Crocs, Inc. v. ITC: Federal Circuit Rules for Crocs on Appeal in ITC Patent Dispute

Crocs, Inc. v. ITC, Appeal 2008-1596 (Fed. Cir. Feb. 24, 2010)

Slip Opinion

On February 24, 2010, the U.S. Court of Appeals for the Federal Circuit reversed and remanded a patent decision by the U.S. International Trade Commission concerning Crocs shoes. In what has become a trend in high-profile design patent cases, Judge Rader provided guidance on claim construction and the application of the ordinary observer test. Rader held that Crocs’ utility patent No. 6,993,858 (“the ’858 patent”) was not obvious and that the three other companies remaining in the litigation did in fact infringe Croc’s design patent No. D517,789 (“the ’789 patent”). The Federal Circuit remanded the case to the ITC to determine appropriate remedies.

The case arose in 2006 when Crocs, the maker of colorful plastic clog footwear, sued eleven companies for allegedly copying its shoe designs. Three companies remain in the litigation: Double Diamond Distribution, Ltd., the maker of Dawg shoes; Holey Soles Holdings, Inc.; and Effervescent, Inc., which makes Waldies Comfy Clogs. The ITC had held that Crocs’ ’858 patent for “breathable footwear pieces” was invalid for obviousness and that the companies did not infringe the ’789 patent because there were only “minor differences.” On appeal, the Federal Circuit reversed.

Inventive Step blog provides a legal analysis of the court’s decision, Law.com provides a summary of the case, and David Musker of Class99.com offers a brief overview of Judge Rader’s decision.

Unlike claims for utility patents, design patents are not listed by numbered paragraphs. Instead, the patent consists of various views of the design in drawings. In order to perform claim construction of the patents, courts generally offer verbal descriptions of the drawings. Judge Rader expressed his disapproval for this method, warning “that misplaced reliance on a detailed verbal description of the claimed design risks undue emphasis on particular features of the design rather than examination of the design as a whole.” In this case, the written description of the drawings construed the patent as requiring (1) a strap of uniform width and (2) evenly spaced holes around the sidewall of the upper side of the shoes. But according to the Federal Circuit, the drawings required neither of these elements.

Applying the ordinary observer test, the Federal Circuit found that the differences between the shoes were too minor to bar infringement. Rather, the court held that an ordinary observer would not be able to differentiate between Crocs and the accused infringers. Writing for the three-member panel, Judge Rader stated, “In one comparison after another, the shoes appear nearly identical.” The Federal Circuit also reversed the ITC’s claim that Crocs’ own products were not covered by the patent, with Judge Rader arguing that this finding too was based on erroneous claim construction. The Court also found that Crocs’ utility patent was not invalid for obviousness. The case was remanded back to the ITC for further proceedings to determine whether the utility patent was infringed as well as any “appropriate remedies.”

Significantly, the Federal Circuit emphasized the ordinary observer test – the potential for consumer confusion – over the written claims of the design patent. The decision is filled with side-by-side comparison drawings and photos of the colorful shoes to demonstrate the striking similarity among the various clogs. This method follows a line of cases including Egyptian Goddess, Inc. v. Swisa, Inc. that place significant emphasis on the ordinary observer test in resolving design patent disputes. After the decision came forth, a spokeswoman for Crocs, Tia Mattson, said the company is “pleased with the ruling and will evaluate and determine which actions to take from here.”