Skechers Scores Major Victory in Trademark Dispute with Converse in Ruling by the United States International Trade Commission

  • ITC Invalidates Converse's Registered and Common Law Trademarks in the Chuck Taylor Midsole Design
  • ITC Finds Skechers' Twinkle Toes and Bobs Shoes Would Not Infringe in Any Event

MANHATTAN BEACH, Calif.--()--SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader and the second largest athletic footwear brand in the United States, today announced that the International Trade Commission ("ITC") has found that Converse's registered and common law trademarks in the Chuck Taylor midsole design are invalid; that Skechers' Twinkle Toes and BOBS shoes would not infringe Converse's claimed trademarks, even if the trademarks were valid; and that Skechers can continue importing and selling its Twinkle Toes and BOBS shoes in the United States.

“create enough differences that the shoes bearing them cannot be said to be similar to [the Chuck Taylor].”

In October 2014, Converse sued Skechers in federal district court and in the ITC alleging that the Company's well-known Twinkle Toes and BOBS product lines infringed Converse's registered and common law trademarks in the Chuck Taylor midsole design. The case went to trial before the ITC in August 2015.

In a November 17, 2015 opinion, the Chief Administrative Law Judge of the ITC, the Honorable Charles E. Bullock, ruled that Skechers' Twinkle Toes and BOBS product lines do not infringe Converse's trademarks for the Chuck Taylor midsole. In so ruling, the Judge noted that both of the Skechers product lines feature prominent branding and that the Twinkle Toes line contains design features that "create enough differences that the shoes bearing them cannot be said to be similar to [the Chuck Taylor]." The Judge also stated that the survey evidence concluded that there was no likelihood that consumers would confuse the Skechers Twinkle Toes and BOBS designs with those of Converse's Chuck Taylor designs. In addition, the Judge ruled that Converse has no common law trademark rights in the Chuck Taylor midsole because the design is not distinctive, not famous, and has failed to acquire secondary meaning. These portions of the Judge's opinion were affirmed by the ITC.

The Judge also ruled that Converse's registered trademark for the Chuck Taylor design is valid. However, this portion of the Judge's opinion was reversed by the ITC, which invalidated Converse's registered trademark along with Converse's common law trademark.

The ITC thus concluded that there was no violation by Skechers of Converse's asserted midsole trademarks and the ITC did not issue an exclusion order against Skechers or any of Skechers' products.

"We are pleased that the ITC invalidated Converse's claimed trademarks in the Chuck Taylor midsole design," stated Michael Greenberg, president of Skechers. "Countless companies, including Skechers, have used the same midsole design in canvas court-style sneakers for decades." "We are also pleased that the ITC affirmed Judge Bullock's conclusion that the Twinkles Toes and BOBS designs are distinctively different from the Chuck Taylor, and that there is no likelihood that consumers would ever confuse either Twinkle Toes or BOBS products with the Chuck Taylor. The decision further recognizes that Skechers investment in our distinctive designs and brand identity has helped build Twinkle Toes into a number one shoe line for young girls, and both Twinkle Toes and BOBS into household names synonymous with Skechers – not with Converse or any other brand."

Skechers is represented in the matter by Morgan Chu, Samuel Lu, Jane Wald, Melissa Rabbani, and Grace Chen of Irell & Manella; Jeffrey Barker of O'Melveny & Myers; and Barbara Murphy of Foster, Murphy, Altman & Nickel.

About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. SKECHERS footwear is available in the United States and over 160 countries and territories worldwide via department and specialty stores, more than 1,410 SKECHERS retail stores, and the Company’s e-commerce website. The Company manages its international business through a network of global distributors, joint venture partners in Asia, and wholly-owned subsidiaries in Brazil, Canada, Chile, Japan, Latin America and throughout Europe. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion and opening of new stores, the completion of the expansion and upgrade of the Company’s European distribution center, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will be,” “will continue,” “will result,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include international economic, political and market conditions including the uncertainty of sustained recovery in Europe; entry into the highly competitive performance footwear market; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2015 and its quarterly report on Form 10-Q for the quarter ended March 31, 2016. The risks included here are not exhaustive. The Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time and the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

Contacts

SKECHERS USA, Inc.
Jennifer Clay
VP of Corporate Communications
310-937-1326

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