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Converse, Inc. v. International Trade Commission

Fed Cir Explores Trademark Secondary Meaning Analysis at Pre-Registration and Post-Registration Periods

Converse, Inc. v. International Trade Commission, __ F.3d ___, 2018 WL 5536405 (Fed. Cir. Oct. 30, 2018) (DYK, O’Malley (CIP/DIP), Hughes) (ITC) (4 of 5 stars)

Fed Cir vacates ITC determination of no Section 337 violation. The ITC erred in its determination that Converse lacked valid trademark rights in the midsole design of its Chuck Taylor All Star Shoes due to an absence of acquired secondary meaning, and erred in its assessment of infringement had Converse possessed rights.

Timing of secondary meaning analysis: The ITC erred in its secondary meaning analysis by failing to divide the inquiry into pre-registration and post-registration periods. The opinion treats Converse as having a single mark, extending across these two periods (the ITC had treated Converse as having two marks, one common-law, one registered, which the opinion finds “confusing and inaccurate”). Op. at *2. For accused infringers whose first alleged use of the mark was post-registration, Converse is entitled to a presumption of acquired secondary meaning under the Lanham Act. But for accused infringers whose use pre-dated registration (which was all the accused infringers in this appeal), no presumption is available. The opinion rejects Converse’s argument for a presumption of acquired secondary meaning “at any and all times, including before registration,” as lacking precedential or statutory support. On remand, Converse may attempt to prove that the mark acquired secondary meaning pre-registration under this standard (the opinion declines to find that Converse waived this argument). The opinion also declines to determine whether the validity of Converse’s registered mark needs to be addressed on remand, noting that all the intervenors in this appeal were accused of pre-registration infringement. The opinion refers to the fact that Converse was seeking a General Exclusion Order as possibly keeping the validity issue live.

Secondary meaning standards: The ITC also erred in the standards applied for secondary meaning. Noting some variation among the regional circuits, the opinion adopts a six-factor analysis consisting of: “(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.” Op. at *7. The ITC erred in its analysis of factor 2 by over-relying on Converse’s long past uses of the mark. “The secondary meaning analysis primarily seeks to determine what is in the minds of consumers as of the relevant date, and factor 2 must be applied with this purpose in view.” Op. at *7. The opinion endorses a five-year period before the first infringing use as the most relevant. “[U]ses older than five years should only be considered relevant if there is evidence that such uses were likely to have impacted consumers’ perceptions of the mark as of the relevant date.” Op. at *8.

The ITC also erred by relying on prior third-party uses of shoes whose designs were not substantially similar to Converse’s mark. On remand, the ITC should only analyze those marks that are substantially similar to Converse’s.

The opinion also criticizes the ITC’s overreliance on survey evidence from the accused infringers, noting that the survey in question has “little probative weight” unless it was within five years of an accused infringer’s first use. On remand, if the validity of the registered mark is in issue, the opinion offers some guidance for how the ITC should address the survey.

Likelihood of confusion standards: The ITC also erred in its likelihood of confusion analysis, and the ALJ’s opinion did not adequately describe its basis for finding that some accused products infringe, and others do not. Citing Versa Products, 50 F.3d 189 (3rd Cir. 1995), and Engineering Dynamics, 26 F.3d 1335 (5th Cir. 1994), the opinion holds that “accused products that are not substantially similar cannot infringe.” Op. at *9. “On remand, the ITC should reassess the accused products to determine whether they are substantially similar to the mark in the infringement analysis.” Id. at *10.

The opinion rejects the accused infringers’ other proposed grounds for affirmance. It rejects the argument that the brand-name labeling of accused products was dispositive of the likelihood of confusion as a matter of law. It also rejects the argument that a showing of harm to Converse’s reputation is a prerequisite for infringement. And it finds no error in the ITC’s determination that Converse’s mark is nonfunctional.

Partial concurrence: Judge O’Malley criticizes the majority for “reach[ing] issues that that are not properly before us.” CIP at 1. She would not have remanded questions concerning the validity of Converse’s registered mark, nor would she have taken up any infringement issues. She also would have ordered the ITC to enter a remedy against those accused infringers who were in default, or at least would have explained why the public interest was against doing so. Judge O’Malley’s opinion also cites analytical concerns with the majority’s treatment of the timing issues in the secondary meaning analysis.

KEYWORDS: TRADEMARK; INTERNATIONAL TRADE COMMISSION; SECTION 337; SECONDARY MEANING; LIKELIHOOD OF CONFUSION