In March 2018 the General Court held that the Registered Community Design No 257001-0001 owned by Crocs, Inc was invalid as it was lacking in novelty on the basis of prior disclosures of its design.

A proprietor of a Registered Community Design (RCD) right has a 25 year monopoly on its design which gives them the right to sue for infringement even where a defendant does not copy the design.

For the RCD to be valid it has to be novel and have ‘individual character’ over the state of the art.

Novelty

The RCD must be new, and an identical design, or a design differing only in immaterial details must not have been made available to the public before the filing date of the application for the RCD.

However, unlike in patent law, if a prior disclosure of the design could not reasonably have become known in the normal course of business of the circles specialised in the sector concerned, operating within the European Union, it would not destroy novelty.

Crocs Inc.’s (Crocs) above RCD was registered on 22 November 2004. In 2013, Gifi Diffusion filed an application of invalidity claiming that Crocs Inc.’s RCD lacked novelty on the basis of three prior disclosures made by Crocs more than 12 months before the priority date of the design at:

  • an exhibition at a boat show in Fort Lauderdale, Florida (USA);
  • the sale of 10 000 pairs of clogs; and
  • on its website crocs.com.

Appeal to the General Court

The Board of Appeal of the EUIPO held that the RCD was invalid as it lacked novelty. Crocs appealed the decision:

  1. on the basis that certain evidence used was not admissible, and
  2. that the disclosures could not have become reasonably known in the normal course of business to the circles specialised in the sector concerned operating within the Europe.

The General Court dismissed the arguments in relation to i). In relation to ii) Crocs argued that awareness of the disclosures in the EU was highly unlikely and further submitted that they could not be expected to prove a negative fact i.e. that the disclosure had not become known to the circles specialised in the sector concerned, operating within the EU.

The Board of Appeal found that the ‘circles specialised in the relevant sector’ were professionals in the trade and manufacture of footwear. It also held that it was the party challenging the disclosure to rebut the presumption that the circumstances of the case could prevent the disclosure from becoming known in the relevant circles.

The Court held that the relevant facts may include the composition of the specialised circles, their qualifications, customs and behaviour, the scope of their activities, their presence at events where designs are presented, the characteristics of the design at issue such as its interdependency with other products or sectors and the characteristics of the products into which the design at issue has been integrated, including the degree of technicality of the products concerned.

Crocs argued that its website was not accessible in the normal course of business to the circles specialised in the sector concerned in the EU. It relied on two expert reports that its website could not be found using search engines by searching the words “shoe”, “clog”, or “footwear”.

The Court stated that it was not apparent from the expert reports that the Crocs’ website was not included in the search results following a search for the word “Crocs”. Furthermore, the Court held that the Crocs’ website could have become known to the relevant circles such as during the exhibition at the Fort Lauderdale Boat Show or through the sale of the Crocs clogs.

As the Fort Lauderdale Boat Show is an important international event in the nautical sector, it was unlikely that EU professionals from the footwear industry could not have become aware of the Crocs clog. Crocs had later reported on its own website that their clogs had been a “smashing success” at the Fort Lauderdale Boat Show.

As to the sale of clogs to the design, the Court was presented with evidence that the clogs were sold in several states in the USA and that it was unlikely, given the importance for the EU market, that it went unnoticed by the relevant circles in the EU.

Decision

The General Court therefore held that Crocs had failed to establish the requisite legal standard that the three disclosure events could not have become known in the normal course of business to the circles specialised in the sector concerned, within the EU, and held that the RCD was invalid.

The Court further noted that whilst it is correct that Crocs could not have proved a negative fact, they could have shown positive proof that though their website is accessible to the entire world, that there was no, or very little actual traffic from users in the EU; that the Fort Lauderdale Boat Show was not attended by participants from the EU; or that athough there was a retail network for the clogs to be sold, that no orders had been placed using that network.

Comments

Designers wishing to file an RCD have a 12 month period during which they may test their product on the market before it is necessary to apply for the RCD.

This case is a reminder that it is best to file an application for a design well within the 12 month period of the first disclosure of the design to the public in order to preserve the designer’s rights in any future RCD.