Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

IP News

By Jeff Ginsberg and Ryan J. Sheehan
November 01, 2024
|

Federal Circuit: Falsely Claiming That a Product Feature is Patented Can Give Rise to a False Advertising Claim Under the Lanham Act

Section 43(a)(1)(B) of the Lanham Act provides a cause of action based on false advertising when, "in commercial advertising or promotion, [the defendant] misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities." 15 U.S.C. §1125(a)(1)(B). In Crocs, Inc. v. Effervescent, Inc., the Federal Circuit considered whether such a cause of action exists when a party falsely claims that a feature of its product is patented. See, No. 2022-2160, 2024 WL 4376134, at *1-2 (Fed. Cir. Oct. 3, 2024). The court found that it does.

In particular, the website of counterclaim-defendant Crocs, Inc. (Crocs) was alleged to have falsely described "Croslite" material used in Crocs footwear products as "patented," "proprietary," and "exclusive." Id. at *1. Crocs moved for summary judgment, arguing that this claim was "legally barred" by two prior decisions, Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), and Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009). The district court agreed and granted Crocs's motion, holding that "the terms 'patented,' 'proprietary,' and 'exclusive' were claims of 'inventorship'" akin to a "false designation of authorship" (as in Dastar and Molten), not misrepresentations as to "the nature, characteristics, or qualities of Crocs' products" (as required by the Lanham Act). See, id.

On appeal, the Federal Circuit reversed. In doing so, the court characterized the holdings of Dastar (where the Supreme Court addressed misrepresentations as to the authorship of a video) and Baden (where the Federal Circuit considered misrepresentations claiming the defendant was the "innovator, i.e., the author" of certain technology) to be "informative" but not controlling. Id. at *5. Dastar and Molten were distinguishable because "[a] claim that a product is constructed of 'patented' material is not solely an expression of innovation and, hence, authorship." Id. Instead, the Crocs website included statements both "that a patent covers Croslite" and "that Croslite has numerous tangible benefits found in all of Crocs' shoe products," which were "directed to the nature, characteristics, or qualities of Crocs' shoes." Id. Because the complaint "presented a theory under Section 43(a)(1)(B) of the Lanham Act linking Crocs' alleged misrepresentations in commercial advertisements to the nature, characteristics, or qualities of Crocs' shoes," the district court erred in granting summary judgment on the false advertising claims. See, id.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers Image

In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

CoStar Wins Injunction for Breach-of-Contract Damages In CRE Database Access Lawsuit Image

Latham & Watkins helped the largest U.S. commercial real estate research company prevail in a breach-of-contract dispute in District of Columbia federal court.

Fresh Filings Image

Notable recent court filings in entertainment law.

The Power of Your Inner Circle: Turning Friends and Social Contacts Into Business Allies Image

Practical strategies to explore doing business with friends and social contacts in a way that respects relationships and maximizes opportunities.