934 F.3d 1332
Fed. Cir.2019Background
- Segway sued Swagway at the ITC under 19 U.S.C. § 1337 for infringement of two registered trademarks (SEGWAY stylized and plain, Reg. Nos. '948 and '942) and several patents; investigations were consolidated.
- Swagway marketed hoverboards under SWAGWAY and SWAGTRON; ALJ found SWAGWAY (but not SWAGTRON) infringed the marks based on a six-factor likelihood-of-confusion analysis, and denied Swagway’s motion to terminate via a proposed consent order by a footnote in the Initial Determination.
- The ITC reviewed, reversed the ALJ as to actual confusion (finding the actual confusion incidents de minimis) but sustained infringement based on other DuPont factors (similarity and strength of Segway marks).
- Swagway appealed the infringement finding and the denial of its consent-order motion, arguing (1) the Commission misweighed actual confusion and other factors and (2) the ALJ/Commission violated their rules and the APA by denying the consent motion in a footnote rather than by order, and by failing to explain the denial.
- The Federal Circuit affirmed the ITC’s infringement decision, holding the Commission reasonably reweighed factors and permissibly relied on mark strength and similarity; the court also upheld the denial of the consent-order motion as within ALJ discretion and found no prejudicial APA error from the footnote-form denial.
Issues
| Issue | Plaintiff's Argument (Swagway) | Defendant's Argument (ITC/Segway) | Held |
|---|---|---|---|
| Whether the ITC erred by finding likelihood of confusion despite limited actual confusion evidence | Lack of actual confusion, and concurrent use, should be dispositive or strongly weigh against likelihood of confusion | Actual confusion is only one DuPont factor; other factors (strong SEGWAY marks and high similarity) support finding | Affirmed: Commission reasonably weighed factors; strength/similarity can outweigh minimal actual confusion |
| Whether the ITC failed to properly reweigh DuPont factors after reversing ALJ on actual confusion | Reversal of actual confusion required the Commission to reweigh and should have favored Swagway | Commission did reweigh and explained reliance on other factors; no legal error in emphasis | Affirmed: Commission reweighed and its legal conclusion is supported by record |
| Whether denial of Swagway's consent-order motion violated ITC rules (denial must be in an order, not an ID footnote) | Denial in a footnote violated 19 C.F.R. §210.42(c) and Align requires relief for rule violation | ALJ violated form but denial was harmless: Swagway suffered no prejudice from footnote form | Affirmed: Rule violation harmless; no relief warranted |
| Whether the ALJ/Commission acted arbitrarily or violated the APA by failing to explain the consent-order denial | Lack of explicit rationale is arbitrary and frustrates review | Agency need not produce perfect detail; the record shows the ALJ denied because consent was filed late after extensive preparation and hearing proceeded | Affirmed: Rationale discernible from record; denial within ALJ discretion |
Key Cases Cited
- B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293 (2015) (likelihood-of-confusion standard same for registration and infringement)
- In re E.I. DuPont DeNemours & Co., 476 F.2d 1357 (C.C.P.A. 1973) (DuPont multi-factor likelihood-of-confusion framework)
- In re I.AM.Symbolic, LLC, 866 F.3d 1315 (Fed. Cir. 2017) (likelihood of confusion is a legal conclusion based on facts)
- M2 Software, Inc. v. M2 Commc'ns, Inc., 450 F.3d 1378 (Fed. Cir. 2006) (DuPont factors may be selective and weighted differently)
- Align Technology, Inc. v. Int'l Trade Comm'n, 771 F.3d 1317 (Fed. Cir. 2014) (agency must follow its procedural rules; rule violations can be reviewable)
- Midwestern Pet Foods, Inc. v. Societe des Produits Nestle S.A., 685 F.3d 1046 (Fed. Cir. 2012) (consumer surveys not required; absence of survey evidence is not presumptively adverse)