Argument Recap

As we have been reporting, earlier this month the Federal Circuit heard oral argument in four cases that attracted amicus briefs. One of those cases is Crocs, Inc. v. Effervescent, Inc., in which the Federal Circuit is reviewing a determination by a judge in the District of Colorado to grant Crocs’ motion for summary judgment on a Lanham Act claim. This is our argument recap.

Matt Berkowitz argued for the appellants. Berkowitz began by arguing the district court committed legal error when it “said you can make claims about your products, including the characteristics of them, and lend credibility to those claims by saying that they are . . . patented material” as long as, in the district court’s view, “the falsity is a claim of authorship.”

A judge questioned why the appellants would benefit under the Lanham Act compared to a consumer who may have been defrauded. Berkowitz responded by arguing that “competitors” have standing to bring claims under the Lanham Act once they are harmed. Moreover, he continued, the appellants were “harmed” and they are competitors of Crocs because they make shoes with the same material.

Berkowitz argued the district court judge failed to address evidence about what “‘patented’ means to consumers” who purchased Crocs, and instead assumed that the word patented meant “authorship.”

A judge asked about Croc’s assertions that “they are inventor[s]” and “the product is innovative.” Berkowitz responded by maintaining that, while it is “not disputing necessarily who did what, the idea here is that they use these terms to build credibility for their product claims.”

He concluded by stating that the appellants should prevail based on the governing law’s definitions of “quality” and “characteristics” for Lanham Act claims.

Michael A. Berta argued for Crocs. He began by identifying what he viewed as the two major issues in the case, the first being “what is permissible under the Lanham Act” and the second whether there has ever been “any case that has ever found that the representations that were at issue allegedly here are actionable under the Lanham Act.” He went on to state that the answer the latter question is no, and in his view this case is not actionable under the Lanham Act.

A judge suggested the appellants are contending that a false “claim to authorship” is enough to create a cause of action. Berta responded by stating that under either provision of the Lanham Act, there would need to be a false statement of “authorship” or “characteristics of quality” to make a valid claim. He emphasized, however, that a claim of authorship alone is insufficient to substantiate a Lanham act claim. He argued that, under the Lanham Act, what is actionable is a mischaracterization of the “character or quality” of a product and he stressed the need to identify “the misrepresentation that is actionable.”

A judge asked if the court finds a link between “authorship and statements providing unique characteristics” whether Crocs would lose. Berta responded “no”, arguing there is case law to support that merely linking a work “innovative” to a certain technology characteristic is not enough to support a claim. He argued that, if all one says is false is the “word ‘patented’ there cannot be” a Lanham Act claim. The judge, however, emphasized that falsely claiming there is a patent is “telling the world [a product] is patented, which is false.”

The judge suggested it was frustrating that the district court seemed to exclude evidence that needed to be substantiated. Berta responded that the appellants relied on screenshots in their response to the motion for summary judgment, and those screenshots were not substantiated and therefore excluded by the court.

A judge asked Berta if the word “‘patented’ can ever imply characteristics of the product.” Berta responded “maybe” and argued that it depended on how the word “patented” is used in relation to the relevant characteristics.

In his rebuttal, Berkowitz argued “there were unobjected-to exhibits of false advertising.” He contended the district court failed to consider whether these would create issues of material fact. Berkowitz concluded by arguing the false statements of patentability made by Crocs were misrepresentations.

We will continue monitoring this case and report on developments.