• ITC Terminates Investigation And Issues General Exclusion and Cease and Desist Orders In Certain Foam Footwear (337-TA-567)
  • July 22, 2011 | Author: Alexander E. Gasser
  • Law Firm: Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • On July 15, 2011, the International Trade Commission (the “Commission”) issued a notice terminating the investigation and issuing general exclusion and cease and desist orders in Certain Foam Footwear (Inv. No. 337-TA-567). 

    By way of background, Complainant Crocs, Inc. (“Crocs”) filed a complaint with the ITC naming eleven respondents, alleging violations of Section 337 by infringement of U.S. Patent Nos. 6,993,858 (the ’858 patent), and D517,789 (the ’789 patent).  All respondents except Double Diamond Distribution Ltd., Holey Soles Holding Ltd., and Effervescent, Inc. (collectively, “Respondents”) had been terminated from the investigation on the basis of a consent order, settlement agreement, or an undisputed Commission determination of non-infringement.  On April 11, 2008, ALJ Bullock issued an initial determination finding no violation of Section 337 by reason of invalidity of the ’858 patent and non-infringement/non-satisfaction of the technical prong of the domestic industry requirement concerning the ’789 patent.  ALJ Bullock made no findings regarding the enforceability of the ’858 and ’789 patents.  On July 25, 2008, the ITC affirmed ALJ Bullock’s initial determination with certain modifications and clarifications.  Crocs appealed the ITC decision and on February 24, 2010, the Federal Circuit overturned the ITC’s findings regarding invalidity of the ’858 patent and non-infringement/non-satisfaction of the technical prong of the domestic industry requirement concerning the ’789 patent, remanding the investigation for a determination of infringement and any appropriate remedies. On February 9, 2011, ALJ Charles E. Bullock issued the remand ID determining that his first ID with respect to findings of Effervescent’s and Double Diamond’s infringement of the ’858 patent need not be revisited, and that Respondents had not shown by clear and convincing evidence that the ’858 or ’789 patents are unenforceable due to inequitable conduct. On April 25, 2011, the Commission determined not to review the remand ID and determined “to reaffirm the ALJ’s previous ruling that claims 1 and 2 of the ‘858 patent are infringed by Effervescent’s accused products, and that claim 2 of the ‘858 patent is infringed by Double Diamond’s accused products.”  The Commission further determined that “[t]hese actions, along with the Federal Circuit’s decision, result in a finding of a violation of section 337 by [Effervescent’s and Double Diamond’s] accused products.”

    According to the July 15 notice, the Commission determined that Holey Soles infringed the ’789 patent based on the Federal Circuit’s reversal of non-infringement as to the ‘789 patent.

    The Commission therefore determined that as to remedy, it would issue both: (1) a general exclusion order prohibiting the unlicensed entry of foam footwear that infringe (i) claims 1-2 of the ’858 patent, and/or and (ii) the claimed design of the ’789 patent; and (2) cease and desist orders prohibiting Double Diamond, Effervescent, and Holey Soles from importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), and soliciting U.S. agents or distributors for foam footwear that infringe (i) claims 1-2 of the ’858 patent, and/or (ii) the claimed design of the ’789 patent.

    The Commission further determined to require no bond for Double Diamond’s covered products, a bond of $0.01 per pair of shoes for Holey Soles products, a bond of $0.05 per pair of shoes for Effervescent’s products, and a bond of 100% of the entered value for all other covered products to permit temporary importation during the Presidential review period.

    Finally, the Commission terminated the investigation.