PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
`
`Before The Honorable Charles E. Bullock
`Chief Administrative Law Judge
`
`Investigation No. 337-TA-936
`
`In the Matter of
`
`
`
`CERTAIN FOOTWEAR PRODUCTS
`
`
`JOINT MOTION TO TERMINATE INVESTIGATION AS TO
`OSITOS SHOES, INC. BASED ON SETTLEMENT AGREEMENT AND CONSENT
`ORDER AND MOTION TO STAY INVESTIGATION AS TO OSITOS SHOES, INC.
`
`Ground Rule 3.2 Certification
`
`Pursuant to Ground Rule 3.2, Complainant Converse Inc. (“Converse”) and Respondent
`
`Ositos Shoes, Inc. d/b/a Collection’O (“Ositos”) contacted the participating Respondents and the
`
`Commission Investigative Staff (“Staff”) regarding this motion. Respondent Fortune Dynamic,
`
`Inc. indicated it will take a position after reviewing the papers. Respondents Gina Group, LLC
`
`and Skechers U.S.A., Inc. indicated they do not oppose this motion. None of the other
`
`Respondents provided a position. The Staff indicated she will take a position after reviewing the
`
`papers.
`
`Pursuant to Commission Rules 210.21(b) and (c), Complainant and Respondent Ositos
`
`jointly move to terminate this investigation as to Ositos based on a Consent Order Stipulation
`
`and proposed Consent Order (attached as Exhibits A and B, respectively), and confidential
`
`Settlement Agreement (attached as Confidential Exhibit C). As detailed in the Consent Order
`
`Stipulation, Ositos has, among other things, agreed not to import, sell for importation, or sell in
`
`the United States after importation any footwear products that infringe the trademarks asserted
`
`against Ositos, except under consent or license from Complainant. Aside from the Consent
`
`Order Stipulation and Settlement Agreement, there are no other agreements, written or oral,
`
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`34322-2
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`PUBLIC VERSION
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`express or implied, between Complainant and Ositos concerning the subject matter of the
`
`Investigation. Complainant and Ositos also respectfully request a stay of the investigation as to
`
`all events and Procedural Schedule deadlines related to Ositos pending final resolution of the
`
`joint motion to terminate.
`
`Complainant further requests that the Administrative Law Judge prevent access of the
`
`confidential version of the Settlement Agreement to the other Respondents and their counsel as
`
`provided in Commission Rules 210.21(b)(1) and (c). The unredacted version of the confidential
`
`Settlement Agreement is being served only on the Administrative Law Judge and the Staff as
`
`Confidential Exhibit C. The Settlement Agreement includes Confidential Business Information
`
`as outlined in Commission Rule 201.6, namely, specific and highly-sensitive details that, if
`
`disclosed, could affect Complainant’s settlement prospects with other Respondents.
`
`Accordingly, the other Respondents and their counsel should not have access to the confidential
`
`version of the Settlement Agreement. Ositos does not oppose Complainant’s request to limit
`
`disclosure of the unredacted versions of the confidential Settlement Agreement.
`
`A second confidential version of the Settlement Agreement (attached as Confidential
`
`Exhibit D) is being served on counsel for the remaining, non-settling Respondents. This version
`
`of the Settlement Agreement has only the financial terms redacted. Disclosing this information
`
`to non-settling Respondents or their counsel could affect Complainant’s settlement prospects
`
`with the other Respondents. Accordingly, Complainant requests, pursuant to Commission Rules
`
`210.21(b)(1) and (c), that it be permitted to serve only Confidential Exhibit D on the non-settling
`
`Respondents.
`
`Finally, pursuant to Commission Rule 210.21(b)(1), a public version of the Settlement
`
`Agreement (attached as Exhibit E) is being filed with a public version of the motion.
`
`
`34322-2
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`PUBLIC VERSION
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`For the reasons set forth in the accompanying Memorandum of Points and Authorities,
`
`Complainant and Ositos respectfully request the ALJ grant the motion and issue an initial
`
`determination terminating Ositos from this Investigation and staying the Investigation as to
`
`Ositos pending final resolution of the Motion to Terminate.
`
`
`
`Respectfully submitted,
`
`
`
`/s/ Evan H. Langdon
`V. James Adduci, II
`Deanna Tanner Okun
`Jonathan J. Engler
`Evan H. Langdon
`ADDUCI, MASTRIANI & SCHAUMBERG, LLP
`1133 Connecticut Avenue, N.W., 12th Floor
`Washington, DC 20036
`Telephone: (202) 467-6300
`Facsimile: (202) 466-2006
`
`Christopher J. Renk
`Erik S. Maurer
`Michael J. Harris
`Katherine Laatsch Fink
`Audra C. Eidem Heinze
`Aaron P. Bowling
`BANNER & WITCOFF, LTD.
`Ten South Wacker Drive, Suite 3000
`Chicago, IL 60606
`Telephone: (312) 463-5000
`Facsimile: (312) 463-5001
`
`Counsel for Complainant Converse Inc.
`
`
`
`3
`
`Dated: December 23, 2014
`
`
`
`
`
`/s/ Mitchell S. Feller
`Mitchell S. Feller
`Gottlieb, Rackman & Reisman, PC
`270 Madison Avenue
`New York, NY 10016-0601
`Email: msfeller@grr.com
`
`Counsel for Respondent Ositos Shoes, Inc.
`d/b/a/ Collection’O
`
`
`
`
`
`
`34322-2
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`

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`
`
`PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
`
`Before The Honorable Charles E. Bullock
`Chief Administrative Law Judge
`
`Investigation No. 337-TA-936
`
`In the Matter of
`
`
`
`CERTAIN FOOTWEAR PRODUCTS
`
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
`JOINT MOTION TO TERMINATE THE INVESTIGATION AS TO
`OSITOS SHOES, INC., D/B/A COLLECTION’O BASED ON SETTLEMENT
`AGREEMENT AND CONSENT ORDER AND MOTION TO STAY INVESTIGATION
`AS TO OSITOS SHOES, INC., D/B/A COLLECTION’O
`
`to Commission Rule 210.21(b) and (c), Complainant Converse Inc.
`
`Pursuant
`
`(“Converse”) and Respondent Ositos Shoes, Inc., d/b/a Collection’O (“Ositos”) submit this
`
`memorandum in support of their Joint Motion to Terminate the Investigation as to Ositos Based
`
`on Settlement Agreement and Consent Order and Motion to Stay Investigation as to Ositos.
`
`A.
`
`The Investigation Should Be Terminated As To
`Ositos Based On a Settlement Agreement and Consent Order
`
`Commission Rule 210.21(a)(2) provides that any party may move at any the time to
`
`terminate an investigation in whole or in part based on a settlement agreement and/or a consent
`
`order. Complainant and Respondent Ositos have reached an agreement to settle this
`
`Investigation as to Ositos and entered into a fully executed Settlement Agreement. (Confidential
`
`Exhibit C). The Settlement Agreement is fully effective and completely resolves the dispute in
`
`this Investigation between Complainant and Ositos. Pursuant to this agreement, Ositos has
`
`agreed to sign a Consent Order Stipulation and to the entry of a Consent Order. Complainant and
`
`Ositos aver that the Settlement Agreement reflects the entire and only agreement between
`
`Complainant and Ositos regarding the subject matter of this Investigation. There are no other
`
`agreements, written or oral, express or implied, regarding the subject matter of this Investigation.
`
`
`34323-2
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`PUBLIC VERSION
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`Commission policy and the public interest generally favor settlements, which preserve
`
`resources for both the Commission and the parties, and termination based on settlement
`
`agreement is routinely granted. See, e.g., Certain Consumer Elec., Including Mobile Phones and
`
`Tablets, Inv. No. 337-TA-839, Order No. 35 at 2 (Feb. 4, 2013) (“termination of litigation under
`
`these circumstances as an alternative method of dispute resolution is generally in the public
`
`interest and will conserve public and private resources”); Certain Portable Commc’n. Devices,
`
`Inv. No. 337-TA-827, Order No. 15 at 2 (May 31, 2012) (unreviewed) (terminating investigation
`
`based on settlement agreement). Furthermore, the terms of the Consent Order Stipulation and
`
`proposed Consent Order are consistent with Commission Rule 210.21 and the Commission
`
`frequently terminates respondents on the basis of similar consent orders. See, e.g. Certain Sleep-
`
`Disordered Breathing Treatment Systems and Components Thereof, Inv. No. 337-TA-879, Order
`
`No. 8, at 4-5 (June 26, 2013) (granting motion for termination by consent order based on
`
`application of amended Rule 210.21(c)). Accordingly, the Investigation should be terminated as
`
`to Ositos.
`
`In ruling on a motion to terminate based on a settlement agreement and/or proposed
`
`consent order, the Commission must consider the effect of the consent order “upon the public
`
`health and welfare, competitive conditions in the U.S. economy, the products of like or directly
`
`competitive articles in the United States, and U.S. consumers.” 19 C.F.R. § 210.21(c)(2)(ii). If a
`
`consent order does not adversely affect the public health and welfare or competitive conditions in
`
`the United States, termination of the Investigation based on entry of the consent order is
`
`generally granted by the Commission. See, e.g., Certain Digital Televisions & Components
`
`Thereof, Inv. No. 337-TA-742, Order No. 7 (Jan. 28, 2011); Certain Flat Panel Digital
`
`Televisions & Components Thereof, Inv. No. 337-TA-733, Order No. 10 (Jan. 26, 2011).
`
`34323-2
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`2
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`Termination of this Investigation as to Ositos based on the Settlement Agreement and proposed
`
`PUBLIC VERSION
`
`Consent Order is in the public interest and does not affect the public health and welfare,
`
`competitive conditions of the U.S. economy, the production of like or directly competitive
`
`articles in the United States, or U.S. consumers.
`
`B.
`
`The ALJ Should Protect the Confidential Terms
`of the Settlement Agreement from Disclosure
`to the Other Respondents and Their Counsel
`
`
`
`The Commission Rules provide that “[o]n motion for good cause shown, the
`
`administrative law judge may limit the service of the agreements to the settling parties and the
`
`Commission investigative attorney.” 19 C.F.R. §§ 210.21(b)(1) and (c). Complainant is
`
`engaged in ongoing efforts to settle its trademark infringement claims with other parties,
`
`including the remaining Respondents. Disclosure of the financial terms set forth in the
`
`Settlement Agreement to the remaining Respondents or their counsel would prejudice
`
`Complainant by providing the remaining Respondents an unfair advantage in future negotiations.
`
`See Certain Wiper Blades, Inv. No. 337-TA-816, Order No. 103 (Initial Determination), at 2
`
`(Sept. 30, 2013) (granting motion to terminate based on settlement agreement filed with a
`
`redacted version of the settlement agreement); Certain Consumer Elec. with Display &
`
`Processing Capabilities, Inv. No. 337-TA-884, Order No. 14 at 4 (July 31, 2013) (holding that a
`
`redaction of core financial terms from a settlement agreement was appropriate in light of revised
`
`Rule 210.21(b)(1)); Certain Machine Vision Software, Machine Vision Systems & Prods.
`
`Containing Same, Inv. No. 337-TA-680, Order No. 17 at 4 (Oct. 26, 2009) (“[F]orcing settling
`
`respondents and complainants to reveal the precise terms of their settlements to non-settling
`
`respondents could discourage settlements, even if such disclosures were made only to counsel
`
`who have subscribed to the protective order.”).
`
`34323-2
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`3
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`

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`
`
`PUBLIC VERSION
`
`Disclosure of the financial terms of the Settlement Agreement to remaining Respondents
`
`or their counsel would place these parties at an advantage, and Complainant at a disadvantage, in
`
`potential future settlement negotiations. This imbalance would discourage future negotiations
`
`and settlements, which is contrary to the public policy of encouraging settlement. Thus, there is
`
`good cause for the Administrative Law Judge to bar disclosure of the Settlement Agreement to
`
`the remaining Respondents and their counsel. Accordingly, Complainant should be permitted to
`
`provide the remaining Respondents with only a confidential version of the Settlement
`
`Agreement, attached to the Motion as Confidential Exhibit D, wherein essential financial terms
`
`have been redacted. The unredacted version of the Settlement Agreement, attached to the
`
`Motion as Confidential Exhibit C, filed with the Commission and served on the Staff should not
`
`be served on the non-settling Respondents in this Investigation.
`
`C.
`
`The ALJ Should Stay the Investigation as to Ositos
`
`Complainant and Ositos request a stay of the Investigation pending final resolution of the
`
`instant motion as to all events and Procedural Schedule deadlines related to Ositos. Good cause
`
`exists to stay the investigation as to Ositos pending resolution of the instant motion to terminate
`
`the investigation based on a settlement agreement and consent order. Such a stay will conserve
`
`the resources of the Commission and the parties. Similar requests for stay have been granted
`
`when parties have reached settlement. See, e.g. Certain Hybrid Electric Vehicles, Inv. No. 337-
`
`TA-688, Order No. 15, at 1 (July 15, 2010); Certain Sleep-Disordered Breathing Treatment Sys.
`
`and Components Thereof, Inv. No. 337-TA-879, Order No. 11, at 6 (July 17, 2013); Certain
`
`Consumer Elec. with Display and Processing Capabilities, Inv. No. 337-TA-884, Order No. 32
`
`at 1 (Oct. 18, 2013).
`
`For the reasons set forth above, Complainant and Ositos respectfully request that the ALJ
`
`grant the Motion to Terminate and issue an Initial Determination terminating Ositos from this
`
`34323-2
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`4
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`

`
`
`Investigation pursuant to Commission Rules 210.21(b) and (c). Further, the ALJ should limit
`
`PUBLIC VERSION
`
`service of the unredacted version of the confidential Settlement Agreement to the settling parties
`
`and Staff, and stay the investigation pending final resolution of the Motion to Terminate.
`
`Respectfully submitted,
`
`
`
`
`
`/s/ Evan H. Langdon
`V. James Adduci, II
`Deanna Tanner Okun
`Jonathan J. Engler
`Evan H. Langdon
`ADDUCI, MASTRIANI & SCHAUMBERG, LLP
`1133 Connecticut Avenue, N.W., 12th Floor
`Washington, DC 20036
`Telephone: (202) 467-6300
`Facsimile: (202) 466-2006
`
`Christopher J. Renk
`Erik S. Maurer
`Michael J. Harris
`Katherine Laatsch Fink
`Audra C. Eidem Heinze
`Aaron P. Bowling
`BANNER & WITCOFF, LTD.
`Ten South Wacker Drive, Suite 3000
`Chicago, IL 60606
`Telephone: (312) 463-5000
`Facsimile: (312) 463-5001
`
`Counsel for Complainant Converse Inc.
`
`Dated: December 23, 2014
`
`
`
`
`
`/s/ Mitchell S. Feller
`Mitchell S. Feller
`Gottlieb, Rackman & Reisman, PC
`270 Madison Avenue
`New York, NY 10016-0601
`Email: msfeller@grr.com
`
`Counsel for Respondent Ositos Shoes, Inc.
`d/b/a/ Collection’O
`
`
`
`
`
`
`
`
`
`34323-2
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`5
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`
`
`EXHIBIT A
`EXHIBIT A
`
`

`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
`
`Before The Honorable Charles E. Bullock
`Chief Administrative Law Judge
`
`Investigation No. 337-TA-936
`
`
`
` In the Matter of
`CERTAIN FOOTWEAR PRODUCTS
`
`CONSENT ORDER STIPULATION BY
`OSITOS SHOES, INC. D/B/A COLLECTION’O
`
`WHEREAS, Complainant Converse Inc. (“Converse”) filed a Complaint before the
`United States International Trade Commission (the “Commission”) on October 14, 2014,
`alleging unfair acts by Ositos Shoes, Inc. d/b/a Col1ection’O (“Ositos”) in the importation into
`the United States, sale for importation into the United States, and sale after importation into the
`United States of footwear products that infringe U.S. Trademark Registration No. 4,398,753
`(“the ‘753 Registration");
`
`above-captioned investigation under
`the Commission has instituted the
`VVHEREAS,
`based upon the allegations
`Section 337 ofthe TariffAct of 1930 as amended (19 U.S.C. § 1337),
`in the Complaint filed by Converse;
`
`WHEREAS, Converse and Ositos have executed a Settlement Agreement; and
`WHEREAS, Ositos agrees to the entry of a Consent Order by the Commission in the
`form attached hereto as Exhibit A;
`
`NOW THEREFORE, pursuant to Commission Rule 210.21(c)(1)(ii) and (c)(3), Ositos
`stipulates and agrees as follows in connection with Converse’s Motion to Terminate Investigation
`as to Ositos Based on Settlement Agreement and Consent Order:
`
`"-1
`
`1.
`
`2.
`
`3.
`
`4.
`
`Ositos is a corporation organized and existing under the laws of California, having a
`place of business at 9605 Rush Street, South El Monte, CA 91733.
`
`in rem jurisdiction over Ositos’s footwear products
`The Commission has:
`basis of this Investigation;
`in personam jurisdiction over Ositos for purposes of this
`Consent Order; and subject matter jurisdiction over this Investigation.
`
`Converse asserts that Ositos’s footwear products infringe the ‘753 Registration.
`
`Ositos will not sell for importation, import, or sell after importation footwear products
`that infringe the ‘753 Registration (“Subject Articles”), directly or indirectly, and shall
`not aid, abet, encourage, participate in, or
`induce the sale for
`importation,
`the
`importation, or the sale after importation of Subject Articles except under consent or
`
`Error‘. Unknown document property name.
`
`

`
`license from Converse, or to the extent permitted by the Settlement Agreement between
`Converse and Ositos.
`
`Ositos will cease importing, distributing, selling, or otherwise transferring Subject
`Articles in the United States.
`
`Ositos agrees to the entry of a Consent Order, by the Commission, in the form attached
`hereto as Exhibit A-
`
`Ositos expressly waives all rights to seek judicial review or otherwise challenge or
`contest the validity of the Consent Order.
`
`Ositos will cooperate with and will not seek to impede by litigation or other means the
`Commission’s efforts to gather information under Subpart I ofthe Commission’s Rules of
`Practice and Procedure, 19 C.F.R. Part 210.
`
`Enforcement, modification, or revocation of the Consent Order will be carried out
`pursuant to Subpart I of the Commission’s Rules of Practice and Procedure, 19 C.F.R.
`Part 210, which is incorporated by reference herein.
`
`The signing of this Consent Order Stipulation is for settlement purposes only and does
`not constitute an admission by Ositos that any unfair act has been committed.
`'
`
`The Consent Order shall have the same force and effect and may be enforced, modified,
`or revoked in the same manner as is provided in section 337 of the Tariff Act of 1930 and
`19 C.F.R. Part 210 for other Commission actions, and the Commission may require
`periodic compliance reports pursuant to Subpart I of 19 C.F.R. Part 210 to be submitted
`by the person entering into the consent order stipulation.
`
`The Consent Order shall not apply with respect to the ‘753 Registration if it has expired
`or been found or adjudicated invalid or unenforceable by the Commission or a court or
`agency of competent jurisdiction, provided that such finding or judgment has become
`final and non-reviewable.
`A
`Ositos and their officers, directors, employees, agents and any entity or individual acting
`on their behalf and with their authority will not seek to challenge the validity or
`enforceability of the ‘753 Registration in any administrative or judicial proceeding to
`enforce the Consent Order.
`
`The Consent Order shall be applicable and binding upon Ositos, its officers, directors,
`agents, servants, employees and all persons, firms, successors, assigns, or corporations
`acting or claiming to act on behalf of Ositos or under the direction or authority of Ositos.
`
`10.
`
`ll.
`
`12.
`
`13.
`
`14.
`
`I declare under penalty of perjury under the laws ofthe United States ofAmerica that the
`foregoing is true and correct.
`
`Error! Unknowmdocument property name.
`
`

`
`Ositos Shoes, Inc.,
`d/b/a Collection‘ 0
`
`9605 Rush Street
`
`South El Monte, CA 91733
`W
`
`V
`
`IT IS SO STIPULATED
`
`Dated: December 19, 2014
`
`Error! Unknown document property name.
`
`

`
`
`
`EXHIBIT B
`EXHIBIT B
`
`

`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC
`
`Before The Honorable Charles E. Bullock
`Chief Administrative Law Judge
`
`In the Matter of
`
`
`
`CERTAIN FOOTWEAR PRODUCTS
`
`
`Investigation No. 337-TA-936
`
`CONSENT ORDER
`
`
`
`The International Trade Commission (the “Commission”) has instituted the above-
`
`captioned investigation under Section 337 of the Tariff Act of 1930 as amended (19 U.S.C.
`
`§ 1337), based upon the allegations contained in the Complaint filed by Converse Inc., which
`
`alleges violations of Section 337 by Respondent Ositos Shoes, Inc., d/b/a Collection’O
`
`(“Ositos”) based upon the importation into the United States, the sale for importation into the
`
`United States, and/or the sale within the United States after importation of certain footwear
`
`products that infringe U.S. Trademark Registration No. 4,398,753 (“the ‘753 Registration”).
`
`Respondent Ositos has executed a Consent Order Stipulation in which it agrees to the
`
`entry of this Consent Order and to all waivers and other provisions as required by the
`
`Commission’s Rules of Practice and Procedure, has executed a Settlement Agreement with
`
`Converse, and has consented to the filing of the Joint Motion to Terminate Investigation as to
`
`Ositos Based on Settlement Agreement and Consent Order.
`
`

`
`
`
`
`NOW, THEREFORE, the Commission issues the following Consent Order:
`
`1.
`
`The Complainant in this Investigation is Converse Inc., a Delaware corporation
`
`having a place of business at 1 High Street, North Andover, Massachusetts 01845 (“Converse”).
`
`2.
`
`The Respondent covered by this Consent Order is Ositos, a corporation organized
`
`and existing under the laws of California, having a place of business at 9605 Rush Street, South
`
`El Monte, CA 91733.
`
`3.
`
`The subject articles are footwear products that were previously imported into the
`
`United States, sold for importation into the United States, and/or sold within the United States
`
`after importation and that are alleged to infringe the ‘753 Registration (the “Subject Articles”).
`
`4.
`
`In its Complaint, Converse alleges that Ositos sells for importation, imports,
`
`and/or sells in the United States after importation Subject Articles in violation of Section 337 of
`
`the Tariff Act of 1930 as amended (19 U.S.C. § 1337) by reason of infringement of the ‘753
`
`Registration.
`
`5.
`
`Ositos has executed a Consent Order Stipulation and stipulates to the entry of this
`
`Consent Order.
`
`6.
`
`Ositos shall not sell for importation, import, or sell after importation Subject
`
`Articles, directly or indirectly, and shall not aid, abet, encourage, participate in, or induce the
`
`sale for importation, the importation, or the sale after importation of Subject Articles except
`
`under consent or license from Converse, or to the extent permitted by the Settlement Agreement
`
`between Converse and Ositos.
`
`7.
`
`Ositos shall cease and desist from importing and distributing Subject Articles in
`
`2
`
`the United States.
`
`
`
`

`
`8.
`
`Ositos shall be precluded from seeking judicial review or otherwise challenging
`
`or contesting the validity of the Consent Order.
`
`9.
`
`Ositos shall cooperate with and shall not seek to impede by litigation or other
`
`means the Commission’s efforts to gather information under Subpart I of the Commission’s
`
`Rules of Practice and Procedure, 19 C.F.R. Part 210.
`
`10.
`
`Ositos and its officers, directors, employees, agents and any entity or individual
`
`acting on its behalf and with its authority shall not seek to challenge the validity or enforceability
`
`of the ‘753 Registration in any administrative or judicial proceeding to enforce the Consent
`
`Order.
`
`11.
`
`If the ‘753 Registration expires, this Consent Order shall become null and void as
`
`to such expired trademark.
`
`12.
`
`The Consent Order shall become null and void with respect to the ‘753
`
`Registration if it is held invalid or unenforceable by a court or agency of competent jurisdiction
`
`or as to any articles that have been found or adjudicated not to infringe the ‘753 Registration in a
`
`final decision, no longer subject to appeal.
`
`13.
`
`This Investigation is hereby terminated with respect to Ositos; provided, however,
`
`that enforcement, modification, or revocation of this Consent Order shall be carried out pursuant
`
`to Subpart I of the Commission’s Rules of Practice and Procedure, 19 C.F.R. Part 210.
`
`BY ORDER OF THE COMMISSION
`
`
`
`
`
`
`_______________________________
`Lisa Barton
`Secretary
`
`
`
`
`
`
`
`
`
`
`3
`
`
`Dated: _______________
`
`
`
`
`
`
`
`

`
`
`Confidential
`EXHIBIT C
`
`(Removed)
`
`

`
`
`Confidential
`EXHIBIT D
`
`(Removed)
`
`

`
`
`
`EXHIBIT E
`EXHIBIT E
`
`

`
`AGREEMENT
`
`This Agreement is made and entered into as of the latest signature date below (the
`“Effective Date”) by and between Converse Inc., a Delaware corporation, having a place of
`business at 1 High Street, North Andover, Massachusetts 01810 (“Converse”) and Ositos Shoes,
`Inc., d/b/a Collection’O, a California corporation, having a place of business located at 9605
`Rush Street, South El Monte, CA 91733 (“Ositos”).
`
`WHEREAS, On October 14, 2014, Converse filed complaints against Ositos in the
`District Court for the Eastern District of New York, Civil Action No. 1:14-cv-05982 (the “Civil
`Action”) and in the International Trade Commission (“ITC”), alleging that Ositos violated the
`Converse Midsole Trademark (as defined below) through importation of Accused Products (as
`defined below) into the United States, sale of Accused Products for importation, or sale
`(including distribution and/or promotion) of Accused Products in the United States;
`
`WHEREAS, On November 12, 2014, the Commissioners of the ITC unanimously voted
`to institute" investigation 337-TA-936 further to Converse’s complaint against Ositos (the “ITC
`Action”);
`
`WHEREAS, Converse and Ositos desire to settle and resolve the matters between them
`
`relating to the Civil Action, the ITC Action, the Converse Midsole Trademark, and Ositos’
`Accused Products.
`
`NOW, THEREFORE, in consideration of the mutual promises contained herein and the
`actions of each party in fulfillment of the agreements contained herein, Converse and Ositos
`agree as follows:
`
`I.
`
`Definitions
`
`“Accused Product(s)” means (A) all articles of footwear imported into the United States,
`sold for importation within the United States, andfor sold after importation into the United States
`by Ositos, for Ositos, or on Ositos’ behalf bearing the Converse Midsole Trademark; (B) all
`articles accused of violating Converse’s rights in the Converse Midsole Trademark — including
`but not limited to Ositos’ Accused Products identified in Section IV of the ITC Act.' )1]
`-,
`Complaint; (C) all articles of footwear imported into the United States, sold for importation
`within the United States, andfor sold after importation into the United States by Ositos, for
`Ositos, or on Ositos’ behalf whose midsole creates an overall visual impression the same as or
`substantially similar to the appearance of the Converse Midsole Trademark; and (D) colorable
`imitations of any or all of the foregoing.
`
`“Converse Midsole Tradeinar ” refers to the midsole design made up of a toe bumper
`and a toe cap, plus either an upper stripe and/or a lower stripe that Converse claims have
`commonly been used by Converse since 1932 in connection with “All Star” shoes, among other
`Converse products, including U.S. Trademark Registration No. 4,398,753. The overall
`appearance of the Converse Midsole Trademark is shown in Illustration 1 below.
`
`AGREEMEN‘r BETWEEN CONVERSE INC. AND
`
`OSITOS SHOES, lNC., D/B/A CoLLEcrioN’O
`
`PAGE 1 or 7
`
`

`
`Iilustriaiiion 1_:If§g_'!'L 3 - ear“-';ii1ce3titIj_tl1'e "Converse’l\?1ids'oIe Trademark
`
`
`
`The parties acknowledge that the scope and validity of the Converse Midsole Trademark is at
`issue in one or more legal actions involving third—parties, such cases including but not limited to
`the ITC action identified above. In the event there is a final judgment (after all appeals have
`been exhausted) in a legal action in the United States involving Converse and a third-party and
`which narrows the scope of the Converse Midsole Trademark relative to the definition set forth
`herein, such narrowed scope shall thereafter apply in the context of this Agreement.
`
`II.
`
`Acknowledgement of C0nverse’s Trademark Rights
`
`Ositos agrees that Converse owns common law and registered trademark rights in
`A.
`the Converse Midsole Trademark, including the design shown in U.S. Trademark Registration
`No. 4,398,753.
`
`B.
`
`Ositos agrees that the Converse Midsole Trademark is valid and enforceable.
`
`Ositos agrees that the Converse Midsole Trademark is distinctive, non-functional,
`C.
`well known in association with Converse, and famous.
`
`III.
`
`Agreement Not to Challenge Converse’s Trademark Rights
`
`Ositos agrees not to directly or indirectly aid, assist, or participate in any action or
`A.
`proceeding in any forum contesting the validity or enforceability of the Converse Midsole
`Trademark, or of Conve-rse’s rights therein.
`
`Ositos agrees not to contribute to the infringement of the Converse Midsole
`B.
`Trademark by others.
`
`Ositos agrees not to apply for or register any traclemark(s) or design(s) that are
`C.
`confusingly similar to the Converse Midsole Trademark or colorable imitations thereof.
`
`IV.
`
`Representations and Warranties
`
`A.
`
`Ositos represents and warrants that, as of the Effective Date:
`
`J
`
`1.
`
`Following is a list of all the Accused Products, by model name, that Ositos
`sold in the United States prior to the Effective Date:
`
`AGREEMENT BETWEEN CONVERSE INC. AND
`
`OSITOS SHOES, INC., D/B/A COLLECTION’O
`
`PAGE 2 OF 7
`
`

`
`Ositos sold approximately—pairs of the Accused Products in the
`United States prior to the Effective Date. Following is a breakdown of the
`number of pairs of each Accused Product, by model name, that Ositos sold
`in the United States prior to the Effective Date:
`
`Ositos’ sales of the Accused Products in the United States
`
`rior to the
`
`Effective Date generated approximately n gross
`
`sitos gross revenue for
`revenue for Ositos. Following is a break own 0
`each Accused Product, by model name, that Ositos sold in the United
`States prior to the Effective Date:
`
`0 O
`
`Ositos’ sales of the Accused Products in the United States prior to the
`Effective Date generated approximately— in profit for
`Ositos. Following is a breakdown of Ositos’ profit for each Accused
`Product, by model name, that Ositos sold in the United States prior to the
`Effective Date:
`
`0 O
`
`As of the Efiective Date, Ositos has_ of Accused Products in
`inventory in the United States, and Ositos has no Accused Products in
`transit to the United States. Following is a breakdown of each Accused
`Product, by model name, that Ositos currently has in inventory in the
`United States:
`
`.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`The following information identifies all entities involved in manufacturing
`and/or supplying the Accused Products to Ositos:
`
`
` .
`
`AGREEMENT BETWEEN CONVERSE INC. AND
`
`Osnos SHOES, INC., D/B/A COLLECTl0N’O
`
`PAGE 3 01-‘ 7
`
`

`
`7.
`
`8.
`
`9.
`
`10.
`
`1 l.
`
`12.
`
`13.
`
`“
`
`,.
`
`Ositos does not possess or control information regarding the conception or
`design of the Accused Products it sold in the United States.
`
`Ositos is solely responsible for its sales of the Accused Products in the
`United States, but is not responsible for any downstream sales by its
`customers.
`
`Ositos sold the Accused Products in the United States to third parties,
`including sales to Zulily, where Zulily then offered the shoes for sale on
`Zulily.com.
`
`Ositos is solely responsible for selecting the Accused Products it imported
`and sold.
`'
`
`Ositos worked with Xiamen Weisman Import & Export Company to
`arrange for the export of the Accused Products fi'om the manufacturer in
`China and importation into the United States, including shipment. The
`Accused Products were received by Ositos in a single shipment, which
`shipment also included other shoes purchased by Ositos. Attached as
`Exhibit A is the Bill of Lading for this shipment and which includes
`additional details about the relevant parties.
`
`Ositos is able to pay the settlement amount described below.
`
`Ositos has the right to make all warranties and representations set forth in
`this Agreement, and that the person executing this Agreement on its behalf
`has full authority, competence and power to bind it and its afliliates to this
`Agreement and all of the terms hereof.
`
`Converse represents and warrants that the person executing this Agreement on its
`B.
`behalf has full authority, competence, and power to bind it to this Agreement and all of the terms
`hereof.
`
`V.
`
`Disposition of Claims
`
`Ositos shall cease and permanently and forever desist from (1) manufacturing,
`A.
`advertising, promoting, selling, offering to sell, distributing, supplying, importing into the United
`States, and/or exporting into or out of the United States Accused Products, and (2) otherwise
`violating Converse’s rights in the Converse Midsole Trademark.
`
`No later than ten days afier the Effective Date, Ositos shall destroy its entire
`B.
`inventory of Accused Products, component parts thereto, and/or tools and molds for making
`Accused Pr