WASHINGTON — Wal-Mart Stores Inc., one of several companies targeted by Converse Inc. in a trademark infringement claim pending before the U.S. International Trade Commission, accused Converse in a filing of trying to “extort monetary settlements” from a large swath of the industry and vowed to vigorously fight the case.
“Converse’s sudden launch of this surprise ITC action against the industry and its use of this forum to extort monetary settlements and drive product out of the market must not continue to be permitted,” Wal-Mart said in a response to a motion filed by Converse, according to ITC documents. “Wal-Mart will fight Converse’s anticompetitive actions to preserve ‘Every Day Low Prices’ for Wal-Mart customers.”
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Converse, owned by Nike Inc., filed an ITC trademark infringement complaint against 32 retailers and manufacturers in October, alleging they infringed on some of the brand’s trademarks used in certain shoes, including the All Star Chuck Taylor shoe. The ITC initiated an investigation against the companies in November. Converse also filed lawsuits in federal court against the companies.
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In the ITC complaint, Converse alleged that the companies 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.
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 first 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.
Wal-Mart charged that toe caps, toe bumpers and stripes are “actually or aesthetically functional” and thus are not subject to trademark protection.
“Trademark rights derive from exclusive use of a word, symbol or nonfunctional design that signifies the source of a product and distinguishes it from products offered by other companies,” Wal-Mart stated. “Converse has not had exclusive use of the toe cap, toe bumper or midsole striping for at least 50 years, if ever. Converse has been well aware of the use by other companies of these features.”
Several companies, including Tory Burch, Aldo 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.
Wal-Mart also asserted that Converse has long recognized there are many other brands that utilize some of the “generic” styles of canvas sneakers used in its own shoe, claiming that Converse has “long known it lacks exclusive use and exclusive rights.”
Despite that knowledge, Wal-Mart said Converse filed a sworn declaration with the U.S. Patent and Trademark Office in August 2012 stating it has “substantially exclusive” use of those features and then sued more than 30 companies, which Wal-Mart claimed is further proof that Converse cannot show exclusive use or prevail.
Converse did not respond to a request for comment.