Friday, April 23, 2010

Crocs Inc. v. International Trade Commission

(Fed. Cir. Feb. 24, 2010)
[Slip Opinion]

After Int’l Seaway Trading Corp. v. Walgreens (Ordinarily Observed here) was decided in December of last year, the Federal Circuit may have thought their days of scrutinizing hole-ridden rubber slippers were behind them. Fortunately for design patents fans, they were mistaken. In Crocs v. ITC, the court was again called upon to review a decision involving the ubiquitous footwear.

The ITC’s Decision:

"In the matter of CERTAIN FOAM FOOTWEAR," Crocs had filed a complaint with the ITC under Section 337 of the Tariff Act, which prohibits the importation of articles that would infringe a patent currently being practiced domestically. Crocs alleged that 11 parties were infringing its design patent (U.S. Patent No. D517,789) for footwear.

[Note: Crocs also asserted a utility patent, which both the ITC and the Federal Circuit analyze. In the interest of brevity, I won’t be looking at that part of the decision here, nor the parts dealing with the technical prong of the "domestic industry" requirement of the Section 337.]

Disregarding Egyptian Goddess, the administrative judge crafted a detailed verbal claim construction based on the figures in the design patent, arriving at the following:

footwear having a foot opening with a strap that may or may not include any patterning, is attached to the body of the footwear by two round connectors, is of uniform width between the two round connectors, has a wrench-head like shape at the point of attachment, and extends to the heel of the shoe; with round holes on the roof of the upper placed in a systematic pattern; with trapezoid-shaped holes evenly spaced around the sidewall of the upper including the front portion; with a relatively flat sole (except for upward curvature in the toe and heel) that may or may not contain tread on the upper and lower portions of the sole, but if tread exists, does not cover the entire sole, and scalloped indentations that extend from the side of the sole in the middle portion that curve toward each other. (emphasis added).

Based on this claim construction, the judge found that none of the accused products infringed the Crocs patent. In the judge’s view, some of the accused products did not infringe because they did not include straps of uniform width extending to the heel of the shoe; others did not infringe because they did not include round holes in the upper.

Crocs sought review of the judge’s determination of non-infringement by the Commission itself, and on July 25, 2008, the Commission affirmed.

Crocs then appealed to the Court of Appeals for the Federal Circuit. After some of the defendants settled or otherwise left the case, accused products from five defendants remained.

The Federal Circuit decision:

A panel of the Federal Circuit wasted no time in kicking the ITC’s claim construction to the curb. Noting that it "has cautioned, and continues to caution" lower courts against relying on detailed verbal claim constructions of design patents, the court held the ITC decision up as a poster child of sorts: "[t]his case shows the dangers of reliance on a detailed verbal construction." As the court chided the ITC, "an illustration depicts a design better than it could be by any description."

The court pointed out that several elements of the claim construction were flat-out wrong. First, the patent did not disclose a strap "of uniform width." As can be seen in Figure 1 of the patent (reproduced above), the strap becomes wider at the heel. Second, as can be seen in Figure 4 (below), the holes around the sidewall are not "evenly spaced."

The court reiterated that the Ordinary Observer test should have been applied: "To show infringement under the proper test, an ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design."

In other words, the proper approach is to simply compare the designs side-by-side while keeping the scope of the prior art in mind. Strangely, the opinion reproduces the designs in a manner that makes it nearly impossible to see any detail. Nonetheless, the court found that all of the designs "embody the overall effect of the `789 design in sufficient detail and clarity to cause market confusion. Thus, the accused products infringe the `789 patent."


There are a few noteworthy aspects of this decision. First is the Federal Circuit’s enthusiasm for discouraging the reliance on overly-detailed verbal descriptions of designs. It seems misdirected here. The issue is not that the claim construction was overly detailed; the fatal flaw with the ITC’s decision was that the finding of infringement was premised on a claim construction that was just plain wrong, at least with respect to the strap of uniform width and the evenly-spaced holes.

Furthermore, the court did not remark on other less-than-optimal phrases in the claim construction. How can a design feature be an element of a claim if it "may or may not" be present? What limitation does a "systematic pattern" of hole placement really add? It would be interesting to know how the ITC would have ruled had its claim construction been a bit more accurate and precise.

In my opinion, the court got at least part of the infringement analysis wrong. Compare, for example, the Crocs patent (left) with the accused "Effervescent" product (right):

The court found that the Effervescent product infringed the Crocs patent. But I think the oversized rectangular holes on the upper of the Effervescent product clearly avoid deception. Almost everything about the Crocs design is rounded, swooping, and curved. Even the court noted that fact:

[An] overall effect of the design is a visual theme of rounded curves and ellipses throughout the design, including the strap forming a sort of continuation of the sidewall of the base to create a visually continuous ring encircling the entire shoe. Other examples of rounded curves or ellipses in the design are the ellipses formed by the strap and the foot opening in the base.

I just don’t see how the court can find that the Effervescent product (with its large rectangular holes on the upper) is deceptively similar to the overall appearance of the Crocs design, which the court acknowledges is a "visual theme of rounded curves and ellipses" including small round holes on the upper.

Finally, if you looked up the section of the Tariff Act referenced by Judge Rader in the first sentence of the opinion, you may have noticed that it was repealed over 80 years ago. This is a typo. Section 337 was originally encoded at 19 U.S.C. § 337 (the section cited by Judge Rader), but that section was repealed, and Section 337 was amended to its current form and moved to 19 U.S.C. § 1337.

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