Crocs Loses Big in Patent Case

August 15, 2017

crocsWhether you love them or hate them, the foam clogs made by the Colorado-based Crocs are certainly distinctive. They can’t be called “unique,” however, at least according to the U.S. Patent and Trademark Office. A recent ruling from the government agency rejected the patent that Crocs has held on its signature shoes since 2006. Apparently another party had registered a similar design a year before, thus invalidating the original trademark.  

The Patent Office’s decision may finally bring an end to the five-year legal battle between Crocs and a footwear firm called USA Dawgs. Crocs has tried a variety of legal strategies to stop its rival from selling similar foam clogs, including making complaints about advertising and even suing for alleged corporate sabotage. The company relied on its patent to prove that Dawgs had knowingly infringed on Crocs’ intellectual property. With that design now invalidated, though, the company will likely face even more competition. “It is unfortunate that Crocs has been able to use this patent to suppress its competitors for so long,” said USA Dawgs CEO Steven Mann. “We have always been confident that, given a fair playing field, Dawgs would become a prominent competitor.”

Nevertheless, the patent issue probably wasn’t the only thing separating USA Dawgs from greater success. If Crocs’ recent sales figures are any indication, the American public just isn’t as interested in tacky foam clogs as they used to be. The company saw revenue slip 3 percent in the most recent quarter and plans to close 160 stores in the next year. Along with declining demand for its signature product, Crocs has also suffered from the retail industry’s overall downturn. At this point it’s hard to tell what the future holds for the company, although representatives say they plan to mount a last-ditch challenge to the Patent Office’s ruling.

Questions:

  1. Why are design patents so important for companies like Crocs?
  2. Which stage of the product life cycle do you think Crocs’ clogs are at currently?

Source: Aimee Picchi, “Is the Other Shoe About to Drop for Crocs?” CBS MoneyWatch, August 14, 2017.

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