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Court Reverses ITC’s Findings of Noninfringement of Crocs’s Design Patent and Obviousness of Utility Patent

08-1596
February 24, 2010

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Last Month at the Federal Circuit - March 2010

Judges: Lourie, Rader (author), Prost

[Appealed from: ITC]

In Crocs, Inc. v. International Trade Commission, No. 08-1596 (Fed. Cir. Feb. 24, 2010), the Federal Circuit reversed the ITC’s determinations that U.S. Patent Nos. 6,993,858 (“the ’858 patent”) and D517,789 (“the ’789 patent”) are invalid and not infringed, respectively, and that Crocs, Inc. (“Crocs”) had not satisfied the domestic industry requirement under 19 U.S.C. § 337.  The Court remanded to the ITC to determine infringement of the ’858 patent and any appropriate remedies.

Crocs is the assignee of the ’858 patent, a utility patent relating to “breathable footwear,” and the ’789 patent, a design patent claiming an ornamental footwear design.  Crocs asserted patent infringement and unfair competition claims in the ITC against the respondents for making infringing products abroad and importing them into the United States.  The ALJ granted summary determination that the respondents’ products did not infringe the ’789 patent and that the ’858 patent was obvious at the time of invention.  The ITC affirmed.

On appeal, the Federal Circuit reversed the ITC’s finding of noninfringement of the ’789 patent, finding the accused design and the patented design were deceivingly similar.  The Court indicated that the ITC and ALJ had not focused on the patented design as a whole, as proper infringement analysis requires, but had instead relied excessively on the detailed verbal description of the design.  See slip op. at 9 (citing Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679-80 (Fed. Cir. 2008) (en banc)).  The Court emphasized the dangers of relying on the verbal claim constructions as it could lead to emphasis on particular features of a design rather than the design as a whole.  Design patents are claimed as shown in drawings and claim constructions are adapted to the drawings.  Reliance on the words rather than the drawings can “distract” from a proper infringement analysis of a design patent.  Id. at 10.  Accordingly, “[a]s a rule, the illustration in the drawing views is its own best description.”  Id. (citing M.P.E.P. § 1503.01 (8th ed., rev. 5, Aug. 2006)).

The ITC, failing to apply the ordinary observer test, placed “undue emphasis” on particular details of the ’789 patent’s written description, namely, the descriptions of a “strap of uniform width” and “holes evenly spaced.”  The Court stated that these minor details “distracted” from the overall impression of the claimed design, which was similar to that of the accused products.  Additionally, the Court noted that the ’789 patent drawings did not correspond to the details, depicting the strap bulging to a greater width at the middle of the strap and the holes not evenly spaced.  In applying the ordinary observer test, the Court made side-by-side comparisons of the drawings of the ’789 patent design and the accused products, which appeared to be almost identical.  The Court noted that “[i]f the claimed design and the accused designs were arrayed in matching colors and mixed up randomly, this court is not confident that an ordinary observer could properly restore them to their original order without very careful and prolonged effort.”  Id. at 15.  Accordingly, the Court found that the accused products infringed the ’789 patent design.

The Court then turned to Crocs’s unfair competition claim under section 377.  It again applied the ordinary observer test and reversed the ITC and ALJ’s findings that Crocs’s shoes were not actually covered by the ’789 patent.  Under section 377, unfair competition claims require a “domestic industry” relating to the articles protected by the patent, i.e., Crocs’s allegedly patented products must actually be covered by the ’858 patent to have a valid claim.  The Court performed a side-by-side comparison of the ’789 design patent and the Crocs Beach shoe.  The Court found that since an ordinary observer would consider the overall effects of the shoes and the patented design to be the same, Crocs satisfied the domestic industry requirement. 

Moreover, the Court reversed the ITC’s finding that the ’858 patent was obvious, finding that the prior art lacked an important element of the claimed invention, a foam strap riveted to a foam base with direct contact.  The Court noted that the prior art actually discouraged and taught away from the use of foam straps.  In particular, people skilled in the art cautioned against the use of foam straps because foam was known to be prone to tearing. 

The Court also found that the invention yielded “more than predictable results.”  Id. at 20 (citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007)).  Indeed, the use of the foam strap created unique frictional forces between the foam strap and the foam base, keeping the strap in place so that it could maintain the shoe’s position on the foot without constant contact with the wearer’s Achilles part of the foot.  Rather than pushing the foot forward into the shoe like straps in the prior art, the ’858 patent strap supported only when necessary to keep the shoe positioned correctly on the foot, creating a “passive restraint” system.  This system, which was not present or suggested in prior art at the time of the invention, created a looser fit that made Crocs’s shoes unpredictably more comfortable than prior art products.

Lastly, the Court noted that Crocs’s shoes practicing the ’858 patent have enjoyed commercial success with a “prima facie” nexus between the patented elements and the commercial success.  Id. at 23.  There was also proof of “copying” of the patented invention by others.  Accordingly, the Court held that the ’858 patent was not obvious at the time of the invention.  The Court thus remanded to the ITC to determine infringement of the ’858 patent and any appropriate remedies.

Summary authored by Victoria S. Lee, Esq.