Love them or not, a recent European court decision could lead to an influx of low cost mimics of the iconic CROCS footwear style.
The General Court of the European Union (GC) has ruled that because of prior disclosure by the company, Crocs Inc's registered Community design for its famous boat shoe style (the RCD), was invalid, meaning that Crocs may face a significant struggle in preventing third party look-a-likes.
Generally, a design must be novel at the filing date of the application but, in many jurisdictions, the designer is afforded a grace period whereby disclosures in the year prior to the filing date by the designer will be disregarded for the purposes of assessing novelty. Therefore, a design can still be registered even where the applicant has disclosed the design during the grace period.
However, if the application is made after this grace period has expired (i.e. after 12 months from the disclosure), the design will be vulnerable to the objection that it lacks novelty – unless the applicant is able to claim priority from an earlier and identical design registered in another jurisdiction.
Crocs' RCD claimed a priority date of 28 May 2004 from a US design; therefore, taking into account the grace period, any qualifying disclosure of the design before 28 May 2003 could have invalidated its registration.
The GC had to decide whether the following points surrounding Crocs' disclosure of the design of its shoe constituted a novelty-busting disclosure:
- publication of the design on its own website in 2002
- exhibition of the shoe at the Fort Lauderdale International Boat Show in 2002
- sale of shoes through a distribution network in the USA from 2002.
The GC also had to decide whether Crocs could rely on an exception to the general rule, namely, if Crocs could demonstrate that the prior disclosure of the design could not reasonably have become known in the normal course of business to the circles specialised in the sector concerned who are operating within the European Union.
Crocs claimed that any prior disclosure by it had been limited to the USA and that, to the extent it was disclosed to circles specialised within the European Union, such disclosure had not been sufficient to prevent Crocs from relying on the grace period and priority date.
The GC noted that Crocs' website was not restricted to US users and ruled that, due to the substantial influence of the American footwear industry on trends within the UK, it would be unlikely that the successful emergence of Crocs' shoes in the USA in 2002 would have gone unnoticed by manufacturers within the EU.
It also rejected Crocs' argument that the disclosure had to be widespread in order for it to be prevented from relying upon the defence. The GC ruled that there is no quantitative minimum threshold of prior disclosure that needed to be exceeded.
Accordingly, the GC ruled that Crocs' acts constituted prior disclosure of the design and the registration should therefore be declared invalid as lacking novelty.
The decision reinforces the importance of registering all relevant designs before either taking a product to market or otherwise disclosing the design.
Given the international reach of the Internet and the ease of overseas travel, the safest approach would be to register the design before disclosure, rather than rely on an argument that the disclosure was not to relevant specialist circles from within the EU, as it seems that the prior disclosure exemption will be narrowly interpreted.
Where a grace period is afforded to potential applicants (to allow them to test their designs with the public), care should be taken to record the date of any disclosures of the design, so that they can ensure the application for protection is filed within such period.
The cost of registering a design in the UK and EU is comparatively inexpensive compared to the anticipated outlay for other registered rights e.g. trade marks and patents. Moreover, discounts are available for multiple filings at both the UK and European intellectual property offices.
Design registration is a powerful long lasting right (up to 25 years with renewals) and its low cost makes this form of protection accessible to all – whether they be cash-strapped designers or start-ups through to FMCG multinational manufacturers regularly launching new products.