81 FR 42377 - Certain Footwear Products; Commission Decision To Affirm-in-Part, Reverse-in-Part, and Vacate Certain Portions of a Final Initial Determination Finding a Violation of Section 337; Issuance of General Exclusion Order; Termination of the Investigation

INTERNATIONAL TRADE COMMISSION

Federal Register Volume 81, Issue 125 (June 29, 2016)

Notice is hereby given that the U.S. International Trade Commission has determined to affirm-in-part, reverse-in-part, and vacate certain portions of a final initial determination (``ID'') of the presiding administrative law judge (``ALJ'') finding a violation of section 337 in the above-captioned investigation, and has issued a general exclusion order directed against infringing footwear products. The Commission has terminated the investigation.

[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Notices]
[Pages 42377-42379]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15339]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-936]


Certain Footwear Products; Commission Decision To Affirm-in-Part, 
Reverse-in-Part, and Vacate Certain Portions of a Final Initial 
Determination Finding a Violation of Section 337; Issuance of General 
Exclusion Order; 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, reverse-in-part, and 
vacate certain portions of a final initial determination (``ID'') of 
the presiding administrative law judge (``ALJ'') finding a violation of 
section 337 in the above-captioned investigation, and has issued a 
general exclusion order directed against infringing footwear products. 
The Commission has terminated the investigation.

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 http://www.usitc.gov. The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at http://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 68482-83. The complaint 
alleges violations of section 337 of the Tariff Act of 1930, as 
amended, 19 U.S.C. 1337, by reason of infringement of certain U.S. 
Trademark Registration Nos.: 4,398,753 (``the '753 trademark''); 
3,258,103 (``the '103 trademark''); and 1,588,960 (``the '960 
trademark''). The

[[Page 42378]]

complaint further alleges violations of section 337 based upon unfair 
competition/false designation of origin, common law trademark 
infringement and unfair competition, and trademark dilution, the threat 
or effect of which is to destroy or substantially injure an industry in 
the United States. The Commission's notice of investigation named 
numerous respondents including Wal-Mart Stores, Inc. of Bentonville, 
Arkansas; Skechers U.S.A., Inc. of Manhattan Beach, California; and 
Highline United LLC d/b/a Ash Footwear USA of New York City, New York. 
The Office of Unfair Import Investigations (``OUII'') is also a party 
to the investigation. Id. New Balance Athletic Shoe, Inc. (``New 
Balance'') of Boston, Massachusetts was subsequently added as a 
respondent-intervenor. See Order No. 36 (unreviewed, Comm'n Notice Feb. 
19, 2015). Only these four respondents remain active in the 
investigation. All other respondents, as detailed below, have been 
found in default or have been terminated from the investigation based 
on good cause or settlement and/or consent order stipulation.
    On February 10, 2015, the Commission determined not to review an ID 
(Order No. 32) granting a joint motion of complainant and Skeanie 
Shoes, Inc. (``Skeanie'') of New South Wales, Australia terminating the 
investigation as to Skeanie Shoes based on settlement and consent order 
stipulation. On the same date, the Commission determined not to review 
an ID (Order No. 33) granting a joint motion of complainant and PW 
Shoes, Inc. (``PW Shoes'') of Maspeth, New York terminating the 
investigation as to PW Shoes based on settlement and consent order 
stipulation. Also on the same date, the Commission determined not to 
review an ID (Order No. 34) granting a joint motion of complainant and 
Ositos Shoes, Inc. (``Ositos Shoes'') of South El Monte, California 
terminating the investigation as to Ositos Shoes based on settlement 
agreement and consent order stipulation. On March 4, 2015, the 
Commission determined not to review an ID (Order No. 52) granting a 
joint motion of complainant and Ralph Lauren Corporation (``Ralph 
Lauren'') of New York City, New York terminating the investigation as 
to Ralph Lauren based on settlement agreement and consent order 
stipulation. On March 12, 2015, the Commission determined not to review 
an ID (Order No. 55) granting a joint motion of complainant and OPPO 
Original Corp. (``OPPO'') of City of Industry, California terminating 
the investigation as to OPPO based on settlement agreement and consent 
order stipulation. On the same date, the Commission determined not to 
review an ID (Order No. 57) granting a joint motion of complainant and 
H & M Hennes & Mauritz LP (``H & M'') of New York City, New York 
terminating the investigation as to H & M based on settlement agreement 
and consent order stipulation. On March 24, 2015, the Commission 
determined not to review an ID (Order No. 59) granting a joint motion 
of complainant and Zulily, Inc. (``Zulily'') of Seattle, Washington 
terminating the investigation as to Zulily based on settlement 
agreement and consent order stipulation. On March 30, 2015, the 
Commission determined not to review an ID (Order No. 65) granting a 
joint motion of complainant and Nowhere Co. Ltd. d/b/a Bape 
(``Nowhere'') of Tokyo, Japan terminating the investigation as to 
Nowhere based on settlement agreement and consent order stipulation. On 
the same date, the Commission determined not to review an ID (Order No. 
67) granting a joint motion of complainant and The Aldo Group 
(``Aldo'') of Montreal, Canada terminating the investigation as to Aldo 
based on settlement agreement and consent order stipulation.
    On April 1, 2015, the Commission determined not to review an ID 
(Order No. 69) granting a joint motion of complainant and Gina Group, 
LLC (``Gina Group'') of New York City, New York terminating the 
investigation as to Gina Group based on settlement agreement and 
consent order stipulation. On the same date, the Commission determined 
not to review an ID (Order No. 70) granting a joint motion of 
complainant and Tory Burch LLC (``Tory Burch'') of New York City, New 
York terminating the investigation as to Tory Burch based on settlement 
agreement and consent order stipulation. On April 24, 2015, the 
Commission determined not to review an ID (Order No. 73) granting a 
joint motion of complainant and Brian Lichtenberg, LLC (``Brian 
Lichtenberg'') of Los Angeles, California terminating the investigation 
as to Brian Lichtenberg based on settlement agreement and consent order 
stipulation. On the same date, the Commission determined not to review 
an ID (Order No. 80) granting a joint motion of complainant and Fila 
U.S.A., Inc. (``Fila'') of Sparks, Maryland terminating the 
investigation as to Fila based on settlement agreement and consent 
order stipulation. On May 4, 2015, the Commission determined not to 
review an ID (Order No. 86) granting a joint motion of complainant and 
Mamiye Imports LLC d/b/a Lilly of New York located in Brooklyn, New 
York and Shoe Shox of Seattle, Washington (collectively, ``Mamiye 
Imports'') terminating the investigation as to Mamiye Imports based on 
settlement agreement and consent order stipulation.
    On May 6, 2015, the Commission determined not to review an ID 
(Order No. 83) granting New Balance's motion to terminate the 
investigation as to New Balance's accused CPT Hi and CPT Lo model 
sneakers based on a consent order stipulation. On May 13, 2015, the 
Commission determined not to review an ID (Order No. 93) granting a 
joint motion of complainant and Iconix Brand Group, Inc. (``Iconix'') 
of New York City, New York terminating the investigation as to Iconix 
based on settlement agreement and consent order stipulation. On June 4, 
2015, the Commission determined not to review an ID (Order No. 108) 
granting a joint motion of complainant and A-List, Inc. d/b/a Kitson 
(``Kitson'') of Los Angeles, California terminating the investigation 
as to Kitson based on settlement agreement and consent order 
stipulation. On June 12, 2015, the Commission determined not to review 
an ID (Order No. 114) granting a joint motion of complainant and 
Esquire Footwear LLC (``Esquire'') of New York City, New York 
terminating the investigation as to Esquire based on settlement 
agreement, consent order stipulation, and consent order. On July 15, 
2015, the Commission determined not to review an ID (Order No. 128) 
granting a joint motion of complainant and Fortune Dynamic, Inc. 
(``Fortune Dynamic'') of City of Industry, California terminating the 
investigation as to Fortune Dynamic based on settlement agreement and 
consent order stipulation. On August 12, 2015, the Commission 
determined not to review an ID (Order No. 154) granting a joint motion 
of complainant and CMerit USA, Inc. (``CMerit'') of Chino, California 
terminating the investigation as to CMerit based on settlement 
agreement and consent order stipulation. On August 14, 2015, the 
Commission determined not to review an ID (Order No. 155) granting a 
joint motion of complainant and Kmart Corporation (``Kmart'') of 
Hoffman Estates, Illinois terminating the investigation as to Kmart 
based on settlement agreement and consent order stipulation.
    Also, on March 12, 2015, the Commission determined not to review an 
ID (Order No. 58) finding Dioniso SRL of Perugia, Italy; Shenzhen 
Foreversun Industrial Co., Ltd. (a/k/a

[[Page 42379]]

Shenzhen Foreversun Shoes Co., Ltd.) (``Foreversun'') of Shenzhen, 
China; and Fujian Xinya I&E Trading Co. Ltd. of Jinjiang, China in 
default. Similarly, on June 2, 2015, the Commission determined not to 
review an ID (Order No. 106) finding Zhejiang Ouhai International Trade 
Co. Ltd. and Wenzhou Cereals Oils & Foodstuffs Foreign Trade Co. Ltd., 
both of Wenzhou, China, in default. Further, on March 25, 2015, the 
Commission determined not to review an ID (Order No. 68) granting the 
motion of Orange Clubwear, Inc. of Westminster, California to terminate 
the investigation as to itself based on a consent order stipulation. On 
May 12, 2015, the Commission determined not to review an ID terminating 
the investigation as to Edamame Kids, Inc. of Alberta, Canada for good 
cause and without prejudice.
    The ALJ issued his final ID on November 17, 2015, 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) a violation of section 337 with respect to the '103 
and '960 trademarks by Foreversun. The ALJ also found no dilution of 
the '753 trademark. The ALJ also issued his recommendation on remedy 
and bonding during the period of Presidential review. He recommended a 
general exclusion order directed to footwear products that infringe the 
asserted trademarks, and recommended cease and desist orders directed 
against each active, remaining respondent found to infringe. On 
December 4, 2015, complainant, respondents, and the Commission 
investigative attorney (``IA'') each filed a timely petition for review 
of the final ID. On December 14, 2015, each of these parties filed 
responses to the other petitions for review.
    On February 3, 2016, the Commission issued notice of its 
determination 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. The Commission also determined not to review the remainder 
of the final ID. The determinations made in the ALJ's final ID that 
were not reviewed became final determinations of the Commission by 
operation of rule. See 19 CFR 210.43(h)(2). The Commission also 
requested the parties to respond to certain questions concerning the 
issues under review and requested written submissions on the issues of 
remedy, the public interest, and bonding from the parties and 
interested non-parties. 81 FR 6886-89 (Feb. 9, 2016).
    On February 17 and 24, 2016, respectively, complainant, 
respondents, and the IA each filed a brief and a reply brief on all 
issues for which the Commission requested written submissions. 
Respondents' reply brief included a request for a Commission hearing to 
present oral argument under Commission rule 210.45(a). On February 29 
and March 3, 2016, respectively, both Converse and the IA each filed a 
response to respondents' request, with each accompanied by a motion for 
leave to file a sur-reply to the request for oral argument. On March 1, 
2016, respondents filed a motion for leave to submit a sur-reply to 
their request for oral argument. The Commission has determined to grant 
all motions for leave to file sur-replies submitted by the parties, and 
to deny respondents' request for a Commission hearing to present oral 
argument.
    Having reviewed the record in this investigation, including the 
ALJ's final ID and the parties' written submissions, the Commission has 
determined to affirm-in-part, reverse-in-part, and vacate certain 
portions of the final ID's findings under review. Specifically, the 
Commission has reversed the ALJ's finding that the '753 trademark is 
not invalid, and instead has found the trademark invalid based on lack 
of secondary meaning. The Commission has also affirmed the ALJ's 
finding that there is a likelihood of confusion with respect to the 
'753 trademark for specific accused footwear products if the trademark 
was not invalid. The Commission has 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 has affirmed the ALJ's finding that 
the asserted common law rights in the '753 trademark are invalid. 
Accordingly, the Commission has determined that there is no violation 
of section 337 with respect to the '753 trademark. The Commission has 
vacated the ALJ's finding that the asserted common law rights in the 
designs depicted in the '103 and '960 trademarks are invalid. The 
Commission has 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. See Comm'n 
Notice (Feb. 3, 2016); ID at 107-08, 121-26, 128-29, 131-32.
    Having found a violation of section 337 as to the '103 and '960 
federally-registered trademarks, the Commission has made its 
determination on the issues of remedy, the public interest, and 
bonding. The Commission has determined that the appropriate form of 
relief is a general exclusion order prohibiting the unlicensed entry of 
footwear products that infringe the '103 or '960 trademarks.
    The Commission further determined that the public interest factors 
enumerated in section 337(d)(1) (19 U.S.C. 1337(d)(1)) do not preclude 
issuance of the general exclusion order. Finally, 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 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 order and opinion were delivered 
to the President and to the United States Trade Representative on the 
day of their issuance. The investigation is terminated.
    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.

    Dated: June 23, 2016.
Lisa R. Barton,
Secretary to the Commission.
[FR Doc. 2016-15339 Filed 6-28-16; 8:45 am]
 BILLING CODE 7020-02-P