Converse's Chuck Taylor All-Star Trademark Gets Another Shot
On October 30, 2018, the Federal Circuit overturned a 2016 ruling by the International Trade Commission ("ITC") that found Converse's trademark of the midsole design of its Chuck Taylor All Star invalid, and at the same time declined to bar the importation of a number of sneaker brands that Converse alleged had copied its Chuck Taylor trade dress. (Converse, Inc. v. ITC, No. 2016-2497 (Fed. Cir. Oct. 30, 2018)).
The Federal Circuit decision has restarted the running dispute between Converse's Chuck Taylor shoes (the "Chuck" or "Chuck All Star") and several companies Converse claims infringed on their popular Chuck trade dress. The Federal Circuit ruled that the ITC applied the wrong standard in determining that Converse's registered mark of the midsole (and the common law rights in the same) was invalid. If you're a sneaker fanatic and an IP lawyer, this is your case.
The Chuck is a popular retro shoe, with estimated sales of over a billion pairs worldwide since they were introduced almost a century ago. In recent years, Converse has been actively policing its mark and sending cease and desist letters to competitors it believes are producing knockoff kicks. It has also filed a flurry of lawsuits against producers it believes infringed the Chuck design, with most cases having settled.
To further protect its Chuck All Star's midsole trade dress, Converse obtained a trademark, U.S. Registration No. 4,398,753 ("the '753 mark"), for their design in September 2013. The '753 mark "consists of the design of the two stripes on the midsole of the shoe, the design of the toe cap, the design of the multi-layered toe bumper featuring diamonds and line patterns, and the relative position of these elements to each other." [see image below] Converse claimed that both Skechers and others were selling the sneakers at issue before Converse's mark was registered.
In order to be valid, a trademark must identify a product's source. A trademark can do this in one of two ways: (a) the mark is inherently distinctive, or (b) the mark has acquired distinctiveness. Acquired distinctiveness means it has achieved secondary meaning (i.e., in the mind of the public, the mark identifies the source as opposed to the product). In the case of product-design marks like the Chuck, trade dress can never be inherently distinctive. Thus, Converse had to show that its mark had attained secondary meaning, that is, that when consumers see the trademarked aspects of the Chuck shoe, consumers automatically associate them with the Chuck.
In October 2014, on the heels of Converse's other efforts to police its mark in court and with private settlements, Converse filed an action with the ITC asking for a general exclusion order under Section 337 against alleged infringers of its '753 mark. An ITC exclusion order prohibits infringing products covered by the order from being imported into the U.S. and thereafter sold. The main dispute between the parties was whether the Chuck mark had acquired secondary meaning, making it protectable. While Converse argued it had, the respondents produced a survey suggesting that consumers did not solely associate the particular trade dress with Converse, giving the agency more reason to find a scuff in Converse's efforts to show secondary meaning. Converse also argued that its federal registration should provide the mark with a presumption of secondary meaning – not just after its 2013 registration, but before as well. In July 2016, the ITC issued its ruling booting Converse's request for relief, which was a win for Skechers and New Balance. The ITC found both the registered trade dress and common law rights invalid in light of its determination that the mark had not acquired secondary meaning (though, the ITC ruled that had the marks been valid, they had been infringed). As such, the ITC put its foot down and refused to enter an exclusion order with respect to the respondents. Converse appealed the ruling to the Federal Circuit. As of the Federal Circuit's ruling, most of the respondents either defaulted or settled, leaving only three companies in the litigation: Skechers USA Inc. ("Skechers"), New Balance Athletics, Inc., ("New Balance") and HU Liquidation LLC.
Interestingly enough, New Balance was not named in the original 2014 ITC action. Instead, New Balance became concerned that an ITC general exclusion order, if granted, could be broad enough to cover their PF Flyer sneakers, which seem to have some common design elements to the Chuck. New Balance's ensuing motion to intervene in the ITC action was subsequently granted. During the pendency of the ITC action, in December 2014, New Balance also sued Converse in a Massachusetts federal court seeking a declaratory judgment that its PF Flyers are non-infringing and that Converse's '753 mark was invalid. Given that the ITC was trying similar issues on for size, the district court stayed the action in 2015.
In vacating the ITC ruling, the Federal Circuit determined, among other things, that the ITC used the incorrect standard in determining the validity of Converse's '753 mark, laying out the specifics of a six-factor test to determine secondary meaning. The six factors to be weighed together to determine secondary meaning include "(1) association of the trade dress with a particular source by actual purchasers (typically measured by customer surveys); (2) length, degree, and exclusivity of use; (3) amount and manner of advertising; (4) amount of sales and number of customers; (5) intentional copying; and (6) unsolicited media coverage of the product embodying the mark." (Converse, Inc. v. ITC, No. 2016-2497, (Fed. Cir. Oct. 30, 2018)). Concerning factor 2, the Federal Circuit stated that the ITC erred in relying too heavily on prior uses long predating the registration and first infringing use and instead should have focused on recent uses, such as within the last five years of the relevant date. Moreover, in rejecting Converse's argument that its mark should have a presumption of validity prior to registration, the appeals court held that while registration confers a presumption of validity as of the date of registration, it does not confer a presumption of secondary meaning before the date of registration (this was relevant, as the alleged infringement began before the 2013 registration).
The case was remanded for further proceedings in the ITC. So what does Converse need to do to win? The Federal Circuit states that "Converse must establish without the benefit of the presumption that its mark had acquired secondary meaning before the first infringing use by each respondent." With the lengthy Federal Circuit opinion in tow, both sides will lace up and argue again whether the midsole trade dress of the Chuck, a beloved sneaker for decades, is worthy of federal protection (and not just the public's adoration).