Starter Corp. v. Converse, Inc.

Converse, Inc. (Converse) (defendant) had sold shoes bearing a trademarked five-pointed star (Converse star mark) since 1917. In 1988, Starter Corp. (Starter) (plaintiff) filed an application to register trademarks featuring a star (Starter star) for use on clothing and shoes. Converse opposed the application, and the parties negotiated a settlement agreement. Starter agreed to remove the star mark from its trademark application for shoes, and Converse withdrew its opposition to the application. The agreement allowed Starter to use its brand name, but not the Starter star, on shoes. In the early 1990s, changes in the apparel industry caused athletic teams to begin purchasing all uniforms, including shoes, from a single company. In 1993, Starter filed a new trademark application for the Starter star mark for use on shoes. Converse opposed the new application and threatened to sue Starter if Starter began selling shoes bearing the Starter star mark. Starter did not begin selling shoes bearing any star mark. Instead, Starter sued Converse and sought a declaratory judgment that using its Starter star mark on athletic footwear would not infringe upon Converse’s star mark. Converse did not respond with a counterclaim or a demand for an injunction but, rather, asserted only affirmative defenses. The jury entered a verdict in favor of Converse, finding a likelihood of confusion between Converse’s star mark and Starter’s star mark when used on athletic footwear. The district court entered a permanent injunction against Starter sua sponte, enjoining use of the Starter star mark on all footwear. Starter appealed, arguing the district court abused its discretion by entering an injunction sua sponte and challenging the scope of the injunction.