WASHINGTON — Converse Inc. has some way to go to prove to the International Trade Commission that its All Star Chuck Taylors are protected by trademark.
During the first day of a five-day evidentiary hearing, ITC officials surmised that Converse did not establish “secondary meaning” and does not have a valid midsole trademark — giving Converse rivals Skechers Inc., Wal-Mart Stores Inc. and others a victory in the first round.
“It’s the staff’s view that the issue is whether the Chuck Taylor toe cap, toe bumper and midsole stripes on their own are source-identifying and have therefore acquired a secondary meaning,” an ITC staff official said at the hearing. “It’s the staff’s belief that the evidence will show that they are not and that therefore the alleged CMT [Converse midsole trademark] is not a valid and protectable trademark.”
“As you’ve heard, Converse is expected to offer evidence that Chuck Taylor All Star shoes, or Chucks, have been around for nearly a century and that they are well-known iconic shoes and that they have been worn by…artists, musicians and famous celebrities for decades,” the ITC official said. “Indeed, Converse will offer evidence that Chucks are the best-selling sneakers in the world and that there have even been books written about them. Converse will also offer testimony that Converse and Chuck Taylor shoes are nearly synonymous. Nevertheless, staff expects that the evidence will show that the alleged Converse midsole trademark has not acquired the necessary secondary meaning.”
However, the staff recommendation is just one piece of the entire ITC case. The administrative law judge presiding over the case will weigh equally the ITC staff’s recommendations and the arguments made by Converse and the defendants, according to an ITC spokeswoman.
Meanwhile, Converse laid out its case, arguing that it has a valid trademark and is being injured by Wal-Mart, Skechers and the other defendants. Jim Calhoun, president and chief executive officer of Converse, also testified at the hearing.
“The common denominator is the respondents’ unauthorized use of Converse’s midsole trademark,” said James Adduci, counsel for Converse. “This is the nexus between unfair acts in this investigation and damage caused to the Converse brand by importation and sale in the United States of the accused shoes. If consumers conclude they can enjoy Converse’s ‘cool factor’ by infringing often with lower-priced shoes, this will cause real damage to the brand itself. The evidence will show this threat to Converse’s brand equity is real, immediate and imminent.
“Taken together, we will show that Converse has a domestic industry that is threatened by substantial injury from U.S. sales of the accused sneakers,” he added. “Not only has Converse lost sales and profits associated with those sales, but its brand has suffered due to the unwanted association that U.S. consumers are making between Converse brand and that of the infringers.”
Morgan Chu, counsel for Skechers, who spoke on behalf of all of the defendants, argued that the Converse trademark case is an “unusual one.”
“Most trade cases involve well-known names such Coca-Cola, McDonald’s or other names or perhaps a highly stylized or fanciful arbitrary logo like the golden arches,” Chu said. “This case doesn’t involve a name or someone that has adopted a logo for the purpose of being a source identifier. Instead, this is a case where for 80 years and more, many, many companies, some before Converse and many since Converse, have used some basic features on a sneaker. Over that period of time of 80 or more years, no one, not Converse, not those who came before, not others, said that that combination of those three very common elements somehow constituted a trademark.”
Chu said Converse’s trademark covers design elements that are part of the public domain and therefore cannot be claimed by one company under a trademark. He argued that if design elements are used by other companies — in this case dating back to the Thirties — they cannot be associated with a single source, one of the key questions in the case.
The case deals with the complex legal question that has plagued the fashion industry through time — what constitutes a legal knockoff versus trademark infringement.
Converse, owned by Nike Inc., filed its trademark infringement complaint with the ITC against 32 retailers and manufacturers in October, alleging they infringed on some of the brand’s trademarks used primarily in its All Star Chuck Taylor. The ITC initiated an investigation against the companies in November. Converse also filed lawsuits in federal court against the companies.
Converse claimed in the complaint that all of the defendants have infringed on its iconic midsole trademark design, made up of a toe bumper and a toe cap, plus either an upper stripe and/or lower stripe, associated with its “All Star” high-top sneakers that were introduced in 1917 and renamed “Chuck Taylor” after a Converse salesman and basketball player. A portion of the defendants are accused of illegally infringing on Converse’s outsole design, comprised of a distinct diamond pattern.
Several companies named in the complaint, including Tory Burch, Aldo Group, Fila USA, Iconic Brand Group, Ralph Lauren Corp., Hennes & Mauritz and Zulily Inc. have entered into settlement agreements with Converse since the complaint was filed and have agreed to stop importing the allegedly infringing shoes.
But Wal-Mart, Skechers U.S. and Highline United LLC are among the firms that have refused to settle and challenged Converse’s trademark assertion at the hearing Tuesday.
Converse is alleging that defendants violated section 337 of the Tariff Act of 1930 in the importation into the U.S. and sale of certain of its trademarks, such as the Chuck Taylor sneaker design. It is requesting that the ITC impose a “general exclusion order” that directs U.S. Customs and Border Protection to stop all of the allegedly infringing imports from entering the U.S. It also seeks a limited exclusion order or cease-and-desist order from importing the products into the U.S.
The administrative law judge will issue an initial determination by Nov. 17 if the case does not settle and the entire ITC will review his determination and may adopt, modify or reverse it. If the commission declines to review the initial determination, it will become the final determination.