©2017. Published in Landslide, Vol. 9, No. 4, March/April 2017, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
Feature
Protecting Designs through Trademarks and Trade Dress at the USITC
By Charles J. Hawkins and Patrick J. Stafford
Like all areas of intellectual property, trademark law has experienced significant and wide-ranging developments in 2016. One particular area of interest is the enforcement of trademark and trade dress rights at the U.S. International Trade Commission (USITC). This article analyzes a recent investigation from the USITC, Certain Footwear Products, Inv. No. 337-TA-936, in which Converse sought to enforce registered trademarks as well as general trade dress rights covering its Chuck Taylor All Star shoes against a number of respondents, including Wal-Mart, Skechers, and New Balance. While the USITC found no violation for one trademark and associated trade dress, the USITC did find a violation of two registered and common law trademarks asserted by Converse. While the law remains in flux, this case serves as an interesting study on the use of trade dress and trademarks to protect product designs. The result of this case also serves as a useful aid in assessing proper protection for fashion products and designs.
Overview of the USITC Investigation
On August 18, 2014, Converse filed a complaint in the USITC alleging that a number of respondents, including Wal-Mart, Skechers, and New Balance, unlawfully imported into the United States, sold for importation, and/or sold within the United States after importation certain footwear products that violated registered and common law trademarks Converse asserted covered its Chuck Taylor All Star shoes.1 The complaint alleged the respondents violated section 337 of the Tariff Act2 through unfair competition, false designation of origin, common law trademark infringement, and trademark dilution.3 Specifically, Converse asserted U.S. Trademark Registration Nos. 4,398,753 (the ’753 trademark); 3,258,103 (the ’103 trademark); and 1,588,960 (the ’960 trademark), as well as the corresponding common law trademarks.4
During the investigation, many of the original respondents were found in default or terminated from the investigation based on good cause, through settlement, and/or consent order stipulation. On November 17, 2015, Administrative Law Judge (ALJ) Bullock issued a final initial determination (ID), finding a violation of section 337 as to the ’753 trademark, the ’103 trademark, and the ’960 trademark.5 However, ALJ Bullock did not find any violation of the asserted common law trademarks.6 Additionally, ALJ Bullock recommended a general exclusion order directed to footwear products that infringe the asserted registered trademarks, as well as cease and desist orders directed against each active, remaining respondent found to infringe the ’753 trademark.7 In the ID, ALJ Bullock found: “(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) Foreversun violated Section 337 with respect to the ’103 and ’960 trademarks.”8 ALJ Bullock further found no dilution of the ’753 trademark.9
In February 2016, the USITC issued a notice to review: (1) the finding of no invalidity for the ’753 trademark, (2) the findings relating to the infringement of the ’753 trademark, (3) the invalidity of common law rights in the ’753 trademark, and (4) the finding of no violation of section 337 for the ’103 and ’960 trademarks.10 On June 23, 2016, the USITC issued its final determination.11 In the final determination, the USITC reversed the ALJ’s finding that the ’753 trademark was not invalid, finding instead that the trademark was invalid due to the lack of secondary meaning.12 Specifically, the USITC found that Converse’s ’753 trademark was invalid based on the exclusivity of use factor. In analyzing the exclusivity of use factor, the Commission found that there was “substantial record evidence” of third-party use of Converse’s ’753 trademark from the 1920s to the present by a number of brands as shown by yearly advertisements in three major catalog retailers.13 However, the USITC affirmed ALJ Bullock’s finding that a likelihood of confusion exists with respect to the ’753 trademark for certain accused products, to the extent that the trademark was not invalid.14 Thus, the USITC found that both the registered and common law ’753 trademark was invalid and not infringed (based on it being invalid).15
With regard to the ’103 and ’960 trademarks, the USITC vacated ALJ Bullock’s findings of no violation of the common law trademarks, and affirmed ALJ Bullock’s finding that the federally registered ’103 and ’960 trademarks were infringed.16 The USITC further found that the common law trademarks were coextensive in scope as the federally registered trademarks.17 Thus, as the USITC found a violation of the federally registered rights, it found there was also a violation of the common law trademarks.18 Given the violation of section 337 for the ’103 and ’960 trademarks, the USITC issued a general exclusion order to prohibit the unlicensed entry into the United States of products that infringe the two trademarks.19 The USITC specifically held that a general exclusion order was not contrary to the public interest, because while some respondents appeared before the USITC to contest the allegations in the complaint, other respondents failed to appear and therefore defaulted.20
Effect of the Investigation on Enforcing Trademarks and Trade Dress
The USITC’s ruling in Certain Footwear Products did not completely repudiate the use of trademarks and trade dress to protect designs. However, its ruling on the ’753 trademark provides beneficial insights on protecting designs through common law trademarks and trade dress.
A comparison between the subject matter of Converse’s ’753 trademark, on the one hand, and the ’103 and ’960 trademarks, on the other hand, provides valuable insight into the types of designs most likely to be protected. As background, the ’753 trademark covered the midsole of Converse’s Chuck Taylor All Star high-top shoes. As stated by Converse, this trademark covered “the combination of the toe cap, multi-textured toe bumper, and two midsole stripes that Converse commonly uses in connection with its Chuck Taylor All Star (CTAS) high-top shoes.”21 As such, the ’753 trademark covered the entire upper part of the shoe, everything except the bottom sole of the shoe. Therefore, the entire portion of the shoe visible from a side and top profile was covered by this trademark.
In contrast, the ’103 and ’960 trademarks covered the outsole design of the Chuck Taylor All Star high-top shoes. In particular, these trademarks covered the design on the bottom sole of the Chuck Taylor shoes. Converse has been marketing and selling the shoes covered by these trademarks since the 1930s.22 Unlike the ’753 trademark, the ’103 and ’960 trademarks were directed to a more narrow and arguably more unique design of the Chuck Taylor shoes—the specific diamond design on the bottom of the shoes.
The ’753 trademark covered the entire upper sole of the shoe, which was arguably much easier for other companies to infringe and to dilute through similar designed shoes and advertisements using the approximate or same likeness. As a result, in view of the USITC’s ruling in Certain Footwear Products, trademark and trade dress coverage for designs becomes a double-edged sword—the broader the coverage one seeks, the more likely the trademark or trade dress will become generic and unenforceable.
The axiom of a double-edged sword is further supported when analyzing the USITC’s rationale for finding the ’753 trademark was invalid. In reviewing the validity of the ’753 trademark, the USITC relied on the ’753 trademark’s alleged secondary meaning by analyzing the following seven factors: (1) association of the mark with a particular source by actual purchasers (typically measured by consumer surveys); (2) the degree and manner of use; (3) the exclusivity of use; (4) the length of use; (5) the degree and manner of sales, advertising, and promotional activities; (6) the effectiveness of the effort to create secondary meaning; and (7) deliberate copying.23 As noted by the USITC, the strongest and most relevant evidence regarding whether a mark has acquired secondary meaning is evidence by a public opinion survey or poll.24 In applying these factors to the ’753 trademark, the USITC found that the survey evidence and exclusivity of use weighed against the trademark’s validity. Specifically, the USITC relied on findings: (1) of extensive use of the trademark design among the many third parties; (2) of extensive time (over 80 years) of the third-party use; and (3) that the use by third parties was for the same goods and same consumer class.
Given the findings by the USITC, it appears very difficult for a trademark or trade dress to remain valid if it covers an entire product design. Specifically, the owner of the mark or trade dress must vigilantly enforce this mark to guarantee that the design never becomes used commonly within the marketplace. Of particular concern is the USITC’s reliance on general advertisements and dictionaries that used generic depictions of sneakers that had the same design as Converse’s ’753 trademark. As a result, an owner of mark or trade dress must not only police other competitor’s use of the design, but must also police general media depictions of the type of product to ensure the mark or trade dress does not become generic. Policing of the mark for the overall design of a product is complicated, however, as removing depictions of the covered design from the general media may still not be enough to protect the design. Instead, the heavy reliance on consumer surveys in this analysis may require ensuring that the consumer equates the design with the owner of the mark or trade dress. This can be a difficult task, as demonstrated by Converse’s failure to protect the ’753 mark. In contrast, as demonstrated by the validity of the more narrow ’103 and ’960 trademarks, protecting a design may be best served by focusing on specific designs incorporated into the final design and not relying on the entire design as a whole. This strategy may require the designer to acquire multiple registered trademarks to ensure proper protection of the entire product.
Understanding the potential limitations of trademark or trade dress protection, one alternative way to protect designs of a product is through a design patent. A design patent allows for the protection of an entire product design or other designs within a product. The level of specificity in a design patent allows for a more definite scope of protection. Additionally, by filing a patent application with the U.S. Patent and Trademark Office, the owner of a design for a product can also obtain stronger protection that is not impacted by consumer surveys or third-party uses. Instead, the owner of a design patent may more easily enforce the patent against any infringers. In Certain Footwear Products, Converse identified the strength of design patent protection when it identified the many competitors that had similar shoe designs. One limitation of using design patents to protect product designs is the duration of protection, which is limited as compared to trademark and trade dress protection. Design patent protection only lasts 15 years as compared to the potential for perpetual trademark or trade dress protection. Thus, the best solution for protecting a design is likely a mix of design patents, trademarks, and trade dress, given the benefits and drawbacks of each solution.
The implications of this USITC decision limit the coverage of trade dress and trademarks to cover product designs, including fashion and overall product look. While trade dress and trademarks remain useful tools in protecting designs, the owner of the design must be conscientious and diligent in ensuring the design remains exclusively used by the owner and consumers understand the design is for the owner’s product only. This can be a daunting task, and other intellectual property rights can assist in preserving protection. However, a silver bullet providing full protection of the design may be elusive.
Conclusion
Given the USITC’s ruling in this case, one may infer that perhaps the USITC found the trade dress for the midsole of Converse’s Chuck Taylor All Star shoes to be too generic to be valid based on the concern that it would reach an inordinate number of potential shoe designs in existence. However, this case appears to be one more case in a general trend toward limiting the enforceability of broader trade dress rights. This case could thus have a major impact on industries that rely on product designs to preserve market share. One such industry is the fashion industry, which was the subject of this USITC case. Like the respondents in this case, established fashion retailers may be more susceptible to competition from “fast-fashion” retailers, as this ruling allows these companies to more closely copy the designs of more expensive companies with less fear of retaliation. This case also highlights a concern that the United States lacks the kind of “design rights” protections that garment designs in many foreign jurisdictions enjoy through relatively stronger trade dress protections. As highlighted by this decision, neither copyright nor patent law is a particularly good fit for the fashion industry. As such, until now, companies like Converse sought to stretch trademark law to apply to these design rights, but it appears this will no longer be a guaranteed successful remedy.
Endnotes
1. Certain Footwear Prods., Inv. No. 337-TA-936, Complaint (USITC Aug. 18, 2014).
2. 19 U.S.C. § 1337.
3. Complaint, supra note 1, at 2.
4. Id. at 3–18.
5. Certain Footwear Prods., Inv. No. 337-TA-936, Initial Determination (USITC Nov. 17, 2015).
6. Id. at 132.
7. Id. at 133–38.
8. Eric Schweibenz & Alex Englehart, ITC Issues General Exclusion Order in Certain Footwear Products (337-TA-936), ITC 337 L. Blog (June 24, 2016), Article no longer available.
9. Initial Determination, supra note 5, at 106.
10. Certain Footwear Prods., Inv. No. 337-TA-936, Notice of Review (USITC Feb. 3, 2016).
11. Certain Footwear Prods., Inv. No. 337-TA-936, Final Determination and General Exclusion Order (June 23, 2016).
12. Id. at 17.
13. Id. at 20–22.
14. Id. at 28.
15. Id. at 28–29.
16. Id. at 29.
17. Id.
18. Id.
19. Id. at 29–30.
20. Id. at 29–34.
21. Id. at 7.
22. Id.
23. Id. at 14.
24. Id.