81 FR 6886 - Certain Footwear Products: Commission Determination To Review-in-Part a Final Initial Determination Finding a Violation of Section 337; and To Request Written Submissions Regarding the Issues Under Review and Remedy, Bonding, and the Public Interest

INTERNATIONAL TRADE COMMISSION

Federal Register Volume 81, Issue 26 (February 9, 2016)

Notice is hereby given that the U.S. International Trade Commission has determined to review-in-part a final initial determination (``ID'') of the presiding administrative law judge (``ALJ'') finding a violation of section 337 in the above-captioned investigation. The Commission is also requesting written submissions regarding the issues under review and remedy, bonding, and the public interest.

[Federal Register Volume 81, Number 26 (Tuesday, February 9, 2016)]
[Notices]
[Pages 6886-6889]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02465]


-----------------------------------------------------------------------

INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-936]


Certain Footwear Products: Commission Determination To Review-in-
Part a Final Initial Determination Finding a Violation of Section 337; 
and To Request Written Submissions Regarding the Issues Under Review 
and Remedy, Bonding, and the Public Interest

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined to review-in-part a final initial 
determination (``ID'') of the presiding administrative law judge 
(``ALJ'') finding a violation of section 337 in the above-captioned 
investigation. The Commission is also requesting written submissions 
regarding the issues under review and remedy, bonding, and the public 
interest.

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 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

[[Page 6887]]

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 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

[[Page 6888]]

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 certain accused products of defaulting respondent Foreversun 
infringe both the '103 and '960 trademarks. The ALJ also found no 
violation of section 337 with respect to the common law rights asserted 
in the designs depicted in the '753, '103, and '960 trademarks, and 
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 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.
    Having examined the record of this investigation including the ID, 
the parties' petitions for review, and the responses thereto, the 
Commission has determined to review-in-part the final ID. Specifically, 
the Commission has determined 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 has also determined not to 
review the remainder of the final ID.
    On review, with respect to violation, the parties are requested to 
submit briefing limited to the following issues:
    (1) Please explain whether and to what extent the statutory 
presumption of validity for a registered trademark, i.e., 15 U.S.C. 
1057(b), 1115(a), applies where the trademark owner alleges 
infringement which began prior to the date of registration. Please 
include in your discussion how the courts have applied the presumption 
with respect to shifting the burden of production and the burden of 
persuasion. Please discuss applicable legislative history, statutory 
provisions, and case law. Please provide an analysis of how the 
presumption applies to the evidence in the record with regard to 
secondary meaning.
    (2) After secondary meaning factor (7) (evidence that actual 
purchasers associate the trademark with a particular source), please 
provide an analysis of the relative importance of each factor that 
courts consider regarding whether or not a trademark has acquired 
secondary meaning.
    (3) Does secondary meaning factor (2) (exclusivity of use) require 
actual evidence of relative volume of sales, market penetration, and/or 
consumer association with the third-party's use of the relevant 
trademark for this factor to be meaningfully considered? Please provide 
an analysis of the evidence of record in your discussion of relevant 
authorities pertaining to this issue. See, e.g., Echo Travel, Inc. v. 
Travel Associates, Inc., 870 F.2d 1264, 1267 (7th Cir. 1989); Levi 
Strauss & Co. v. Genesco, Inc., 742 F.2d 1401, 1403 (Fed. Cir. 1984).
    (4) What is the appropriate time frame for considering evidence 
pertaining to secondary meaning factor (2) (exclusivity of use)? Does 
the time frame used for secondary meaning factor (3) (length of use) 
inform the appropriate time frame for factor (2)? Please discuss 
applicable case law. Please include in your discussion cases analyzing 
historic third-party use relating to the relevant consumer group.
    (5) With regard to secondary meaning factor (7) (evidence that 
actual purchasers associate the trademark with a particular source), 
please discuss how courts assess survey results with respect to the 
minimum acceptable percentage of survey participants who associate the 
relevant trademark with one source.
    (6) Regarding secondary meaning factor (4) (the degree and manner 
of sales, advertising, and promotional activities), the ALJ found that 
Converse's failure to highlight the CMT in its advertisements did not 
lessen the support of this factor weighing in favor of secondary 
meaning. ID at 53-54. Is this the correct conclusion? Can other 
attributes of the product also identify it with the Complainant (e.g., 
the Chuck Taylor star)? Does the record evidence establish the 
significance of other attributes?
    (7) Did the ID appropriately consider the strength of the '753 
trademark in analyzing infringement?
    In addressing these issues, the parties are: (1) Requested to make 
specific reference to the evidentiary record and to cite relevant 
authority, especially authority relevant to trade dress (i.e., product 
design) cases; and (2) to follow the ALJ's finding and only consider 
the results of one secondary meaning survey, i.e., Ms. Butler's ``CBSC 
only'' survey.
    In connection with the final disposition of this investigation, the 
Commission may (1) issue an order that results in the exclusion of the 
subject articles from entry into the United States, and/or (2) issue 
one or more cease and desist orders that could result in the respective 
respondent 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 (December 1994) 
(Commission Opinion).
    When the Commission contemplates some form of remedy, it must 
consider the effects of that remedy upon the public interest. The 
factors the Commission will 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.
    When the Commission orders some form of remedy, the U.S. Trade 
Representative, as delegated by the President, has 60 days to approve 
or disapprove the Commission's action. See section 337(j), 19 U.S.C. 
1337(j) and the 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. 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 under review that 
specifically address the Commission's questions set forth in this 
notice. The submissions should be concise and thoroughly referenced to

[[Page 6889]]

the record in this investigation. 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, and such submissions should address the 
recommended determination by the ALJ on remedy and bonding. Complainant 
and the IA are also requested to submit proposed remedial orders for 
the Commission's consideration. Complainant is also requested to: (1) 
State the HTSUS numbers under which the accused articles are imported; 
and (2) supply a list of known importers of the accused products. The 
written submissions and proposed remedial orders must be filed no later 
than close of business 14 days after the date this notice issues. Reply 
submissions must be filed no later than the close of business seven 
days later. No further submissions on 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 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 210.4(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, http://www.usitc.gov/secretary/fed_reg_notices/rules/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 of the Commission and must include 
a full statement of the reasons why the Commission should grant such 
treatment. See 19 CFR 210.6. 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 non-confidential 
written submissions will be available for public inspection at the 
Office of the Secretary.
    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 3, 2016.
Lisa R. Barton,
Secretary to the Commission.
[FR Doc. 2016-02465 Filed 2-8-16; 8:45 am]
BILLING CODE 7020-02-P