Last Minute IP Speaking Event

For those that will be around Seattle this Friday, March 27th, I will be speaking at the Seattle Angels Meetup Group’s Pitch & Demo Night on IP protection for start-ups and entrepreneurs. It will be from 4:00-7:00 P.M at the Good Bar in Pioneer Square. Regardless of your interest in IP, it should be a good networking event for entrepreneurs or anyone working at a start-up.

Hope to see you there!

Presentation on Cross Border IP Protection for U.S. and Canadian Businesses

For those interested in U.S. and Canadian IP protection issues, I will be giving a presentation at the April 2, 2015 King County Bar Association (KCBA) – Intellectual Property Section meeting in Seattle, Washington on U.S. and Canadian cross-border IP protection issues. Particularly, the presentation will cover IP protection issues that U.S. businesses should consider as they expand into Canada, and conversely, IP issues Canadian businesses should consider as they enter the U.S. market.

The April 2nd KCBA IP Section meeting will be held at KCBA’s headquarters at 1200 Fifth Avenue, Suite 700, Seattle, Washington 98101. A webcast of the meeting will be made available to KCBA IP Section members. Further details on the webcast are available here.

Hope you can make it!

USTR Releases Annual Out of Cycle Review of Notorious Markets

It is that time of year again when the Office of the U.S. Trade Representative (USTR) releases its annual report on Notorious Markets—The 2014 Out-of-Cycle Review of Notorious Markets. As we reported on last year, this annual review identifies foreign physical and online markets reported by U.S. businesses and industry organizations as being engaged in substantial IP piracy and counterfeiting.

This year’s review identified several foreign social media and file transferring websites, as well as a number of Internet service providers (ISPs), as being notorious markets including those hosted or located in Argentina, the British Virgin Islands, Canada, China, Czech Republic, France, Netherlands, Panama, Philippines, Poland, Russia, San Marino, Spain, Switzerland, Ukraine, the United Kingdom and Vietnam. Additionally, physical markets in Argentina, Brazil, China, Ecuador, India, Indonesia, Mexico, Nigeria, Paraguay, Thailand and Uruguay were also identified as being notorious markets.

The USTR also highlighted a number of recent developments including efforts by certain previously listed Chinese sites to curb piracy activities on their websites, as well as increased enforcement actions by rights holders and government officials to shut down physical and online markets in Brazil, the European Union and Ukraine among others.

What’s The Takeaway? As we have said before, every foreign market has its own IP protection challenges. U.S. businesses that operate abroad or are expanding into new markets should review the USTR’s 2014 Out of Cycle Review of Notorious Markets to help evaluate the IP protection risks associated with particular markets they wish to enter. Doing so can help to ensure that such businesses can better protect their IP assets abroad.

Recap to Online Copyright and Trademark Enforcement in the U.S. and Abroad

For those who did not have a chance to attend my January 20, 2015 presentation Online Copyright and Trademark Enforcement in the U.S. and Abroad, the Washington State Bar Association International Practice Section’s Blog, The Global Gavel, has provided a summary of my presentation. It overviews the main issues discussed and key takeaway points. Those with further questions should feel free to contact me.

A link to the presentation summary can found here.

UK IP Office Releases Report on Online Copyright Enforcement Across Markets

The United Kingdom Intellectual Property Office (UK IPO) released a report today providing a comprehensive and insightful breakdown of online copyright enforcement regimes in multiple countries. Titled International Comparison of Approaches to Online Copyright Infringement, the report evaluates online enforcement regimes in many of the world’s major markets including Brazil, Canada, France, Italy, The Netherlands, South Korea, Spain, the U.K., and the U.S. Beyond providing in-depth details and statistics on each country’s online enforcement procedures that international IP policy nerds like myself find interesting, the report highlights how each country’s enforcement regimes have dealt with the proliferation of broadband Internet and various online media services. It is also a good primer for practitioners to understand online copyright enforcement procedures across borders. Give it a read!

Recent U.S. Case Highlights Important Role Licensees Have in Cross-Border Trademark Enforcement

The New York Times and other news outlets reported last week that The Hershey Company, the global confectionary behemoth, settled its U.S. federal trademark lawsuit against leading U.S. importer of British confectionery products, LBB Imports, LLC (Case 1:14-cv-01655-JEJ), who had allegedly infringed Hershey’s own trademark-protected brands, as well as those it has exclusively licensed, through LBB’s unauthorized importation of popular UK brands and UK versions of existing U.S. brands including CADBURY DAIRY MILK, CARAMELLOTOFFEE CRISPYORKIE, MALTESERS, ROLO and KIT KAT.

Although these news reports have largely focused on U.S. consumer dissatisfaction over inaccessibility of these UK chocolate varieties as a result of the settlement, this case also underscores the important role trademark licensees have in the cross-border enforcement of their licensed trademarks. Hershey attested in their complaint that it has produced and promoted Cadbury’s brands in the U.S. for over 25 years, and that it is Cadbury’s exclusive U.S. licensee of several of its U.S. registered trademarks including Cadbury’s logo (U.S. Reg. No. 1,107,458) and its DAIRY MILK brand (U.S. Reg. Nos. 1,403,327, 4,224,494 and 1,460,259) (collectively, the Cadbury Marks).

While it is unclear what contractual obligations Hershey had with Cadbury concerning enforcement of the Cadbury Marks in the U.S., in regards to infringing imports or otherwise, Hershey likely had substantial legal and business incentives to enforce the Cadbury Marks against LBB. Often, foreign distributors, manufacturers, and promoters have licensed rights, and in many cases, contractual obligations, to enforce rights in their licensed trademarks including preventing the importation of infringing goods and parallel importation shipments (aka grey goods). Beyond legal obligations, licensees like Hershey have financial incentives to enforce their licensed trademarks rights as it is often necessary to protect business opportunities, as well as relationships, that accompany cross-border licensing arrangements.

As these licensed rights and obligations have substantial legal and business implications, it is important for licensing businesses to know and understand such rights and obligations, and develop enforcement strategies based on the same. So how do licensees do this? Well, here are a few things licensees should consider:

Evaluate and Understand Contractual Rights and Obligations. The first and most important thing a licensee should do when entering a cross-border licensing arrangement and considering enforcement measures based on that arrangement is to evaluate and understand their rights and obligations of enforcement. This requires that a licensee read and evaluate whatever agreement(s) acknowledge their licensing arrangement to identify such rights and obligations. Such rights and obligations may be detailed in a stand-alone trademark licensing agreement, they may be included in a more comprehensive distribution or service agreement, or they may be covered multiple agreements.

Regardless of what type of agreement(s) such rights and obligations are acknowledged, licensees need to identify three things:

(1) their rights to enforce rights in licensed mark(s);
(2) their obligations to enforce rights in licensed mark(s); and
(3) the extent and territoriality of such rights and obligations.

Licensed rights include a licensee’s optional ability to enforce rights in licensed mark(s), while obligations are a licensee’s contractual duty to enforce rights such mark(s). The extent and territoriality of such rights and obligations is particular important in cross-border IP protection as it is needed for a licensee to establish both the subject and geographic scope of their rights and obligations. In Hershey’s case, being Cadbury’s exclusive U.S. licensee of the Cadbury Marks likely gave Hershey rights and obligations of enforcement for such Marks in the U.S. However, Hershey was likely not given rights of enforcement for all Cadbury brands, nor rights of enforcement for the Cadbury Marks outside the U.S. as Hershey is identified as having only licensed certain Cadbury brand lines, and only in the U.S.

In any instance, a licensee needs to know their licensed rights and obligations, as well as its scope and territoriality.

Develop Tailored Strategies to Fulfill Licensing Obligations. Once particular licensed enforcement rights and obligations are identified, a licensee must evaluate what such obligations mean for their business. If a licensee is obligated to enforce rights in licensed mark(s) under their particular licensing arrangement, they may be required to monitor use of the marks in commerce, register (aka prosecute) the marks with national trademark authorities, record trademark registration(s) with national customs agencies to monitor and detain infringing imports, and/or conduct litigation enforcement.

In Hershey’s case, Cadbury had already registered the Cadbury Marks with the U.S. Patent and Trademark Office, and it remains unclear what Hershey’s obligations were under their licensing agreement(s) with Cadbury to record such registrations, monitor commercial use of the Marks, or even litigate their rights against potential infringers such as LBB. However, if Hershey’s did have monitoring and enforcement obligations in their licensing agreement(s) with Cadbury, their lawsuit against LBB would likely have been fulfilling these obligations as Hershey went after an allegedly unauthorized importer of Cadbury’s brands in the U.S., which it would have not otherwise known without attaining monitoring services and potentially other enforcement measures.

In short, licensees, like Hershey, have to find ways to fulfill their licensing obligations that are tailored to their particular obligations and business. As such, licensees should establish a budget to conduct such enforcement services, and consider retaining qualified counsel to ensure effective execution of obligated enforcement activities.

Consider Business Implications of Optional Licensed Rights. A licensee’s fulfilling of their licensed legal obligations is relatively straightforward, yet determining when and how to enforce licensed optional rights of enforcement is more complex, and often has more business than legal implications. Although a licensee may have optional rights of enforcement, the nature of the licensing arrangement and business relationships may obligate a licensee to adopt trademark enforcement measures. This is because the success of a licensing arrangement often depends on a licensee’s exclusive use of their licensed mark(s) in a particular country, requiring enforcement measures if such exclusivity is jeopardized. Further, licensors often urge their foreign licensees to enforce their licensed trademark rights regardless of contractual obligations, making such acts the basis for continuing their licensing arrangements. As such, a licensee may wish to adopt enforcement measures for their licensed marks despite having no obligations to do so to ensure profitability and continuation of their licensing arrangement, and to protect their existing business relationship with their licensor.

In Hershey’s case, they have been Cadbury’s exclusive U.S. licensee of the Cadbury Marks for over 25 years. Even if their rights of enforcement were optional, Hershey likely had substantial incentive to enforce rights in the Cadbury Marks as LBB’s imports jeopardized their exclusive use of such brands, and Hershey’s failure to enforce such rights may have harmed their long existing relationship with Cadbury.

Like Hershey, any licensee with optional rights of enforcement needs to consider the impact of non-enforcement on the business opportunities available in their licensing arrangement, as well as its impact on their relationship with their licensor.

What’s The Takeaway? As more and more businesses seek local foreign businesses to assist them with promoting their brands abroad, licensee businesses will be increasingly required to understand what rights and obligations they have in their trademark arrangements, and what measures they should take to fulfill those obligations, especially in deterring infringing imports. As these enforcement rights and obligations have substantial legal and business implications, licensees should work with their licensors and qualified counsel to determine how to best fulfill their enforcement obligations.

Breaking Down Australia’s Injunctive Online Copyright Enforcement Reforms

As this year comes to a close, I posted my last posting on The IPKat as a guest contributor about updates to Australia’s proposed injunctive online copyright enforcement reforms. This posting discussed recent updates to a blog posting I made on this blog in August concerning these proposed reforms. Particularly, I highlighted recent implementation and freedom of speech concerns about the proposed reforms.

The IPKat posting is available here.

Online Copyright and Trademark Enforcement Seminar

Wanted to let you all know that I will be speaking on cross-border online copyright and trademark enforcement at a Washington State Bar Association – International Practice Section seminar on January 20, 2015 at Noon at Davis Wright Tremaine LLP in Seattle, Washington.

Titled Online Copyright and Trademark Enforcement in the U.S. and Abroad, the seminar will cover issues in obtaining cross-border protection for copyrighted works and trademarks, understanding copyright and trademark enforcement systems in the U.S. and other jurisdictions, and using copyright and trademark enforcement measures on major online social media and retail sites such as Google, Facebook, Amazon, Baidu and others.

Further information on attending the seminar can be found here.

Hope you can make it. It should be fun!

Part IV: Enforcing Online Copyright Protection Abroad: North and Central America

I come back to you again with part IV of my plan to cover online copyright enforcement procedures throughout the world—this time North and Central America. Although several Central American countries agreed to adopt notice and takedown procedures under the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA; U.S., Costa Rica, Dominican Republic, El Salvador, Honduras, Guatemala, and Nicaragua), such countries are at varying levels of adopting such provisions.

Determining whether owners or rights holders of a copyright-protected work (collectively, “Rights Holders”) can enforce rights in their work online and abroad depends on multiple factors. This includes: (1) whether a work qualifies for foreign protection (aka national treatment) under the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) and/or the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS); (2) whether the Internet service provider (ISP) hosting the infringing use of the work is subject to jurisdiction in the country where online enforcement is sought; and (3) what online copyright enforcement procedures are available in the country of enforcement.

Each of these issues have been previously examined here and those with further questions should consult with a qualified attorney.

Below are the current online copyright enforcement procedures in each North and Central American country. However, a couple of preliminary notes:

Classifications: A North and Central American country that maintains legal protocols for a Rights Holder to directly petition an ISP to remove infringing content in order for the ISP to qualify for safe harbor protection from contributory liability for copyright infringement is identified below as a “Notice and Takedown System” country. A country that maintain systems that simply require ISPs to notify infringing subscribers of their allegedly infringing acts without removal requirements for safe harbor protection are identified as a “Notice and Notice System” country. A country that does not provide legal provisions for a Rights Holder to directly enforce their copyright protections through an ISP notification system, and are instead forced to seek copyright enforcement through that country’s judicial system are referred to as a “Judicial System” country.

Notice Limitations: Unfortunately, even if a country listed below maintains a Notice and Takedown System, an ISP may still refuse to disable access to an allegedly infringing website or website content upon receipt of a Rights Holder’s infringement notice. In such instances, a Rights Holder may be forced to seek enforcement through that foreign country’s legal system in order to remove such online content.

Time Sensitivity: As several of the listed countries in this posting are evaluating or are in the process of implementing copyright reforms, either through legislation or judicial action, there is the possibility that the following online copyright enforcement information may soon change.

United States

Enforcement System: Notice and Takedown System

Berne Convention Member: Yes

Overview and Notes: The Digital Millennium Copyright Act establishes the notice and takedown procedure for a Rights Holder to inform ISPs of infringing content. Once a ISP has received a Rights Holder’s notice, an ISP has to prevent access to such infringing content in order to qualify for safe harbor protection from contributory copyright infringement. The U.S. has pushed for such  requirements to be implemented in a number of countries to whom its has concluded free trade agreements (FTAs) including Australia, Colombia, Peru, DR-CAFTA, and others.

Governing Legislation: Digital Millennium Copyright Act (17 U.S.C. § 512(c)(3)(A))

Notice Requirements:

-Identification of the copyrighted work(s) claimed to have been infringed;
-Identification of the online material that is claimed to be infringing and wished to be removed or disabled, including any reasonable information that would allow an ISP to locate the material (i.e. website addresses);
-Information reasonably sufficient to permit the ISP to contact the Rights Holder (address, telephone number, e-mail, etc.);
-A statement that the Rights Holder has a good faith belief that the use of their content in the identified online material is not authorized by the copyright owner, its agent, or the law;
-A statement that the information provided in the notice is accurate, and under penalty of perjury, that the Rights Holder is authorized to act on behalf of the Rights Holder of an exclusive right that is allegedly infringed; and
-A Rights Holder’s physical or electronic signature.

Belize

Enforcement System: Judicial System

Berne Convention Member: Yes

Overview and Notes: Belize does not currently provide any legal incentives or procedures for ISPs to remove hosted infringing content upon notice from Rights Holders.

Governing Legislation: Copyright Act – Cap. 252

Notice Requirements: N/A

Canada

Enforcement System: Notice and Notice System

Berne Convention Member: Yes

Overview and Notes: Canada adopted the Copyright Modernization Act in June 2012, which included a formal notice and notice system. Although the adoption of such a system provides some means for Rights Holders to directly enforce rights in their works, the International Intellectual Property Alliance (IIPA) had questioned whether Canada’s notice and notice system provides sufficient legal incentives for Canada-based ISPs to removing infringing content upon request, and ultimately whether it is an effective means for Rights Holders to directly enforce rights in their works.

It is important to note that Canada may soon be required to implement notice and takedown provisions if the Trans Pacific Partnership (TPP) is finalized and the U.S. draft chapter is adopted in a final TPP agreement.

Governing Legislation: Section 41.25-41.27, Copyright Modernization ActCopyright Act.

Notice Requirements:

-Must be in writing;
-The Rights Holder’s name, address and other relevant communication information;
-Identify the work or other subject-matter to which the claimed infringement relates;
-State the Rights Holder’s interest or right to the work or other subject-matter;
-Specify the online location where the claimed infringement occurs;
-Specify the claimed infringement;
-Specify the date and time of the claimed infringement; and
-Provide any other information or as provided by other Canadian regulations.

Costa Rica

Enforcement System: Notice and Notice System (Minimal)

Berne Convention Member: Yes

Overview and Notes: Costa Rica is a DR-CAFTA signatory country, yet it has not fully adopted notice and takedown provisions as provided under Ch. 15, Section 15.11.27(ix) of the agreement. In 2011, Costa Rica adopt notice and notice provisions in Decree No. 36,880 COMEX-JP. However, the IIPA has criticized these legislative reforms as the Decree only mandates that an ISP notify an infringing subscriber of their alleged infringing act upon notice from a Rights Holder, and that such notification only needs to be communicated to the subscriber in question within 45 days of a Rights Holder’s notification to an ISP.

Governing Legislation: Law No. 8863 on Copyright and Related Rights, Decree No. 36,880 COMEX-JP

Notice Requirements (derived from an unofficial translation):

-Expressly and accurately identify the rights allegedly infringed;
-Provide an in-country address or location to receive notifications concerning the notice;
-Identify the infringing material and its online location; and
-Provide other accurate and timely information to enable the ISP to fully identify the subscriber or supplier of the allegedly infringing material.

El Salvador

Enforcement System: Notice and Takedown System

Berne Convention Member: Yes

Overview and Notes: El Salvador is a DR-CAFTA signatory country, mandating that it adopt notice and takedown provisions detailed under Ch. 15, Section 15.11.27(ix) of the agreement. In 2005, El Salvador passed copyright legislative reforms under Legislative Decree No. 912 that included the adoption of notice and takedown provisions, granting ISPs safe harbor for contributory liability for copyright infringement by acting on a notice of alleged infringement from Rights Holders. However, Decree No. 912 provided no specific notice requirements.

Governing Legislation: Law on the Promotion and Protection of Intellectual Property Rights as amended by Legislative Decree No. 912

Notice Requirements: Unspecified

Guatemala

Enforcement System: Judicial System

Berne Convention Member: Yes

Overview and Notes: Guatemala is a DR-CAFTA signatory country, mandating that it adopt notice and takedown provisions detailed under Ch. 15, Section 15.11.27(ix) of the agreement. However, Guatemala has not passed any legislative reforms to adopt notice and takedown provisions, and it does not currently appear to provide any express legal incentives or procedures for ISPs to remove hosted infringing content upon notification from Rights Holders.

Governing Legislation: Law on Copyright and Related Rights and Regulations Under the Law on Copyrights and Related Rights

Notice Requirements: N/A

Honduras

Enforcement System: Judicial System

Berne Convention Member: Yes

Overview and Notes: Honduras is a DR-CAFTA signatory country, mandating that it adopt notice and takedown provisions detailed under Ch. 15, Section 15.11.27(ix) of the agreement. However, Honduras has not passed any legislative reforms to adopt notice and takedown provisions, and it does not currently appear to provide any express legal incentives or procedures for ISPs to remove hosted infringing content upon notification from Rights Holders.

Governing Legislation: Copyright and Neighboring Rights Law

Notice requirements: N/A

Mexico

Enforcement System: Judicial System

Berne Convention Member: Yes

Overview and Notes: Mexico does not currently appear to provide any legal incentives or procedures for ISPs to remove hosted infringing content upon notification from Rights Holders.

However, Mexico may soon be required to implement notice and takedown provisions or notice and notice provisions if the Trans Pacific Partnership (TPP) is finalized and it includes such provisions as has been proposed.

Governing Legislation: Federal Law on Copyright

Notice Requirements: N/A

Nicaragua

Enforcement System: Judicial System

Berne Convention Member: Yes

Overview and Notes: Nicaragua is a DR-CAFTA signatory country, obligating that it adopt notice and takedown provisions mandated under Ch. 15, Section 15.11.27(ix) of the agreement. However, Nicaragua has not passed any legislative reforms to adopt notice and takedown provisions, and it does not currently appear to provide any express legal incentives or procedures for ISPs to remove hosted infringing content upon notification from Rights Holders.

Governing Legislation: Law of Copyright and Neighboring Rights, Law on Amendments and Additions to Law of Copyright and Neighboring Rights (Law No. 577 of 2006)

Notice Requirements: N/A

Panama

Enforcement System: Judicial System

Berne Convention Member: Yes

Overview and Notes: Panama ratified a FTA with the U.S. (U.S.-Panama FTA) that mandated under Ch. 15.11, Article 15.11, Section 27(a) of the agreement that Panama adopt “legal incentives for service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.” However, Panama does not appear to have adopted any such “incentives” through a notice and takedown system or a notice and notice system.

Governing Legislation: Law No. 64 on Copyright and Neighboring Rights

Notice Requirements: N/A

Parting Notes: As I have mentioned in previous posts, it is important to note that there are issues to consider after a takedown notice has been submitted. First, an alleged infringer may respond to a Rights Holder notification by submitting a counter notice attesting to their rights in a protected work, even after their online content or website has been blocked or removed. Also, an ISP may refuse to act after a takedown notice has been submitted. If these circumstances arise, one should consider contacting a qualified attorney to discuss further actions. Good luck!

Special thanks to Sara Parker, recent Seattle University School of Law graduate and new member of the Washington State Bar for her assistance.

Converse Seeks to Prove it is the One and Only Global All-Star

Co-author Peter Dang, recent graduate of the University of Washington School of Law and admitted member of the Washington State bar.

Imitation may be the sincerest form of flattery, but try telling that to Converse. Last month, Converse filed multiple lawsuits in the U.S. District Court for the Eastern District of New York against 31 alleged infringers including Sketchers, H&M and others, for importing and selling knockoffs of Converse’s iconic shoes, the Chuck Taylor. Converse claimed that such alleged infringers infringed the Chuck Taylor’s distinctive shoe designs (aka trade dress) (15 U.S.C. § 1114), diluted such trade dress’ distinctiveness (15 U.S.C. § 1125(c)), and used such trade dress in a manner that constituted unfair competition (15 U.S.C. § 1125(a)). The trade dress at issue in both cases consists of Chuck Taylor’s federally registered “midsole design” and “outsole design” (collectively, the “Designs”). The midsole design (Reg. No. 4,398,753 – see image above) refers specifically to the Chuck Taylor’s “toe bumper” and “toe cap,” while the outsole design (Reg. No. 1,588,960) refers to the distinct diamond pattern on the sole of the shoe.

Simultaneously to filing its federal lawsuits, Converse filed a parallel complaint at the International Trade Commission (ITC) against the same alleged infringers for unfair trade practices (19 U.S.C. §1337 et seq.) related to importing shoes that infringed the Designs.

So why are these cases important? Beyond the large amount of potential financial recovery at stake, the outcome of these proceedings will have strong implications for cross-border trademark protection. Converse’s victory in its federal lawsuits may provide greater means for U.S. and foreign retail product producers to protect their products’ designs from unauthorized use in the U.S. by potentially expanding U.S. legal protections afforded to clothing and footwear trade dress. Further, an ITC ruling in Converse’s favor provides Converse the means to not only prevent the infringement of their trade dress, it also helps to stem the cross-border flow of shoes infringing their Designs.

Converse’s Challenges

Commentators have reported that Converse faces challenges in its actions because the Designs’ elements may be considered functional, and thus not protectable. Under U.S. trademark law, only distinctive non-functional elements of trade dress are protectable. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 775 (1992). Since the Designs’ rubber toe bumper and cap, and outside design are arguably used to prevent wear and provide foot protection, they may be considered functional elements of the Chuck Taylor, and thus unprotectable.

In contrast, others believe that footwear trade dress precedent may give Converse the legal basis it needs to succeed in such actions through the Designs’ potential secondary meaning. In Christian Louboutin, S.A. v. Yves Saint Laurent Am. Holding, Inc., 2012 WL 3832285 (2nd Cir. 2012), the Court found that Louboutin’s iconic red sole of its luxury women’s shoe to be distinctive despite being a element of the shoe’s sole due to secondary meaning (aka acquired distinctiveness) that the sole had acquired amongst the general public, thereby granting Louboutin trade dress protection to its shoe’s red sole. As the Chuck Taylor shoes have been widely available in U.S. commerce for decades, Converse may be able to establish that the Designs acquired secondary meaning amongst the U.S. public, and are thus protectable despite their apparent functionality.

Impact of the ITC Action

Although Converse’s victories in its federal court actions would likely result in substantial financial recovery for Converse, a favorable ITC decision would arguably provide Converse greater cross-border benefits. The ITC provides rights holders of U.S. patent, trademark and copyright rights the means to petition the U.S. government under Section 337 of the 1930 Tariff Act to conduct an investigation of unfair trade practices, including the importation of goods infringing such U.S. IP rights. If such infringing importation is found, the ITC may issue a ban on such infringing imports. In Converse’s case, an ITC issued ban would prevent the alleged infringers’ importation of footwear utilizing the Designs into the U.S., and potentially deter transshipments of such footwear to other markets from the U.S. As such a ITC decision impacts the importation and exportation of shoes infringing the Designs, it arguably has more cross-border benefits as it could effectively provide Converse trademark protection across multiple markets through one legal action.

What’s The Takeaway?

If successful in both its federal and ITC actions, Converse may obtain substantial financial recovery and injunctive relief to prevent imitators from selling their shoe designs in the U.S. and potentially other markets. More broadly, a favorable ITC ruling for Converse would provide Converse the tools to protect its Designs and control the flow of goods infringing such Designs across markets, a strategy that commentators have reported is overlooked, but has the potential to provide enhanced cross-border trademark protections.