2024 Federal Circuit IP Appeals – Crocs, Inc. v. Effervescent, Inc., 119 F.4th 1 (Fed. Cir. 2024) (Reyna, Cunningham, Albright)

Crocs sued a number of defendants, including Dawgs, for patent infringement. Dawgs counterclaimed, alleging that Crocs was liable for false advertising in violation of Section 43(a) of the Lanham Act. Dawgs alleged that Crocs’ use of words like “patented,” “proprietary,” and “exclusive” to describe the Croslite material in its footwear products misled customers to believe that, by comparison, other companies’ footwear products are made of inferior material. Crocs moved for summary judgment that Dawgs’ counterclaim failed as a matter of law. The district court agreed, holding that the terms “patented,” “proprietary,” and “exclusive” were claims of “inventorship,” so Dawgs’ claims were directed to a claim of false designation of authorship of the shoe products and not the nature, characteristics, or qualities of Crocs’ products.

The relevant portion of the Lanham Act states that it is a violation to “in commercial advertising or promotion, misrepresent[] the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” On appeal, Crocs conceded that its statements that the material in its footwear was covered by a patent are false. So the only issue was the legal question whether such false statements violate the Lanham Act.

The Federal Circuit concluded that they do. The court ruled that the district court’s determination that likened falsely claiming to have “patented” something as akin to claims of authorship was improper. It reasoned that Dawgs’ argument was not that Crocs misrepresented the origin or authorship of its products—but that it misrepresented the nature, characteristics, or qualities of its products and Dawgs’ products. The Federal Circuit held that such misrepresentations fall within the scope of Section 43(a)(1)(B) of the Lanham Act and reversed.

This article appeared in the 2024 Federal Circuit IP Appeals: Summaries of Key 2024 Decisions report.