[Federal Register Volume 88, Number 181 (Wednesday, September 20, 2023)]
[Notices]
[Pages 64926-64928]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20345]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1270]


Certain Casual Footwear and Packaging Thereof; Notice of Final 
Determination of No Violation by Active Respondents; Issuance of 
Default Remedial Orders; Termination of Investigation

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 that there is no violation 
of section 337 of the Tariff Act of 1930, as amended, in this 
investigation by active respondents Hobby Lobby Stores, Inc. (``Hobby 
Lobby''), Quanzhou ZhengDe Network Corp. d/b/a Amoji (``Amoji''), and 
Orly Shoe Corp. (``Orly''). The Commission has further determined to 
issue a limited exclusion order (``LEO'') against defaulting 
respondents La Modish Boutique (``La Modish''), Star Bay Group Inc. 
(``Star Bay''), Huizhou Xinshunzu Shoes Co., Ltd. (``Huizhou''), and 
Jinjiang Anao Footwear Co., Ltd. (``Anao'') and cease and desist orders 
against defaulting respondents La Modish and Star Bay. This 
investigation is hereby terminated.

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 https://edis.usitc.gov. For help accessing EDIS, please email 
<a href="/cdn-cgi/l/email-protection#1f5a5b564c2c577a736f5f6a6c766b7c31787069"><span class="__cf_email__" data-cfemail="783d3c312b4b301d1408380d0b110c1b561f170e">[email protected]</span></a>. General information concerning the Commission may 
also be obtained by accessing its internet server at https://www.usitc.gov. 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 of Oklahoma City, Oklahoma; Amoji 
of Quanzhou, Fujian Province, China; 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 of 
West Covina, California; Loeffler Randall Inc. of New York, New York 
(``Loeffler Randall''); Star Bay of Hackensack, New Jersey; and Royal 
Deluxe Accessories, LLC of New Providence, New Jersey (``Royal 
Deluxe''). The Office of Unfair Import Investigations (``OUII'') was 
also named as a party.

[[Page 64927]]

    On November 17, 2021, the Commission amended the complaint and 
notice of investigation to add certain new respondents, including Orly 
of New York, New York; 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''); Anao of Jinjiang City, China; Walmart Inc. of 
Bentonville, Arkansas (``Walmart''); and Huizhou of Huizhou City, 
China, 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) (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 that 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). Order No. 58 (May 20, 2022), unreviewed by Comm'n Notice 
(June 10, 2022).
    On September 13-16, 2022, the presiding administrative law judge 
(``ALJ'') held an evidentiary hearing with Crocs, OUII, and the 
remaining respondents Orly, Hobby Lobby (collectively, ``the Orly 
Respondents''), and Amoji (all collectively, ``Respondents'').
    On January 9, 2023, the ALJ issued the subject final ID, finding no 
violation of section 337 because: (1) Crocs did not prove that 
Respondents infringe the Asserted Marks; (2) Crocs did not prove that 
Respondents falsely designate the origin of their accused products or 
cause unfair competition; (3) Crocs did not prove that Respondents 
dilute the Asserted Marks by blurring or tarnishment; (4) the 3D Marks 
are invalid for lack of secondary meaning; and (5) 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 requirement. Id. 
at 130, 149. The ID further finds that Respondents failed to prove that 
the 3D Marks are invalid as functional or that the Word Mark is invalid 
as generic. Id. at 128-29, 149. The ID takes no position on Crocs's 
alleged injury or Respondents' fair use defense. Id. at 129-30.
    On January 13, 2023, the Commission issued a notice soliciting 
submissions from the public on the public interest implications of any 
remedial orders the Commission may issue in this case. 88 FR 3437 (Jan. 
19, 2023). On February 9, 2023, non-party Joybees, LLC, a U.S. seller 
of footwear, filed a statement opposing issuance of a general exclusion 
order, (``GEO''). EDIS Doc. ID 790010 (Feb. 9, 2023). The Commission 
also received a letter dated June 14, 2023, from U.S. Representative 
Brittany Pettersen (CO-7), who represents the congressional district in 
which Crocs in headquartered. EDIS Doc. ID 798554 (June 14, 2023).
    On April 5, 2023, the Commission determined to review the ID's 
findings that: (1) Crocs waived its infringement contentions against 
the lined version of Orly's Gators; (2) the 3D Marks are not entitled 
to the presumption of validity and are invalid for lack of secondary 
meaning; (3) Crocs waived its infringement contentions against 
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. Comm'n Notice 
at 3-4 (Apr. 5, 2023); 88 FR 21712-15 (Apr. 11, 2023). The Commission 
determined not to review the remaining findings in the ID.
    On April 19, 2023, Crocs, the Orly Respondents, and OUII filed 
their responses to the Commission's notice of review. On April 26, 
2023, the parties filed their respective replies. Amoji did not file 
its own response or join the briefing by the Orly Respondents.
    Having reviewed the ID, the parties' submissions, and the evidence 
of record, the Commission has determined to affirm and adopt the ID's 
findings that Respondents have not infringed or diluted any of the 
Asserted Marks, falsely designated the origin of their Accused 
Products, or engaged in unfair competition. The Commission has 
determined to reverse the ID's finding that Crocs waived its 
infringement contentions with respect to the lined versions of the 
accused Orly Gators and find instead that Crocs failed to prove 
infringement by the lined Orly Gators.
    The Commission takes no position on Orly's alleged first sale in 
April 2016, the presumption of validity, secondary meaning, injury, 
fair use, and the technical and economic prongs of the domestic 
industry requirement.
    The Commission has further determined to issue an LEO to Defaulting 
Respondents and CDOs to defaulting respondents La Modish and Star Bay 
pursuant to section 337(g)(1). 19 U.S.C. 1337(g)(1).
    The Commission's reasoning in support of its determinations is set 
forth more fully in its opinion issued herewith. Commissioner Kearns 
dissents from the Commission's finding of no violation of section 337 
for the reasons detailed in his dissenting views issued herewith.
    The investigation is hereby terminated.
    The Commission vote for this determination took place on September 
14, 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 Practice and Procedure (19 CFR 
part 210).


[[Page 64928]]


    By order of the Commission.

    Issued: September 14, 2023.
Katherine Hiner,
Supervisory Attorney.
[FR Doc. 2023-20345 Filed 9-19-23; 8:45 am]
BILLING CODE 7020-02-P


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