Crocs’ design isn’t new, according to the General Court

On 14 March, the EU General Court ruled on case T-651/16 between the Crocs company, of the one part, and the European Union Intellectual Property Office (EUIPO) and the Gifi Diffusion company, of the other. The decision had a considerable echo, having declared the invalidity for prior disclosure of the applicant’s well-known clogs.

These are the facts underlying the dispute. In November 2004 the Western Brands LLC company, claiming the priority of the application filed in the United States of America on 28 May 2004, filed an application with EUIPO for the registration of the footwear design in question (see below). The design was registered as a Community design (no. 257001-0001) on 8 February 2005. On 3 November 2005, the Community design was transferred to Crocs.

Gifi Diffusion filed an application with EUIPO against this registration. It argued that the contested design lacked novelty because, in its opinion, it had been disclosed prior to 28 May 2003. As known, pursuant to Council Regulation (EC) no. 6/2002, a Community design shall be protected to the extent that it is new and has individual character; the latter requirement wouldn’t exist if the design had been disclosed to the public prior to the 12-month period preceding the date of priority (28 May 2004), except where the disclosure could not reasonably have become known in the normal course of business to the circles specialised in the sector concerned operating within the European Union (Article 7).

By decision of 6 June 2016, EUIPO declared the contested design invalid, confirming the prior disclosure and so the lack of novelty. According to EUIPO, in fact, Gifi Diffusion had adequately shown that the disclosure of the design had taken place prior to the US registration. In particular, the clogs corresponding to the contested design had been displayed on the applicant’s website accessible worldwide, they had been exhibited – achieving resounding success – at the Fort Lauderdale Boat Show in Florida and, not least, they had been put on sale through a distributor and several retailers in the United States. According to EUIPO, the product corresponding to the design had thus become known to the circles specialised in the sector operating within the European Union.

Crocs appealed the decision before the General Court, stating that these (uncontested) disclosures could not have become known in the normal course of business to the circles specialised in the sector concerned (i.e. professionals in the manufacture and trade of footwear) operating within the European Union.

In the decision at issue, the General Court first reminded that “in order to assess whether disclosure events could not reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the European Union, it must be examined whether, on the basis of the facts which must be adduced by the party challenging the disclosure, it is appropriate to consider that it was not actually possible for those circles to be aware of the events constituting disclosure, whilst bearing in mind what can reasonably be required of those circles in terms of being aware of prior art”.

Based on that case law, the General Court dismissed Crocs’ appeal, considering that its defences were unable to deny the conclusions of EUIPO and that they weren’t adequately demonstrated. In particular, in absence of any evidence, the argument invoked by the applicant alleging that it was “unlikely” that European operators would find the Crocs website in their normal course of business was found not acceptable, as the website was accessible worldwide and Crocs didn’t demonstrate a lack of internet traffic originating from the EU. In the absence of contrary evidence, it was also considered difficult to imagine that the exhibition at the Fort Lauderdale international fair – which, in the applicant’s own words on its website, had been a great success – wasn’t attended by European exhibitors or visitors. Finally, the very fact that the clogs were put on sale in a large number of American states made it unlikely that they were unnoticed by the European operators, given also the importance for the EU market of commercial trends on the US market.

Finally, the General Court rejected the applicant’s argument that according to Article 7(1) of the Regulation, only a disclosure so widespread so as to overcome a certain quantitative hurdle would preclude the novelty of the design, for knowledge of the EU circles specialised. In this regard, the General Court observed that “that provision provides no quantitative threshold with regard to actual knowledge of the disclosure events”.

In conclusion, the General Court confirmed the EUIPO decision, with a judgement that Crocs has already challenged before the EU Court of Justice. To date, case C-320/18 P is pending.