Crocs Could Lose Design Protection for Its Clogs in Europe — and Things Aren’t Looking Great in the US, Either

Update: Crocs Responds to EU Ruling

“Crocs is aware of decisions issued by the EU General Court relating to two of our many Registered Community Designs.  The decisions are not final and Crocs is considering further appeal options where appropriate.  One decision relates to the decision-making procedures of the EU IP Office and does not call into question the Registered Community Design at issue.  The second decision relates to validity challenges against a legacy Registered Community Design which have been ongoing for the last ten years.  Crocs’ business has not been significantly impacted by this ongoing issue during that period and it is not expected that the latest decision will have any immediate material adverse consequences for Crocs,” the brand said in a statement to FN.  “It’s important to remember that the Registered Community Designs at issue remain valid and enforceable during the further appeals process, which can take many years to complete.  Throughout, Crocs will continue to be a world leader in innovative casual footwear, inspiring our customers to express their one-of-a-kindness and to be comfortable in their own shoes.  We will continue to aggressively enforce our intellectual property portfolio against those who unfairly trade on Crocs’ goodwill and reputation, and we remain unapologetically optimistic about our present and future.”

What We Reported Earlier

The Crocs Inc. trademark imbroglio is heating up and crossing continents.

The lightweight clog maker — which is currently embroiled in several legal battles in the U.S., including one that could put its trademark patent in serious jeopardy — was dealt a blow by an EU court last week.

The court upheld a June 2016 decision by the European Union Intellectual Property Office, which had declared that Crocs’ design registration was invalid because it lacked novelty. Based on EUIPO regulations, a design can be held as invalid if the entity seeking to protect it discloses the design prior to the 12-month period preceding its registration for a U.S. design patent. (An exception, however, is if disclosure of the design could not “reasonably have become known in the normal course of business” to those that specialize in the same sector — such as footwear — in the EU.)

In March 2013, Gifi Diffusion — a French retailer of consumer goods such as kitchen appliances, furniture, toys and accessories —  filed an application with the EUIPO contesting Crocs’ EU design registration. The company claimed that Crocs displayed its clog design in November 2002 at a boat show in Fort Lauderdale, Fla. — two years prior to its application to register it with the U.S. Patent & Trademark Office. Gifi Diffusion said Crocs also sold 10,000 clogs prior to seeking to register the design.

In February 2014, the Invalidity Division dismissed Gifi Diffusion’s request on the grounds that it had not proved that Crocs had disclosed the designs prior to the appropriate period. But that decision was annulled by the EUIPO in June 2016 when Gifi Diffusion presented “better versions” of its previous evidence and the board concluded Crocs’ design to be invalid.

In upholding the previous ruling of EUIPO’s appeal board, the EU court last week rejected Crocs’ requests to sustain its design registration and ordered the brand to pay its own court costs as well as those incurred by the EUIPO and Gifi Diffusion. (The court also rejected Crocs’ attempts to argue that those specializing in the footwear sector in the EU could not have reasonably become aware of its design prior to seeking protection, citing, among other things, the brand’s website, which is “technically accessible worldwide.”)

The decision followed another series of losses for Crocs in the U.S. — where it has vigorously defended its signature patent against several competitors, including USA Dawgs, against which it has been litigating for years.

In August 2017 — following a five-year legal battle that had seen the two duel it out over claims of trademark infringement involving the D517789 patent — the USPTO issued its third and final rejection of Crocs’ cornerstone patent.

“For us, this is quite significant — this is a testament and endorses what our position has been all along,” Dawgs CEO Steve Mann told FN of the ruling at the time.

In rejecting Crocs’ ’789 patent as invalid, the USPTO found that a similar design was published more than one year before Crocs applied for it. Over the course of Crocs and Dawgs’ legal dispute, the patent had already been rejected twice before. But this time it could be deemed more significant, as a third rejection is final and nonappealable through the USPTO.

Still, Crocs told FN that it planned to appeal the USPTO’s ruling to the Patent Trial and Appeal Board and eventually the Federal Circuit Court of Appeals, if necessary.

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