The Crocs appeal is available in full
here. The decision contains a number of other interesting points, not all of which were decided. Here are my selection.
1. On the nature of appeals. Revocation was sought at first instance on several grounds, but some were rejected. The proprietor appealed but the applicant for revocation who had succeeded in getting the design revoked on one ground, did not appeal the others. The proprietor claimed that it therefore did not need to comment except on the ground which formed the basis of the first instance decision. The Board however held that it had "to review the whole matter brought before the first instance (so-called devolution effect), not just the grounds of appeal", particularly since the applicant for revocation referred to all of them in his response to the appeal. That suggests that the structure and content of pleadings in design revocation appeals is somewhat important. The appellant/proprietor obviously needs to address the points in the decision of the first instance which are against him, but could apparently also address points decided in his favour, or not decided at all. If he does not, then the respondent/applicant to revoke may raise them anyway - and the proprietor should respond. But might the Board raise them of its own volition even if neither party does so?
2. On the assumed infringer's right to intervene. Partenaire Hospitalier International requested permission to be joined during the appeal as a party to the invalidity proceedings in accordance with Article 54 CDR, on the basis that Crocs had arranged for an administrative seizure of their shoes. The proprietor challenged this on the basis that customs measures did not constitute ‘Proceedings for infringement’. According to the Board, "Article 54 CDR merely mentions the notion of ‘Proceedings for infringement’ but does not require that they are judicial in nature. Therefore, customs seizures, which are administrative in nature, but are aimed at securing evidence of the alleged infringement – evidence that will be relied on in a subsequent court action – should be considered included in the notion. The Board considers that nothing is gained by interpreting ‘proceedings for infringement’ too narrowly, in view of the purpose of Article 54 CDR, which is to enable a party who is being accused of infringement to defend itself." Accordingly, they were admitted as a party.
3. On the handling of third party intervention. The third party made a fairly different case to the
respondent/applicant to revoke, based largely on the alleged functionality of the design. The Board however made no use of their submissions. "Since the purpose sought by the third party – i.e. a declaration that the Challenged Design is invalid – has already been achieved on the basis of the other application for a declaration of invalidity, the Board considers that obvious reasons of procedural efficiency make unnecessary to rule on the third party’s application." This appears to constitute the application, by analogy, of Art. 32 CDIR, although the Board do not refer to that Article. It may make sense within the context of the appeal. However, if the proprietor/appellant were to successfully appeal on up to the General Court, the result would presumably be that, if they win, the case would have to be remitted back to the Board of Appeal to decide on the intervenor's case. One wonders whether the Board could in turn remit it down to the first instance. Either way, there is only a procedural economy if the Board is extremely certain that it will not be overturned by the General Court - which is perhaps reasonable given their
current low reversal rates for trade marks.
4. On priority and "first" applications. The US design patent application from which priority was claimed itself claimed priority from an earlier US utility patent application. That is not possible within the European system (though cross-claims between designs and utility models (with a six-month priority period) and utility models and patents (with a twelve-month priority period) are envisaged in the Paris Convention and expressly allowed in the CDR and the EPC respectively). Thus, no European design could have claimed the priority of the original US utility patent application. The question was thus whether or not the US utility patent application was a "first" application for CDR Art. 41(1). If so, then the priority claim from the US design patent application was invalid. Alas, "For reasons of procedural efficiency, the Board decides not to examine the validity of the priority claim because that would not change the outcome of the case..." So we shall have to wait until another day to know the answer to this interesting question.
5. On the effect of a parallel patent application. Crocs filed European Patent application EP1803364 claiming priority (via a tortuous route) from the same US utility patent application. According to the respondent/applicant for revocation, "All the individual elements of the design that the Holder claims as ornamental have previously been declared by the same Holder as functional in the various patent and design patent applications filed in the USA for the same design." This kind of argument has featured quite regularly in design cases over the years, and more recently also in trade mark cases (the Philips razor case and the Lego bricks case, to name but two). On the current UK view of functionality (
Landor & Hawa International Ltd v Azure Designs Ltd [2006] EWCA Civ 1285 [2006] E.C.D.R. 31) it is not conclusive since there is no reason why a feature having a function could not be shaped in one particular way of many which also has an aesthetic effect. The position is less clear under the current
Board of Appeal approach following the Chaff Cutters case. It played no real part in their reasoning in this decision. In fact, underneath the sweeping statement lies a narrow point: the point of novelty of the Crocs design (and the only feature contibuted by the sole named designer/inventor) was the heelstrap, which was for an essentially functional purpose of keeping the shoe on in the wet, and shows little styling beyond what is necessary for that; the method of making the shoe with heelstrap was the subject of the patent. This issue had played out in the parallel US proceedings, where the intervening Egyptian Goddess case led to a reversal of the first instance decision, but played little direct part in the Board's decision.
6. On parallel judgments. Each party cited a parallel judgment in its favour. The respondent/applicant for revocation showed that, in interlocutory proceedings, the Düsseldorf Community Design Court of First Instance found on 27 December 2007 that the Challenged Design lacked novelty, and the appellant/proprietor cited a
CAFC ruling issued on 24 February 2010 holding that two US design patents on identical subject matter are valid. The proprietor attacked the Düsseldorf judgment as the court allegedly "did not conduct detailed examinations and did not have the technical evidence that has been submitted in these proceedings." As a practical matter, one cannot tell the effect of citing such judgments from a written decision - courts rarely explicitly rely on the opinions of other courts, and this applies doubly to European institutions which must always avoid the charge of national prejudice by following one court over another. Perhaps the Board took some unspoken comfort from the Düsseldorf judgment, since it came to the same conclusion. However, as to the US judgment, the Board held that it "may be taken into account but is manifestly irrelevant" to the extent that it did not even send it to the other parties for comment, as it would have needed to do had it taken it into account at all.
7. On optional features and overall impression. A point on the heel strap was that it could be rotated forwards out of use. This showed, according to the proprietor/appellant, that it was not functional. The Board, however, found exactly the reverse: "The fact that the strap has been designed so that it can be, at the wearer’s choice, put to use or not is evidence of its functional character." We are a bit doubtful about this reasoning. More significantly perhaps, the Board found that it was not important at all since in the forwards position it was almost invisible. It constituted an "accessory", which inherently made little impact on the overall impression. I have condensed the Board's remarks, omitting some of the functionality points - apologies if this distorts their logic at all.
"In the Board’s opinion, the presence/absence of the heel strap does not alter the overall impression made on the informed user – a reasonably informed buyer and wearer of leisure footwear such as clogs – by the two designs, which remains the same. ... The informed user will perceive the strap for what it clearly is: an accessory whose only ‘raison d’être’ is to keep the foot firmly inside the clog. This is an especially desirable feature when the clog is wet inside and can be slippery. The accessory character of the strap is well demonstrated by the fact that it is not a fixed element but one that can be, so to say, neutralised or deactivated by rolling it forward. The heel strap is, in fact, an optional accessory – i.e. something that anybody wearing the clog may decide to use or not – and may hardly be qualified as ‘a significant part of the design’ (so the contested decision). ... A corollary of the above is that the Holder’s claim that the strap is an important aesthetic feature is unfounded. If this was true, the strap would have been designed as a fixed element of the clog, so as to be permanently visible. ... In the Board’s opinion, since the two product designs only differ by an element that can be made to become redundant – thus proving its accessorial and functional nature – they produce on the informed user the same overall impression. The overall impression will be influenced by the rest of the parts of the clog, which are all fixed, and whose aspect is identical."
