What a Croc up! Crocs' EU design revoked

Love them or hate them, Crocs footwear has been popular since its launch in 2002 with a number of celebrity endorsements. For six consecutive years, the brand generated more than $1 billion in sales, selling 50 million pairs a year. When Prince George was photographed wearing them in 2015, sales on Amazon were said to have soared by 1,500%. Recently, the company has experienced another resurgence in popularity, with designs featuring on fashion runways and collaborations with top fashion houses. Inevitably, this popularity has led to a number of copycat designs.

Crocs originally registered the design back in 2005 in the European Union. However, French retailer Gifi Diffusion challenged that registration in 2013, filing representations at the EUIPO stating that the designs had already been sold for more than two years prior to that registration. The EUIPO revoked the design, noting that the firm had not registered its design within the 12-month grace period required. Designs musts be registered at the relevant national patent and trademark office, within a set period from it first being marketed (generally 12 months) in order to be eligible for protection. Crocs appealed the decision unsuccessfully, with the General Court of the European Union upholding EUIPO’s decision in a ruling yesterday (14 March 2018).

The ruling represents another blow for Crocs, which has been fighting design infringements for a number of years. In 2017, the USPTO also rejected one of Crocs’ key designs following a five-year dispute with retailer USA Dawgs. During the course of the proceedings, a similar design was revealed that was applied for a year prior to Crocs’ own application. Accordingly, the USPTO held that the design lacked originality.

In 2010, the Board of Appeal at EUIPO (then OHIM) dismissed an appeal by Crocs when the IP office’s Cancellation Division held that one of its design registrations was invalid, lacking individual character and novelty, following an action brought by Holey Shoes Holdings Ltd.

In 2006, the company had actions pending against Shaka Holdings, Inc in the US, both at the federal court in Colorado and the International Trade Commission. The companies settled for an undisclosed amount.

Protecting designs: beware common traps
The case is a good reminder that brand owners should avoid sharing their designs with third parties, or disclosing /advertising them prior to seeking registration for the design. While registries rarely examine applications to ensure that they are filed within the 12-month period, it makes the registration very vulnerable to revocation action and vastly reduces the security that a registration can provide.

Crocs continues to state that it will aggressively enforce its IP portfolio against any company seeking to trade off its goodwill and reputation. However, many of its design registrations could remain vulnerable to cancellation and attack, making it much more difficult for the company to battle copycats.

The full decision of the General Court can be read here.

Claire Jones is a Trademark Attorney at Novagraaf in London

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