Whilst Crocs may well be a divisive sartorial choice (their 2005 launch was accompanied with the message “ugly can be beautiful”), there is no doubt that they have been popular with consumers (and also the occasional celebrity).
Notwithstanding their ability to polarise, Crocs have endured in what is a very fickle and fast paced market. The then-owner of the Crocs design must have anticipated their mass appeal as, in November 2004, it filed an application to register it as a community design (Community Registered Design) so as to prevent unauthorised exploitation of the design. That application claimed priority from a US design, filed in May 2004 (the priority date), and the design was registered the following February.
Validity of Community Registered Design
In 2013, French company Gifi filed an application for a declaration that the Crocs Community Registered Design was invalid. Gifi argued that the Community Registered Design was invalid as it was not ‘new’ at the priority date (one of the requirements for a valid Community Registered Design) as the design had appeared on the Crocs website since 2002, physical products had been exhibited in 2002 in Florida, with 10,000 pairs having been sold that year.
Each of these instances fell outside the 12 month grace period available in the event of early disclosure – had these events taken place in May 2003, the design would have remained valid.
Consequently, Crocs sought to defend the application on the basis that all prior disclosures had taken place in the US and so those events could not reasonably have become known in the normal course of business of those operating within that sector, within the EU. If they could demonstrate this, the application for the declaration of invalidity would necessarily fail.
Crocs lost at first instance (before the Invalidity Division of the EUIPO) and subsequent appeals led to Court of Justice of the European Union.
The CJEU found that the disclosures did invalidate the Community Registered Design – the website was accessible worldwide and the expert evidence did not confirm that the use of ‘crocs’ as a search term would not, at the relevant time, have found the Crocs website. Further, the CJEU considered that the exhibition, whilst situated in Florida, was an important one for the industry and would likely have been on the radar of the relevant people in the EU.
Finally, whilst the 10,000 pairs sold had only been sold in the US, on the evidence, the CJEU found that it would be unlikely that such widespread sale would not have come to the attention of interested parties in the EU.
The Community Registered Design was therefore invalid. Crocs cannot rely on it to prevent competitors from selling or otherwise exploiting the design.
Summary
The value of a Community Registered Design to a business should not be underestimated. Enforceable for 25 years, they can be used to prevent unauthorised dealings in identical designs, or those which differ in only minor respects, such that they do not produce a different overall impression. That remains the case even if the design has not been copied. Consequently, a Community Registered Design can be an extremely effective weapon to protect a business’s products.
However, this case is a salutary reminder that the registration of a community design is not a guarantee of protection. Unlike other forms of registered IP, the registration process does not include an examination of prior art and so previous designs (even if – unlike this case – the owner of the Community Registered Design is unaware of them) may creep out of the woodwork to cause problems at a later date.
The lesson for those who want to protect their designs is to think very careful about the timing of the application within the process of taking a product to market. On the flip side, if you ever receive a letter alleging that you have infringed a design right, it is always worth bearing in mind that, just because a design is registered, it is by no means certain that it will be enforceable.
How Nelsons Can Help
If you have any queries in relation to the topics discussed in this blog, please contact our Intellectual Property team on 0800 024 1976 or via our online form.