In Crocs Inc v Holey Soles Holdings Ltd R 9/2008-3 Third Board of Appeal, the Third Board of Appeal of The Office of Harmonization for the Internal Market has dismissed an appeal by Crocs Inc against the Cancellation Division's decision that a Crocs' Community design was invalid. The Board found that design lacked individual character and novelty.
Holey Soles Holdings Ltd sought a declaration of invalidity on the grounds of individual character and that the design lacked novelty, as it had been disclosed at an exhibition and online and sold before commencement of the applicable grace period. Holey Soles also argued that the heel strap of the design was functional and therefore could not be the subject of exclusive rights.
The Cancellation Division declared the design invalid on the grounds that it lacked individual character when compared to two previous designs (which had appeared on Crocs' own website). Crocs appealed, arguing that the previous designs could not reasonably have become known to the relevant circles as required by Article 7(1) of the Regulation.
The Board decided that Crocs' arguments that its disclosures could not reasonably have become known to the specialised circles in the sector were unpersuasive. The disclosures had been carried out over a period of time and were "precisely the sort of activities that may become known 'in the course of business' to anybody active in the same field". Each of the three disclosures (the sales, the exhibition and online) destroyed the novelty of the design. With regard to sales, the Board stated that the correct test was whether the sales could reasonably have become known to the relevant circles in the Community, not the volume of sales as suggesed by Crocs.
The Board found that the addition of the strap was not sufficient to give the clog individual character. The strap did not alter the overall impression made on the informed user; the fact that it could be rolled forward constituted evidence that it was purely functional.
THIRD PARTY INFRINGER
Partenaire Hospitalier International (PHI), a French company that imported clogs from China, had requested permission to be joined to the proceedings under Article 54 of the Regulation as Crocs had arranged for French Customs to seize its PHI’s clogs. Crocs argued that Customs seizure measures did not constitute "proceedings for infringement". The Board stated that Article 54 does not say that "proceedings for infringement" must be judicial in nature, so included Customs seizure measures.