By Gabriel Castilla, Head of Engineering and Software | PONS IP Patent Department

The decision issued by the EUIPO Board of Appeal regarding the validity in the European Union of the well-known design of Crocs, Inc. identified as registered design 000257001-0001, upholding the decision of the invalidity division to declare the design invalid in view of the application for a declaration of invalidity filed by the Spanish company Gor Factory S.A.

This Crocs rubber clog is one of hundreds of designs that the US company has registered for this famous footwear over recent years, which has been a sales success in more than 90 countries with millions of units sold.

More specifically, the design registered on 22-11-2004 with the EUIPO covers one of Crocs’ most popular products, which is characterised by its closed, rounded toe, multiple circular holes on the upper surface and the incorporation of an articulated rear strap that can be used as an element to hold the foot in place at the heel.

This design has been the subject of a dispute for years between Holey Soles Holding and Crocs, Inc., which began when the former filed an application for a declaration of invalidity with the EUIPO, claiming that the design was invalid due to lack of individual character, using as evidence for its claim, among other things, the prior disclosure of very similar footwear that appeared on Crocs, Inc.’s own website. This design was disclosed in 2002 and was therefore available to the public before the 12-month grace period established by design regulations.

The decision of the EUIPO’s Cancellation Division in 2007 was to declare the design invalid, a decision that was appealed by Crocs Inc. before the EUIPO with the same result, as the appeal was dismissed and the invalidity upheld. However, this decision was again appealed before the General Court of Luxembourg, where it was also dismissed, finally ending up before the European Union Court of Justice, before which, curiously and after years of controversy, both companies reached an agreement in 2020, whereby Holey Soles Holding withdrew the application for a declaration of invalidity originally filed and, accordingly, the validity of the design was upheld.

Now, however, we find ourselves facing a new challenge to the validity of the Crocs design from Gor Factory, S.A., based in Fortuna (Murcia), which in 2022 filed an application for a declaration of invalidity based on the prior disclosure of a photograph of an earlier clog, shown on a website dated 13 April 2003 (curiously, this is a website belonging to Holey Soles Holding). In this disclosure, we can see that the earlier clog accurately reproduces the proportions and geometry of the Crocs design and incorporates the same circular and trapezoidal holes in the same locations but does not incorporate the rear strap that is featured in the Crocs design.

The decision of the EUIPO Cancellation Division issued in this regard on 22-01-2024 was to declare the contested design invalid on the grounds that it lacked individual character in relation to the earlier design, basing its decision on the fact that the earlier clog is almost identical to the contested design.

This decision was appealed by Crocs, Inc. on the grounds that a perceptible difference between the compared designs is determined by the presence of the aforementioned heel strap in the contested design, since it considers that the presence or absence of a heel strap is an obvious and conscious factor in the informed user’s purchasing decision, which in its opinion gives rise to different overall impressions.

In response to the allegations made by the design owner, the applicant for invalidity put forward a series of arguments to be considered in the analysis of the individual character of a design, and the subsequent opinion of the Board of Appeal is in line with that of Gor Factory, S.A., emphasising that the comparison of the overall impressions produced by the designs should not be limited to an analytical listing of similarities and differences, but must take into account their overall combination, and that the difference of a single feature, the strap, even if noticed by the informed user, will be of lesser importance than the other identical features and cannot prevail over the similarities.

The recent decision of the Board of Appeal in February this year was therefore to dismiss the appeal and uphold the invalidity of Crocs, Inc.’s design on the grounds of lack of individual character.

As we can see, all these arguments are subject to a certain degree of subjectivity and the EUIPO follows very defined guidelines or a process that takes into account a number of aspects such as the freedom of the designer when designing the design in question, the saturation or otherwise of this type of design at the date of filing of the contested design, the degree of perception of the informed user depending on what type of people identify themselves as informed users of these products, in short, a whole series of issues to be considered in order to reach, in the case of Holey Soles Holding v Crocs Inc., a decision, shared by three different instances, declaring the invalidity of Crocs’ design. However, it is striking that all this comes to nothing when the parties reach an agreement and thus declare the validity of a design that has been repeatedly shown in lower courts to lack individuality.

Now Gor Factory, S.A. is challenging Crocs, Inc.’s design on the basis of the existence of an earlier design which, in my opinion, has many similarities with the contested design and clearly affects its individual character. However, given Crocs, Inc.’s attitude in the previous dispute with Holey Soles Holding, it is to be expected that the process will follow the same course, Crocs, Inc. will appeal this decision, and if the case ends up in the European Union Court of Justice, it is very likely that Crocs, Inc. will reach an agreement with the Murcian company to save its design, as it did previously.

This practice of reaching an agreement between the parties before the court, with the subsequent absence of a ruling by the court on the validity of the design, raises questions about the legal certainty offered by the European Union to manufacturers in the sector and to the design owner, especially when there have been a number of previous rulings on the invalidity of the design. We will see whether the Murcian company takes up the challenge of seeing the case through to the end, and refuses to negotiate and obtains a decision that puts an end to Crocs, Inc.’s monopoly on the design.