While Ralph Lauren, H&M, Zulily, Aldo and Tory Burch were quick to settle the lawsuits that were filed against them by Converse in October 2014, in which the iconic sneaker brand alleged trade dress infringement of its protected footwear designs, Wal-Mart is not going down without a fight. In fact, the discount retail behemoth has responded to the lawsuit Converse filed with the U.S. International Trade Commission ("ITC") by accusing Converse of trying to “extort monetary settlements” from a large group of the brands. Instead of quietly settling and paying what certainly amounts to a nominal sum for the billionaire company, Wal-Mart has vowed to "vigorously fight" the case.
According to a recently filed response, Wal-Mart claims: “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 will fight Converse’s anticompetitive actions to preserve ‘Every Day Low Prices’ for Wal-Mart customers.” And Wal-Mart doesn't stop there. It further claims that Converse's trademarked elements, the toe caps, toe bumpers and stripes, are “actually or aesthetically functional” and thus, are not subject to trademark protection (because trademark law does not protect functional aspects of a design). In its response, Wal-Mart stated: “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. 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.”
Converse, which is owned by Nike Inc., filed an ITC trademark infringement complaint against 32 retailers and manufacturers in October 2014, alleging that they each infringed Converse's legally protectable trade dress - including the trade dress of the All Star Chuck Taylor. In its ITC complaint, Converse alleges that brands ranging from Tory Burch and Ralph Lauren to Walmart and K-Mart violated section 337 of the Tariff Act of 1930 by importing into the U.S. and selling footwear that violates an array of its trademarks, such as the Chuck Taylor sneaker design (think: its trademark midsole design, which us made up of a toe bumper and a toe cap, plus either an upper stripe and/or lower stripe). The Massachusetts-based sneaker company is requesting that the ITC impose a “general exclusion order” that requires U.S. Customs and Border Protection to stop all of the brands' allegedly infringing footwear from being imported into the U.S.
Converse also filed 22 separate lawsuits against the companies in the U.S. District Court of Brooklyn, alleging federal trademark infringement and dilution (trade dress infringement falls under here), false designation of origin/unfair competition, and common law trademark infringement and unfair competition, among other claims. More to come …