Is the End of Crocs Really Upon Us? Not So Fast.

Following a years-long dispute with rival footwear maker USA Dawgs, Crocs has lost a key design patent in its arsenal of legal protections, leaving no shortage of fashion and footwear sites to question whether this is the beginning of the end for ugly-but-popular footwear brand. Chances are: While Crocs, which recently made moves into the fashion industry thanks to a collaboration with Christopher Kane, has lost the latest round in a battle over its clogs, such a conclusion is not yet warranted. 

Background

Crocs first initiated its legal battle involving Las Vegas-based USA Dawgs in 2006, shortly after the U.S. Patent and Trademark Office (“USPTO”) issued Crocs a design patent (No. D517789) for its famous clog style shoe. Colorado-based Crocs filed a patent infringement lawsuit against USA Dawgs’ Canadian affiliate Double Diamond, and then in 2012, amended that complaint to add USA Dawgs as a defendant.

USA Dawgs responded by filing a suit of its own (in addition to the counterclaims it made in the aforementioned suit filed by Crocs) in August 2016, accusing Crocs and nearly 20 of its current and former executives of fraudulently obtaining patents and filing unmerited lawsuits in order to dominate the market for the clog-type footwear. 

a drawing from Crocs' D517789 patent

a drawing from Crocs' D517789 patent

In particular, USA Dawgs alleged that Crocs defrauded the USPTO by claiming that its founder Scott Seamans was the sole inventor associated with patents on the footwear, which USA Dawgs claims is far from the truth and part of a larger conspiracy scheme that has “resulted in the unjust enrichment of [Crocs] by more than $350 million.”

As Law360 reported at the time, according to USA Dawgs’ complaint, “Seamans erroneously claimed to have been the sole inventor of the Crocs molded clog when, in fact, similar footwear had already been on sale for several years. Crocs has been unable to obtain patents for the shoes outside of the U.S. primarily because of the existence of the prior sales, the complaint says.”  

“The conspirator defendants conceived of and implemented a multifaceted anti-competitive scheme to exclude all of Crocs’ actual and potential competitors, including Dawgs, from this growing and lucrative market,” USA Dawgs further stated in its complaint.

Crocs’ Patents

Fast forward a year and the USPTO's Patent Trial and Appeal Board (“PTAB”) held that the design central to Crocs’ most famous footwear style is not original enough to warrant design patent protection. Yes, this week, the PTAB held that Crocs’ design patent, which extends to the ornamental design of the clog, is invalid, as a similar footwear design was published more than one year before Crocs applied for its patent.

Note: In order to be eligible for design patent protection, a design must be useful, new (novel) and not obvious to those who work in the field of design (nonobvious). Moreover, the design must not have been "disclosed" to the public prior to the application for the patent.  

Crocs has announced that it will, in fact, appeal the PTAB’s decision. A spokesman for the company stated, “Crocs is aware of the decision issued by the United States Patent and Trademark Office relating to one of its many design patents.  The decision, which is simply the next step in the administrative process, allows Crocs to appeal to the Patent Trial and Appeal Board and eventually the Federal Circuit Court of Appeals. This is the same court that previously ruled in Crocs’ favor in its enforcement of the same patent during its successful International Trade Commission case.”

The company’s rep further noted, “Crocs is confident that the appeals process will result in a favorable ultimate outcome and allow it to continue to use this design patent, along with its many other intellectual property rights, to defend its iconic products well into the future. In the meantime, Crocs will continue to aggressively enforce its intellectual property portfolio against those who unfairly trade off of Crocs’ goodwill and reputation.”