Skechers Scores Major Victory in Trademark Dispute with Converse in Ruling by the United States International Trade Commission

• ITC Invalidates Converse’s Registered and Common Law Trademarks in
  the Chuck Taylor Midsole Design
• ITC Finds Skechers’ Twinkle Toes and Bobs Shoes Would Not Infringe
  in Any Event

MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–SKECHERS USA, Inc. (NYSE:SKX),
a global footwear leader and the second largest athletic footwear brand
in the United States, today announced that the International Trade
Commission (“ITC”) has found that Converse’s registered and common law
trademarks in the Chuck Taylor midsole design are invalid; that
Skechers’ Twinkle Toes and BOBS shoes would not infringe Converse’s
claimed trademarks, even if the trademarks were valid; and that Skechers
can continue importing and selling its Twinkle Toes and BOBS shoes in
the United States.

In October 2014, Converse sued Skechers in federal district court and in
the ITC alleging that the Company’s well-known Twinkle Toes and BOBS
product lines infringed Converse’s registered and common law trademarks
in the Chuck Taylor midsole design. The case went to trial before the
ITC in August 2015.

In a November 17, 2015 opinion, the Chief Administrative Law Judge of
the ITC, the Honorable Charles E. Bullock, ruled that Skechers’ Twinkle
Toes and BOBS product lines do not infringe Converse’s trademarks for
the Chuck Taylor midsole. In so ruling, the Judge noted that both of the
Skechers product lines feature prominent branding and that the Twinkle
Toes line contains design features that “create enough differences that
the shoes bearing them cannot be said to be similar to [the Chuck
Taylor].” The Judge also stated that the survey evidence concluded that
there was no likelihood that consumers would confuse the Skechers
Twinkle Toes and BOBS designs with those of Converse’s Chuck Taylor
designs. In addition, the Judge ruled that Converse has no common law
trademark rights in the Chuck Taylor midsole because the design is not
distinctive, not famous, and has failed to acquire secondary meaning.
These portions of the Judge’s opinion were affirmed by the ITC.

The Judge also ruled that Converse’s registered trademark for the Chuck
Taylor design is valid. However, this portion of the Judge’s opinion was
reversed by the ITC, which invalidated Converse’s registered trademark
along with Converse’s common law trademark.

The ITC thus concluded that there was no violation by Skechers of
Converse’s asserted midsole trademarks and the ITC did not issue an
exclusion order against Skechers or any of Skechers’ products.

“We are pleased that the ITC invalidated Converse’s claimed trademarks
in the Chuck Taylor midsole design,” stated Michael Greenberg, president
of Skechers. “Countless companies, including Skechers, have used the
same midsole design in canvas court-style sneakers for decades.” “We are
also pleased that the ITC affirmed Judge Bullock’s conclusion that the
Twinkles Toes and BOBS designs are distinctively different from the
Chuck Taylor, and that there is no likelihood that consumers would ever
confuse either Twinkle Toes or BOBS products with the Chuck Taylor. The
decision further recognizes that Skechers investment in our distinctive
designs and brand identity has helped build Twinkle Toes into a number
one shoe line for young girls, and both Twinkle Toes and BOBS into
household names synonymous with Skechers – not with Converse or any
other brand.”

Skechers is represented in the matter by Morgan Chu, Samuel Lu, Jane
Wald, Melissa Rabbani, and Grace Chen of Irell & Manella; Jeffrey Barker
of O’Melveny & Myers; and Barbara Murphy of Foster, Murphy, Altman &
Nickel.

About SKECHERS USA, Inc.
SKECHERS
USA, Inc., based in Manhattan Beach, California, designs, develops and
markets a diverse range of lifestyle footwear for men, women and
children, as well as performance footwear for men and women. SKECHERS
footwear is available in the United States and over 160 countries and
territories worldwide via department and specialty stores, more than
1,410 SKECHERS retail stores, and the Company’s e-commerce website. The
Company manages its international business through a network of global
distributors, joint venture partners in Asia, and wholly-owned
subsidiaries in Brazil, Canada, Chile, Japan, Latin America and
throughout Europe. For more information, please visit skechers.com
and follow us on Facebook (facebook.com/SKECHERS)
and Twitter (twitter.com/SKECHERSUSA).

This announcement contains forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include,
without limitation, the Company’s future domestic and international
growth, financial results and operations including expected net sales
and earnings, its development of new products, future demand for its
products, its planned domestic and international expansion and opening
of new stores, the completion of the expansion and upgrade of the
Company’s European distribution center, and advertising and marketing
initiatives. Forward-looking statements can be identified by the use of
forward looking language such as “believe,” “anticipate,” “expect,”
“estimate,” “intend,” “plan,” “project,” “will be,” “will continue,”
“will result,” “could,” “may,” “might,” or any variations of such words
with similar meanings. Any such statements are subject to risks and
uncertainties that could cause actual results to differ materially from
those projected in forward-looking statements. Factors that might cause
or contribute to such differences include international economic,
political and market conditions including the uncertainty of sustained
recovery in Europe; entry into the highly competitive performance
footwear market; sustaining, managing and forecasting costs and proper
inventory levels; losing any significant customers; decreased demand by
industry retailers and cancellation of order commitments due to the lack
of popularity of particular designs and/or categories of products;
maintaining brand image and intense competition among sellers of
footwear for consumers; anticipating, identifying, interpreting or
forecasting changes in fashion trends, consumer demand for the products
and the various market factors described above; sales levels during the
spring, back-to-school and holiday selling seasons; and other factors
referenced or incorporated by reference in the Company’s annual report
on Form 10-K for the year ended December 31, 2015 and its quarterly
report on Form 10-Q for the quarter ended March 31, 2016. The risks
included here are not exhaustive. The Company operates in a very
competitive and rapidly changing environment. New risks emerge from time
to time and the companies cannot predict all such risk factors, nor can
the companies assess the impact of all such risk factors on their
respective businesses or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, you should not place undue reliance on forward-looking
statements as a prediction of actual results. Moreover, reported results
should not be considered an indication of future performance.

Contacts

SKECHERS USA, Inc.
Jennifer Clay
VP of Corporate Communications
310-937-1326