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Swagway, LLC v. International Trade Commission

ITC Determinations on Trademark Are Not Preclusive in District Court

Swagway, LLC v. International Trade Commission, __ F.3d __, 2019 WL 2049148 (Fed. Cir. May 9, 2019) (Dyk, Mayer, CLEVENGER) (ITC) (3 of 5 stars)

Fed Cir affirms determination of section 337 violation from trademark infringement. The ITC did not err in determining that the SWAGWAY mark, used on self-balancing hoverboard products, infringed the stylized and non-stylized marks of complainant Segway, Inc. The opinion rejects Swagway’s argument that the lack of actual confusion evidence, particularly in view of Swagway’s concurrent use over time, should have received more weight so as to be “essentially dispositive.” Op. at 9. Per Guild Mortgage, 912 F.3d 1376 (Fed. Cir. 2019), evidence of concurrent use without evidence of actual confusion is relevant, but must be balanced against other evidence. The opinion criticizes Swagway’s assertion of concurrent use, and finds the ITC’s analysis of the DuPont factors generally satisfactory. That Segway had not presented survey evidence did not weigh against a likelihood of confusion, per Midwestern Pet Foods, 685 F.3d 1046 (Fed. Cir. 2012).

The Fed Cir declines to reach Swagway’s argument that the ITC should have entered a consent order against further importation that Swagway had presented, rather than an order of the ITC’s own. Swagway was apparently concerned that the ITC’s order, which specifically recited that Swagway had infringed Segway’s marks, might receive preclusive effect in co-pending litigation in Delaware. Per Texas Instruments, 90 F.3d 1588 (Fed. Cir. 1996), and Tandon, 831 F.2d 1017 (Fed. Cir. 1987), ITC determinations on patent issues do not have preclusive effect in district court. The same rule applies with respect to ITC determinations on trademark issues. Because Swagway had agreed at oral argument to withdraw its argument concerning the consent order if the Court found ITC trademark decisions non-preclusionary, it was unnecessary to reach this aspect of the appeal.

KEYWORDS: ITC; SECTION 337; TRADEMARK; LIKELIHOOD OF CONFUSION; ACTUAL CONFUSION; PRECLUSION