Crocs both wins and loses in complaint over alleged knock-off shoes

A two-year investigation into footwear giant Crocs’ complaint about potential trademark violations by various other businesses has left the Broomfield-based company both a winner and a loser.

The U.S. International Trade Commission’s probe came to a close this month, clearing American retailer Hobby Lobby, American wholesale company Orly Shoe Corp. and Chinese-owned Amoji of any infractions, according to a Federal Register notice.

The government agency issued limited exclusion orders, which typically ban the importation of products made by violating companies, to four parties: La Modish, Star Bay, Huizhou Xinshunzu Shoes Co. and Jinjiang Anao Footwear Co. It also sent cease and desist orders to both La Modish and Star Bay.

“We are pleased that our trademark rights in the classic clog remain valid and enforceable,” a spokesperson wrote in a statement on Wednesday. The order against the four offending parties “is consistent with our decades-long assertion of novelty, recognition and brand equity that Crocs holds in connection with its iconic clog.”

But the representative described the company as “disappointed” in the decision to find no violation with several of the respondents, and “will evaluate the need to appeal the commission’s decision to the federal circuit.”

“As we have in the past, Crocs will continue to aggressively protect its rights,” the spokesperson wrote.

Crocs, founded in 2002, named about two-dozen parties that allegedly violated Crocs’ intellectual property rights by diluting its trademarked shoe design and “Crocs” word mark in its original complaint. “Trademark dilution occurs when a third party uses a mark or trade name in commerce that is sufficiently similar to a famous mark such that it harms consumer perception of the famous mark,” legal database Justia explains.

Well-known companies on the list include Skechers USA Inc., with a later amendment adding Walmart Inc. However, the government agency ended its investigation with the majority of them because of settlement agreements reached with Crocs, consent orders and more.

A separate legal complaint on the same issue filed by Crocs in 2021 argued that the shoe design and the word mark “CROCS” are both famous, with footwear for sale domestically and abroad in more than 90 countries. In particular, its classic clog shoes — “conceptualized during a sailing trip” — have earned recognition in the footwear market, with celebrities and the general public alike wearing them.

At the end of July, Crocs reported “record quarterly revenues of over $1 billion,” CEO Andrew Rees wrote in an announcement about the company’s second quarter 2023 financial results. Last year, its annual revenue reached $3.6 billion combined for Crocs and the HEYDUDE shoe brand, which the former acquired.

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