Last month, the Federal Circuit released its opinion in Crocs, Inc. v. International Trade Commission, a trademark case we have been following because it attracted an amicus brief. In this case, the Federal Circuit reviewed the International Trade Commission’s finding of no violation as to one set of parties (the “Active Respondents”) and the Commission’s entry of a limited exclusion order against another set of parties (the “Defaulting Respondents”). In an opinion authored by Judge Stoll, a panel of the court consisting of Judges Lourie, Stoll, and Chen dismissed the appeal in part and affirmed the Commission’s decision in part. This is our opinion summary.
Judge Stoll first described the relevant factual and procedural background:
Crocs owns [two trademarks] (collectively, the “3D Marks”), which cover certain features of Crocs’s Classic Clog shoes. In June 2021, Crocs filed a complaint with the Commission . . . accusing multiple respondents of violating [a statute] by importing, selling for importation, or selling in the United States after importation certain casual footwear that infringed or diluted Crocs’s 3D Marks. Crocs’s complaint requested relief in the form of a general exclusion order (GEO), or in the alterative, a limited exclusion order (LEO). In July 2021, the Commission instituted an Investigation based on Crocs’s complaint. Prior to the evidentiary hearing in the Investigation, the Commission found the four Defaulting Respondents ‘were in default and waived their rights to appear, to be served with documents, and to contest the allegations in this investigation.’
In January 2023, the Administrative Law Judge issued an Initial Determination finding no violation. . . . In April 2023, the Commission determined to review in part the Initial Determination, including the Administrative Law Judge’s findings on likelihood of confusion and dilution of the 3D Marks and whether Crocs waived its infringement contentions against the Defaulting Respondents.
On September 14, 2023, the Commission issued its Notice of Final Determination and corresponding Commission Opinion finding no violation . . . by the Active Respondents . . . . For the Defaulting Respondents, the Commission ‘determined to set aside the [Initial Determination]’s findings with respect to waiver as they do not apply to issuance of an LEO or [cease and desist order (CDO)] against a party found in default'” . . . The Commission noted that . . . ‘once a party is found in default, ‘the Commission shall presume the facts alleged in the complaint to be true and shall, upon request, issue an exclusion from entry [i.e., LEO] or a cease and desist order, or both, limited to that person,’ unless the Commission finds the public interest factors weigh against exclusion.’ . . . As the Commission found the public interest factors did not preclude relief in this case, it issued an LEO against the Defaulting Respondents.
On December 22, 2023, Crocs filed a notice of appeal.
After providing this background, Judge Stoll addressed the issues raised with respect to the Active Respondents. Judge Stoll explained that “[t]he language of [the statute] and our case law support dismissing Crocs’s appeal as to the Active Respondents” as untimely.
Judge Stoll rejected Crocs’s argument that “the 60-day appeal window set in [the statute] did not start to run until November 14, 2023, rendering its December 22, 2023 notice of appeal timely as to the Active Respondents.” She reasoned that, “in investigations that have a mixed result of a violation finding (subject to a presidential review period prior to the 60-day appeal window starting) and a no-violation finding (not subject to a presidential review period and so final for the purposes of starting the 60-day appeal window at the time it issues), the notices of appeal for the different findings have distinct appeal windows.”
Applied here, Judge Stoll reasoned, “the no violation finding against the Active Respondents was final as of the day it issued because it was not subject to presidential review or any other administrative proceedings, and so the 60-day period to file a notice of appeal began to run on September 14, 2023.” As a result, she said, the 60-day period ended on November 13, 2023, before Crocs filed its notice of appeal on December 22, 2023.
Turning to the issues raised with respect to the Defaulting Respondents, Judge Stoll emphasized that “‘the Commission has broad discretion in selecting the form, scope and extent of the remedy, and judicial review of its choice of remedy necessarily is limited.'” She stated that the Federal Circuit “‘must affirm the Commission’s choice of remedy unless the action is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'”
After reviewing the Commission’s analysis, Judge Stoll concluded that, “pursuant to the language of the statute, after finding that any waiver by Crocs of its infringement contentions against the Defaulting Respondents was irrelevant because the Commission had to accept the complaint allegations as true and enter an exclusion order under [the statute], the Commission could only issue an exclusion order ‘limited’ to those respondents it had found in default—i.e., an LEO.”
Judge Stoll added that the panel “considered Crocs’s remaining arguments and [found] them unpersuasive.”
As of result of Judge Stoll’s analysis, the panel dismissed Crocs’s appeal as to the Commission’s finding of no violation by the Active Respondents and affirmed the Commission’s decision entering a limited exclusion order against the Defaulting Respondents.