Fed Circuit sides with Converse in TM appeal from USITC
The US Court of Appeals for the Federal Circuit has sided with Converse in a trademark dispute, finding that the US International Trade Commission (ITC) erred in determining that the famous All Star mid-sole trademark is invalid.
Yesterday, October 30, the Federal Circuit vacated and remanded the ITC’s decision for further proceedings consistent with its opinion, which it said clarified and in some ways changed the legal landscape with respect to proving secondary trademark meaning.
Shoe brand Converse, which is owned by Nike, owns a US trademark (4,398,753, registered in 2013) covering the trade dress elements of the mid-sole design of the Chuck Taylor All Star line of shoes.
Converse also claimed to have common law trademark rights, which predate the registration, in the mark.
In 2014, Converse filed a complaint at the ITC, alleging that 31 retailers and shoe designers were importing and selling shoes which infringe the ‘753 mark.
During the ITC’s investigation, some of the respondents defaulted. The remaining respondents, which included Skechers and New Balance, asserted that the accused products did not infringe the mark and, regardless, that the mark is invalid.
Of particular importance to the ITC proceedings and the Federal Circuit’s assessment was whether the unregistered mark had acquired secondary meaning before 2013, when it was registered.
Converse claimed that the mid-sole design had acquired secondary meaning before 2013, as the mark had been used by the brand since 1932.
In contrast, the respondents claimed that Converse’s use of the mark was not substantially exclusive and consumers did not associate the mark with a single source.
In 2016, the ITC issued a final determination that the mid-sole design of the All Star line of shoes is not a valid registered or unregistered trademark, as the mark had not acquired secondary meaning.
However, the ITC noted that the accused footwear products would be infringing if the mark had been found valid.
The ITC refused to enter an exclusion order, as requested by Converse, and Converse appealed against the decision.
Yesterday, the Federal Circuit said that the ITC made “a series of errors” by applying the wrong standards in its assessment.
In its investigation, the ITC did not establish when, if ever, the mark established secondary meaning before its registration, the court said.
The Federal Circuit then prescribed a six-part test for secondary meaning.
The six factors, which are “interrelated and should be evaluated together”, are: association of trade dress with a particular source; length, degree, and exclusivity of use; amount and type of advertising; number of sales and customers; intentional copying; and unsolicited media coverage of the product embodying the mark.
In addition, the court said the ITC erred in determining that third-party use of the mark (prior to its registration) had occurred, as the instances cited were “shoes that bear at most a passing resemblance to the ‘753 trademark”.
The ITC therefore erred in finding a likelihood of confusion with respect to accused products that lack one or more elements of the ‘753 trademark, the court held, as “marks that are not substantially similar cannot be considered”.
On remand, the Federal Circuit said that the ITC should constrain its analysis of use to marks that are substantially similar to Converse’s registered mark.
Five years of exclusive and continuous use will create a presumption of secondary meaning, the court added, so “the ITC should rely principally on uses within the last five years”.
Circuit Judge Kathleen O’Malley offered a dissenting opinion, but only in relation to procedural facts. She claimed that the ITC is required to grant relief to Converse, and the majority should have ordered the ITC to enter a remedy against the parties that defaulted in the proceedings.
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