Notice2023-07530
Certain Casual Footwear and Packaging Thereof; Notice of a Commission Determination To Review in Part a Final Initial Determination Finding No Violation; Request for Written Submissions on the Issues Under Review, Remedy, Bonding, and the Public Interest
Primary source
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Published
April 11, 2023
Issuing agencies
International Trade Commission
Abstract
Notice is hereby given that the U.S. International Trade Commission ("Commission") has determined to review in part a final initial determination ("ID") issued by the presiding administrative law judge ("ALJ") finding no violation of section 337 and to solicit briefing from the parties on the issues under review, as well as briefing from the parties, interested government agencies, and any other interested parties on the issues of remedy, bonding, and the public interest.
Full Text
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<title>Federal Register, Volume 88 Issue 69 (Tuesday, April 11, 2023)</title>
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[Federal Register Volume 88, Number 69 (Tuesday, April 11, 2023)]
[Notices]
[Pages 21712-21715]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-07530]
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INTERNATIONAL TRADE COMMISSION
[Investigation No. 337-TA-1270]
Certain Casual Footwear and Packaging Thereof; Notice of a
Commission Determination To Review in Part a Final Initial
Determination Finding No Violation; Request for Written Submissions on
the Issues Under Review, Remedy, Bonding, and the Public Interest
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
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SUMMARY: Notice is hereby given that the U.S. International Trade
Commission (``Commission'') has determined to review in part a final
initial determination (``ID'') issued by the presiding administrative
law judge (``ALJ'') finding no violation of section 337 and to solicit
briefing from the parties on the issues under review, as well as
briefing from the parties, interested government agencies, and any
other interested parties on the issues of remedy, bonding, and the
public interest.
FOR FURTHER INFORMATION CONTACT: Carl P. Bretscher, Esq., Office of the
General Counsel, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, telephone (202) 205-2382. Copies of non-
confidential documents filed in connection with this investigation may
be viewed on the Commission's electronic docket (EDIS) at <a href="https://edis.usitc.gov">https://edis.usitc.gov</a>. For help accessing EDIS, please email
<a href="/cdn-cgi/l/email-protection#a4e1e0edf797ecc1c8d4e4d1d7cdd0c78ac3cbd2"><span class="__cf_email__" data-cfemail="bafffef3e989f2dfd6cafacfc9d3ced994ddd5cc">[email protected]</span></a>. General information concerning the Commission may
also be obtained by accessing its internet server at <a href="https://www.usitc.gov">https://www.usitc.gov</a>. Hearing-impaired persons are advised that information on
this matter can be obtained by contacting the Commission's TDD terminal
on (202) 205-1810.
SUPPLEMENTARY INFORMATION: The Commission instituted this investigation
on July 9, 2021, based on a complaint filed by Crocs, Inc. of
Broomfield, Colorado (``Crocs''). 86 FR 36303-304 (July 9, 2021). The
complaint, as supplemented, alleges violations of section 337 of the
Tariff Act of 1930, as amended, 19 U.S.C. 1337 (``section 337''), in
the importation into the United States, sale for importation, or sale
in the United States after importation of certain casual footwear and
packaging thereof by reason of infringement, false designation of
origin, and dilution of one of more of U.S. Trademark Registration Nos.
5,149,328; 5,273,875 (collectively, the ``3D Marks''); and 3,836,415
(``the Word Mark'') (all collectively, ``the Asserted Marks''). Id. The
complaint alleges that a domestic industry exists, and that the threat
or effect of certain alleged violations is to destroy or substantially
injure an industry in the United States. Id.
The Commission's notice of investigation named numerous
respondents, including: Hobby Lobby Stores, Inc. of Oklahoma City,
Oklahoma (``Hobby Lobby''); Quanzhou ZhengDe Network Corp. d/b/a Amoji
of
[[Page 21713]]
Quanzhou, Fujian Province, China (``Amoji''); Skechers USA, Inc. of
Manhattan Beach, California (``Skechers''); SG Footwear Meser Grp. Inc.
a/k/a S. Goldberg & Co. of Hackensack, New Jersey (``SG Footwear'');
Cape Robbin Inc. of Pomona, California (``Cape Robbin''); Dr. Leonard's
Healthcare Corp. d/b/a Carol Wright of Edison, New Jersey (``Dr.
Leonard's''); Fullbeauty Brands Inc. d/b/a Kingsize of New York, New
York (``Fullbeauty''); Legend Footwear, Inc. d/b/a/Wild Diva of City of
Industry, California (``Wild Diva''); Fujian Huayuan Well Import and
Export Trade Co., Ltd. of Fuzhou, Fujian Province, China (``Fujian'');
Yoki Fashion International LLC of New York, New York (``Yoki'');
Bijora, Inc. d/b/a Akira of Chicago, Illinois (``Akira''); Hawkins
Footwear, Sports, Military & Dixie Store of Brunswick, Georgia
(``Hawkins''); Shoe-Nami Inc. of Gretna, Louisiana (``Shoe-Nami''); PW
Shoes, Inc. a/k/a P&W of Maspeth, New York (``PW''); 718Closeouts of
Brooklyn, New York (``718Closeouts''); Crocsky of Austin, Texas
(``Crocsky''); Hobibear Shoes and Clothing Ltd. of Brighton, Colorado
(``Hobibear''); Ink Tee of Los Angeles, California (``Ink Tee'');
Maxhouse Rise Ltd. of Hong Kong, China (``Maxhouse''); La Modish
Boutique of West Covina, California (``La Modish''); Loeffler Randall
Inc. of New York, New York (``Loeffler Randall''); Star Bay Group Inc.
of Hackensack, New Jersey (``Star Bay''); and Royal Deluxe Accessories,
LLC of New Providence, New Jersey (``Royal Deluxe''). The Office of
Unfair Import Investigations (``OUII'') is also participating as a
party.
On November 17, 2021, the Commission amended the complaint and
notice of investigation to add certain new respondents, including Orly
Shoe Corp. of New York, New York (``Orly''); Mould Industria de
Matrizes Ltda. d/b/a/Boaonda of Brazil (``Boaonda''); Dongguan Eastar
Footwear Enterprises Co., Ltd. of Guangzhou City, China (``Eastar'');
KGS Sourcing Ltd. of Hong Kong, China (``KGS''); Fujian Wanjiaxin
Industrial Developing, Inc. a/k/a Fujian Wanjiaxin Light Industrial
Developing, Inc. of Quanzhou City, China (``Wanjiaxin''); Jinjiang Anao
Footwear Co., Ltd. (``Anao''); Walmart Inc. of Bentonville, Arkansas
(``Walmart''); and Huizhou Xinshunzu Shoes Co., Ltd. of Huizhou City,
China (``Huizhou''), and to terminate the investigation with respect to
Crocsky, Hobibear, and Ink Tee. Order No. 30 (Oct. 21, 2021),
unreviewed by Comm'n Notice (Nov. 17, 2021).
The Commission subsequently terminated the investigation with
respect to various respondents on the basis of settlement agreements or
consent orders. See Order No. 12 (Aug. 11, 2021) (terminating
Skechers), unreviewed by Comm'n Notice (Aug. 24, 2021); Order No. 16
(Aug. 26, 2021) (SG Footwear) and Order No. 17 (Aug. 26, 2021) (Cape
Robbin), unreviewed by Comm'n Notice (Sept. 24, 2021); Order No. 20
(Sept. 1, 2021) (Dr. Leonard's), unreviewed by Comm'n Notice (Sept. 29,
2021); Order No. 22 (Sept. 9, 2021) (Fullbeauty) and Order No. 23
(Sept. 9, 2021) (Wild Diva), unreviewed by Comm'n Notice (Oct. 7,
2021); Order No. 24 (Sept. 17, 2021) (Fujian), unreviewed by Comm'n
Notice (Oct. 7, 2021); Order No. 25 (Sept. 22, 2021) (Yoki), unreviewed
by Comm'n Notice (Oct. 7, 2021); Order No. 26 (Sept. 28, 2021) (Akira),
unreviewed by Comm'n Notice (Oct. 27, 2021); Order No. 27 (Oct. 6,
2021) (Hawkins), unreviewed by Comm'n Notice (Oct. 29, 2021); Order No.
32 (Nov. 1, 2021) (Shoe-Nami) and Order No. 33 (Nov. 1, 2021) (PW),
unreviewed by Comm'n Notice (Nov. 29, 2021); Order No. 34 (Nov. 10,
2021) (718 Closeouts), unreviewed by Comm'n Notice (Dec. 6, 2021);
Order No. 39 (Jan. 11, 2022) (Eastar), unreviewed by Comm'n Notice
(Feb. 4, 2022); Order No. 46 (March 3, 2022) (Maxhouse, Wanjiaxin),
unreviewed by Comm'n Notice (March 18, 2022); Order No. 49 (March 15,
2022) (Boaonda), unreviewed by Comm'n Notice (April 1, 2022); Order No.
54 (April 22, 2022) (Royal Deluxe), unreviewed by Comm'n Notice (May
17, 2022); Order No. 56 (May 6, 2022) (Loeffler Randall), unreviewed by
Comm'n Notice (May 27, 2022); Order No. 81 (Sept. 28, 2022) (Walmart),
unreviewed by Comm'n Notice (Oct. 20, 2022). The Commission also
terminated the investigation with respect to KGS for good cause. Order
No. 40 (Feb. 1, 2022), unreviewed by Comm'n Notice (Feb. 22, 2022).
On June 10, 2022, the Commission found respondents La Modish, Star
Bay, Huizhou, and Anao (``Defaulting Respondents'') were in default and
waived their rights to appear, to be served with documents, and to
contest the allegations in this investigation, pursuant to 19 CFR
210.16(b), 210.17(h). Order No. 58 (May 20, 2022), unreviewed by Comm'n
notice (June 10, 2022).
On September 13-16, 2022, the ALJ held an evidentiary hearing. On
September 30, 2022, Crocs, OUII, and the participating respondents
(Orly, Hobby Lobby, and Amoji) filed their respective initial post-
hearing briefs. On October 7, 2022, the parties filed their post-
hearing reply briefs.
On January 9, 2023, the ALJ issued the subject ID finding no
violation of section 337 because: (1) Crocs failed to prove that any of
Respondents infringes the 3D Marks; (2) Crocs failed to prove that Orly
or Hobby Lobby infringes the Word Mark; (3) Crocs did not prove that
any of Respondents has falsely designated the origin (source) of their
accused products or caused unfair competition; (4) Crocs did not prove
that any of the Respondents diluted any of the Asserted Marks, either
by blurring or tarnishment; (5) the 3D Marks are invalid for lack of
secondary meaning; and (6) Crocs waived its infringement contentions
against Defaulting Respondents. ID at 71-72, 83-86, 148-49. The ID also
finds that Crocs has satisfied both the technical and economic prongs
of the domestic industry (``DI'') requirement, and it takes no position
on injury. Id. at 130, 149. The ID further finds that Respondents
failed to prove the 3D Marks are invalid as functional or the Word Mark
is invalid as generic, and it takes no position on Respondents' ``fair
use'' defense. Id. at 128-29, 149.
On January 23, 2023, Crocs filed a petition for review of the ID's
findings. On the same date, Respondents Orly and Hobby Lobby (``the
Orly Respondents'') filed a contingent petition for review of certain
findings should the Commission determine to review the ID. Amoji did
not join in the Orly Respondents' contingent petition for review or
file a petition of its own.
On January 31, 2023, Respondents Orly, Hobby Lobby, and Amoji filed
a joint response to Crocs' petition for review, and Crocs filed its
response to the Orly Respondents' contingent petition for review. On
the same date, OUII filed a response to both of the petitions for
review.
Having reviewed the record in this investigation, including the
final ID, the parties' petitions, and responses thereto, the Commission
has determined to review the ID in part with respect to the ID's
findings regarding: (1) Crocs's infringement contentions against the
lined versions of Orly's Gators were untimely and waived; (2) the 3D
Marks lack secondary meaning, including application of the presumption
of validity; (3) Crocs waived its infringement contentions with respect
to the Defaulting Respondents; (4) subject matter jurisdiction; (5)
likelihood of confusion; (6) false designation of origin; (7) dilution;
and (8) the technical and economic prongs of domestic industry. The
Commission has determined not to review the remaining findings in the
ID.
[[Page 21714]]
The parties are asked to provide additional briefing on the
following issues under review:
(A) Explain whether the evidence of record demonstrates that the
shoes that were allegedly the subject of Orly's first sale practiced
the 3D Marks in question, and whether they were the same as the Orly
``Gator'' shoes presently at issue. Explain whether Orly's sales
activities satisfies the requirements of a ``first sale'' in this
context and its implications for the presumption of validity of the
Asserted Marks and the burden of proof. Explain whether the evidence is
sufficient to overcome the presumption of validity, if applicable.
(B) Explain whether the infringement contention presented in Crocs'
pre-hearing and post-hearing briefs provided sufficient notice and
information that Crocs was accusing the lined version of the accused
Orly Gator products of infringement. Identify any significant, relevant
similarities or differences between the lined and unlined versions of
the Orly Gator products for purposes of infringement.
The parties are requested to brief only the discrete issues
identified above, with reference to the applicable law and evidentiary
record. The parties are not to brief any other issues on review, which
have already been adequately presented in the parties' previous
filings.
In connection with the final disposition of this investigation, the
statute authorizes issuance of: (1) an order that could result in the
exclusion of the subject articles from entry into the United States,
and/or (2) cease-and-desist orders that could result in the respondents
being required to cease and desist from engaging in unfair acts in the
importation and sale of such articles. Accordingly, the Commission is
interested in receiving written submissions that address the form of
remedy, if any, that should be ordered. If a party seeks exclusion of
an article from entry into the United States for purposes other than
entry for consumption, the party should so indicate and provide
information establishing that activities involving other types of entry
either are adversely affecting it or likely to do so. For background,
see Certain Devices for Connecting Computers via Telephone Lines, Inv.
No. 337-TA-360, USITC Pub. No. 2843, Comm'n Op. at 7-10 (December
1994).
The statute requires the Commission to consider the effects of any
remedy upon the public interest. The public interest factors the
Commission will consider include the effect that an exclusion order
and/or cease-and-desist order would have on: (1) the public health and
welfare; (2) competitive conditions in the U.S. economy; (3) U.S.
production of articles that are like or directly competitive with those
that are subject to investigation; and (4) U.S. consumers. The
Commission is therefore interested in receiving written submissions
that address the aforementioned public interest factors in the context
of this investigation.
If the Commission orders some form of remedy, the U.S. Trade
Representative, as delegated by the President, has 60 days to approve,
disapprove, or take no action on the Commission's action. See
Presidential Memorandum of July 21, 2005. 70 FR 43251 (July 26, 2005).
During this period, the subject articles would be entitled to enter the
United States under bond, in an amount determined by the Commission and
prescribed by the Secretary of the Treasury. The Commission is
therefore interested in receiving submissions concerning the amount of
the bond that should be imposed if a remedy is ordered.
Written Submissions: Parties to this investigation are requested to
file written submissions on the issues identified above in this notice.
In addition, the parties, interested government agencies, and any other
interested parties are requested to file written submissions on the
issues of remedy, the public interest, and bonding. Such initial
submissions should include views on the recommended determination by
the ALJ on remedy and bonding.
In its initial submission, Complainant is requested to identify the
remedy sought, and both Complainant and OUII are requested to submit
proposed remedial orders for the Commission's consideration.
Complainant is also requested to provide the HTSUS subheadings under
which the accused products are imported. Complainant is further
requested to supply the names of known importers of the Respondents'
products at issue in this investigation. Complainant is also requested
to identify and explain, from the record, articles that it contends are
``packaging of'' the subject products, and thus potentially covered by
the proposed remedial orders, if imported separately from the subject
products. See 86 FR 36303-304. Failure to provide this information may
result in waiver of any remedy directed to ``packaging of'' the subject
products, in the event any violation may be found.
The parties' written submissions and proposed remedial orders must
be filed no later than the close of business on April 19, 2023. Reply
submissions must be filed no later than the close of business on April
26, 2023. Opening submissions are limited to 50 pages. Reply
submissions are limited to 30 pages. No further submissions on any of
these issues will be permitted unless otherwise ordered by the
Commission.
Persons filing written submissions must file the original document
electronically on or before the deadlines stated above. The
Commission's paper filing requirements in 19 CFR 210.4(f) are currently
waived. 85 FR 15798 (Mar. 19, 2020). Submissions should refer to the
investigation number (``Inv. No. 337-TA-1270'') in a prominent place on
the cover page and/or first page. (See Handbook for Electronic Filing
Procedures, <a href="https://www.usitc.gov/documents/handbook_on_filing_procedures.pdf">https://www.usitc.gov/documents/handbook_on_filing_procedures.pdf</a>.). Persons with questions regarding
filing should contact the Secretary (202-205-2000).
Any person desiring to submit a document to the Commission in
confidence must request confidential treatment by marking each document
with a header indicating that the document contains confidential
information. This marking will be deemed to satisfy the request
procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b)
& 210.5(e)(2)). Documents for which confidential treatment by the
Commission is properly sought will be treated accordingly. All
information, including confidential business information and documents
for which confidential treatment is properly sought, submitted to the
Commission for purposes of this Investigation may be disclosed to and
used: (i) By the Commission, its employees and Offices, and contract
personnel (a) for developing or maintaining the records of this or a
related proceeding, or (b) in internal investigations, audits, reviews,
and evaluations relating to the programs, personnel, and operations of
the Commission including under 5 U.S.C. Appendix 3; or (ii) by U.S.
government employees and contract personnel, solely for cybersecurity
purposes. All contract personnel will sign appropriate nondisclosure
agreements. All non-confidential written submissions will be available
for public inspection at the Office of the Secretary and on EDIS.
The Commission vote for this determination took place on April 5,
2023.
The authority for the Commission's determination is contained in
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and
in Part 210 of the Commission's Rules of
[[Page 21715]]
Practice and Procedure (19 CFR part 210).
By order of the Commission.
Issued: April 5, 2023.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2023-07530 Filed 4-10-23; 8:45 am]
BILLING CODE 7020-02-P
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