Matrizes Ltda. d/b/a/Boaonda of Brazil (``Boaonda''); Dongguan Eastar 
Footwear Enterprises Co., Ltd. of Guangzhou City, China (``Eastar''); 
KGS Sourcing Ltd. of Hong Kong, China (``KGS''); Fujian Wanjiaxin 
Industrial Developing, Inc. a/k/a Fujian Wanjiaxin Light Industrial 
Developing, Inc. of Quanzhou City, China (``Wanjiaxin''); Jinjiang Anao 
Footwear Co., Ltd. (``Anao''); Walmart Inc. of Bentonville, Arkansas 
(``Walmart''); and Huizhou Xinshunzu Shoes Co., Ltd. of Huizhou City, 
China (``Huizhou''), and to terminate the investigation with respect to 
Crocsky, Hobibear, and Ink Tee. Order No. 30 (Oct. 21, 2021), 
unreviewed by Comm'n Notice (Nov. 17, 2021).
    The Commission subsequently terminated the investigation with 
respect to various respondents on the basis of settlement agreements or 
consent orders. See Order No. 12 (Aug. 11, 2021) (terminating 
Skechers), unreviewed by Comm'n Notice (Aug. 24, 2021); Order No. 16 
(Aug. 26, 2021) (SG Footwear) and Order No. 17 (Aug. 26, 2021) (Cape 
Robbin), unreviewed by Comm'n Notice (Sept. 24, 2021); Order No. 20 
(Sept. 1, 2021) (Dr. Leonard's), unreviewed by Comm'n Notice (Sept. 29, 
2021); Order No. 22 (Sept. 9, 2021) (Fullbeauty) and Order No. 23 
(Sept. 9, 2021) (Wild Diva), unreviewed by Comm'n Notice (Oct. 7, 
2021); Order No. 24 (Sept. 17, 2021) (Fujian), unreviewed by Comm'n 
Notice (Oct. 7, 2021); Order No. 25 (Sept. 22, 2021) (Yoki), unreviewed 
by Comm'n Notice (Oct. 7, 2021); Order No. 26 (Sept. 28, 2021) (Akira), 
unreviewed by Comm'n Notice (Oct. 27, 2021); Order No. 27 (Oct. 6, 
2021) (Hawkins), unreviewed by Comm'n Notice (Oct. 29, 2021); Order No. 
32 (Nov. 1, 2021) (Shoe-Nami) and Order No. 33 (Nov. 1, 2021) (PW), 
unreviewed by Comm'n Notice (Nov. 29, 2021); Order No. 34 (Nov. 10, 
2021) (718 Closeouts), unreviewed by Comm'n Notice (Dec. 6, 2021); 
Order No. 39 (Jan. 11, 2022) (Eastar), unreviewed by Comm'n Notice 
(Feb. 4, 2022); Order No. 46 (March 3, 2022) (Maxhouse, Wanjiaxin), 
unreviewed by Comm'n Notice (March 18, 2022); Order No. 49 (March 15, 
2022) (Boaonda), unreviewed by Comm'n Notice (April 1, 2022); Order No. 
54 (April 22, 2022) (Royal Deluxe), unreviewed by Comm'n Notice (May 
17, 2022); Order No. 56 (May 6, 2022) (Loeffler Randall), unreviewed by 
Comm'n Notice (May 27, 2022); Order No. 81 (Sept. 28, 2022) (Walmart), 
unreviewed by Comm'n Notice (Oct. 20, 2022). The Commission also 
terminated the investigation with respect to KGS for good cause. Order 
No. 40 (Feb. 1, 2022), unreviewed by Comm'n Notice (Feb. 22, 2022).
    On June 10, 2022, the Commission found respondents La Modish, Star 
Bay, Huizhou, and Anao (``Defaulting Respondents'') were in default and 
waived their rights to appear, to be served with documents, and to 
contest the allegations in this investigation, pursuant to 19 CFR 
210.16(b), 210.17(h). Order No. 58 (May 20, 2022), unreviewed by Comm'n 
notice (June 10, 2022).
    On September 13-16, 2022, the ALJ held an evidentiary hearing. On 
September 30, 2022, Crocs, OUII, and the participating respondents 
(Orly, Hobby Lobby, and Amoji) filed their respective initial post-
hearing briefs. On October 7, 2022, the parties filed their post-
hearing reply briefs.
    On January 9, 2023, the ALJ issued the subject ID finding no 
violation of section 337 because: (1) Crocs failed to prove that any of 
Respondents infringes the 3D Marks; (2) Crocs failed to prove that Orly 
or Hobby Lobby infringes the Word Mark; (3) Crocs did not prove that 
any of Respondents has falsely designated the origin (source) of their 
accused products or caused unfair competition; (4) Crocs did not prove 
that any of the Respondents diluted any of the Asserted Marks, either 
by blurring or tarnishment; (5) the 3D Marks are invalid for lack of 
secondary meaning; and (6) Crocs waived its infringement contentions 
against Defaulting Respondents. ID at 71-72, 83-86, 148-49. The ID also 
finds that Crocs has satisfied both the technical and economic prongs 
of the domestic industry (``DI'') requirement, and it takes no position 
on injury. Id. at 130, 149. The ID further finds that Respondents 
failed to prove the 3D Marks are invalid as functional or the Word Mark 
is invalid as generic, and it takes no position on Respondents' ``fair 
use'' defense. Id. at 128-29, 149.
    On January 23, 2023, Crocs filed a petition for review of the ID's 
findings. On the same date, Respondents Orly and Hobby Lobby (``the 
Orly Respondents'') filed a contingent petition for review of certain 
findings should the Commission determine to review the ID. Amoji did 
not join in the Orly Respondents' contingent petition for review or 
file a petition of its own.
    On January 31, 2023, Respondents Orly, Hobby Lobby, and Amoji filed 
a joint response to Crocs' petition for review, and Crocs filed its 
response to the Orly Respondents' contingent petition for review. On 
the same date, OUII filed a response to both of the petitions for 
review.
    Having reviewed the record in this investigation, including the 
final ID, the parties' petitions, and responses thereto, the Commission 
has determined to review the ID in part with respect to the ID's 
findings regarding: (1) Crocs's infringement contentions against the 
lined versions of Orly's Gators were untimely and waived; (2) the 3D 
Marks lack secondary meaning, including application of the presumption 
of validity; (3) Crocs waived its infringement contentions with respect 
to the Defaulting Respondents; (4) subject matter jurisdiction; (5) 
likelihood of confusion; (6) false designation of origin; (7) dilution; 
and (8) the technical and economic prongs of domestic industry. The 
Commission has determined not to review the remaining findings in the 
ID.

[[Page 21714]]

    The parties are asked to provide additional briefing on the 
following issues under review:
    (A) Explain whether the evidence of record demonstrates that the 
shoes that were allegedly the subject of Orly's first sale practiced 
the 3D Marks in question, and whether they were the same as the Orly 
``Gator'' shoes presently at issue. Explain whether Orly's sales 
activities satisfies the requirements of a ``first sale'' in this 
context and its implications for the presumption of validity of the 
Asserted Marks and the burden of proof. Explain whether the evidence is 
sufficient to overcome the presumption of validity, if applicable.
    (B) Explain whether the infringement contention presented in Crocs' 
pre-hearing and post-hearing briefs provided sufficient notice and 
information that Crocs was accusing the lined version of the accused 
Orly Gator products of infringement. Identify any significant, relevant 
similarities or differences between the lined and unlined versions of 
the Orly Gator products for purposes of infringement.
    The parties are requested to brief only the discrete issues 
identified above, with reference to the applicable law and evidentiary 
record. The parties are not to brief any other issues on review, which 
have already been adequately presented in the parties' previous 
filings.
    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) 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).
    The statute requires the Commission to consider the effects of any 
remedy upon the public interest. The public interest factors the 
Commission will consider include the effect that an exclusion order 
and/or cease-and-desist order 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 action. 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: Parties to this investigation are requested to 
file written submissions on the issues identified above in this notice. 
In addition, the parties, interested government agencies, and any other 
interested parties are requested to file written submissions on the 
issues of remedy, the public interest, and bonding. Such initial 
submissions should include views on the recommended determination by 
the ALJ on remedy and bonding.
    In its initial submission, Complainant is requested to identify the 
remedy sought, and both Complainant and OUII are requested to submit 
proposed remedial orders for the Commission's consideration. 
Complainant is also requested to provide the HTSUS subheadings under 
which the accused products are imported. Complainant is further 
requested to supply the names of known importers of the Respondents' 
products at issue in this investigation. Complainant is also requested 
to identify and explain, from the record, articles that it contends are 
``packaging of'' the subject products, and thus potentially covered by 
the proposed remedial orders, if imported separately from the subject 
products. See 86 FR 36303-304. Failure to provide this information may 
result in waiver of any remedy directed to ``packaging of'' the subject 
products, in the event any violation may be found.
    The parties' written submissions and proposed remedial orders must 
be filed no later than the close of business on April 19, 2023. Reply 
submissions must be filed no later than the close of business on April 
26, 2023. Opening submissions are limited to 50 pages. Reply 
submissions are limited to 30 pages. No further submissions on any of 
these issues will be permitted unless otherwise ordered by the 
Commission.
    Persons filing written submissions must file the original document 
electronically on or before the deadlines stated above. The 
Commission's paper filing requirements in 19 CFR 210.4(f) are currently 
waived. 85 FR 15798 (Mar. 19, 2020). Submissions should refer to the 
investigation number (``Inv. No. 337-TA-1270'') in a prominent place on 
the cover page and/or first page. (See Handbook for Electronic Filing 
Procedures, https://www.usitc.gov/documents/handbook_on_filing_procedures.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 by marking each document 
with a header indicating that the document contains confidential 
information. This marking will be deemed to satisfy the request 
procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b) 
& 210.5(e)(2)). Documents for which confidential treatment by the 
Commission is properly sought will be treated accordingly. 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 non-confidential written submissions will be available 
for public inspection at the Office of the Secretary and on EDIS.
    The Commission vote for this determination took place on April 5, 
2023.
    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

[[Page 21715]]

Practice and Procedure (19 CFR part 210).

    By order of the Commission.

    Issued: April 5, 2023.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2023-07530 Filed 4-10-23; 8:45 am]
BILLING CODE 7020-02-P