False Claims of Patent Protection at the “Sole” of Lanham Act Case

In Crocs, Inc. v. Effervescent, Inc., No. 22-2160 (Fed. Cir. 2024), the Federal Circuit reversed a district court’s entry of summary judgment and held that false claims of patent protection can give rise to a false advertising claim under the Lanham Act.

Beginning in 2006, Crocs sued various shoe competitors for infringement in a group of cases spanning multiple forums. U.S.A. Dawgs, Inc. and other defendants (collectively “Dawgs”) filed a counterclaim, alleging that Crocs’ description of “Croslite”—the primary material used in Crocs’ molded footwear—as being “patented,” “proprietary,” and “exclusive”—deceived consumers into believing that its competitors’ products are made of inferior material compared to Crocs. In Dawgs’ view, this violated Section 43(a)(1)(B) of the Lanham Act which prohibits a “false or misleading representation of fact, which … misrepresents the nature, characteristics, qualities” of another’s goods. The district court granted Crocs’ motion for summary judgment, concluding Dawgs’ counterclaim failed as a matter of law because these terms were claims of “inventorship,” and did not mislead customers about the nature, characteristics, or quality of the products.

On appeal, the Federal Circuit reversed. It was undisputed that Crocs’ statements were false because Crocs was never granted a patent on the molded material. The Court rejected Crocs’ arguments that the term “patented” was akin to a claim of attribution of authorship and thus did not give rise to a cause of action under the Court’s precedent. Rather, the term “patented” as used in Crocs’ advertising was directed at the nature, characteristics, or qualities of Crocs’ molded footwear and suggested its competitors’ material is inferior. The Court held that false claims of patent protection on a product feature in a manner that causes consumer confusion about the nature, characteristics, or qualities of a product can be a violation of 43(a)(1)(B) of the Lanham Act and remanded for further proceedings.