Crocs Files Lawsuit Against Daiso for Copying its Design
Who are Crocs and Daiso?
Crocs, Inc. is a world leader in innovative casual footwear for men, women, and children. Crocs maintain its commitment to its basic history of molded footwear while providing a wide range of all-season goods.[1] All Crocs footwear is made of Croslite, a patented, ground-breaking material that provides each pair of footwear the familiar and adored features of Crocs: softness, comfort, lightness, non-marking, and odour resistance.
Crocs urges customers to “Find Your Joy” in each vibrant pair of shoes by celebrating the fun of being a bit different. More than 300 million pairs of Crocs shoes have been purchased worldwide since the company’s founding in 2002 and in more than 90 different nations.
Since then, the brand has gained a sizable following among middle school and high school teenagers, who frequently choose Crocs as their go-to footwear for casual occasions and college days. Crocs consist of an exciting range of clogs, sandals, boots, flip flops, and sneakers for all, men and women, children and adults.
It is a universally recognized brand, known for different colours and shades, worn all over the world. It has a gigantic following in the United States of America, followed by UK, & India.
A sizable chain of 100-yen stores called Daiso Industries Co., Ltd. was established in Japan. Hiroshima Prefecture’s Higashihiroshima is home to the company’s headquarters. Daiso has a range of over 100,000 products, of which over 40 percent are imported goods, many of them from China, South Korea, and Japan.
With more than 3,493 stores in Japan, 2,248 outlets in 26 other countries and regions, and 5,741 stores globally, “DAISO” has a significant chain. [2]Dais offers roughly 76,000 products that enhance lives in a variety of ways, from everyday essentials to luxuries and pastimes.
Additionally, every month 800 new goods are produced. Even today, over 100 stores are still opening abroad each year, and the firm is generally regarded as a living infrastructure for people all over the world. Products from Daiso Japan are available in several Indian cities, including Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Hyderabad, Ahmedabad, Kochi, Pune, and Lucknow. [3]However, unlike Crocs, it deals with all kinds of products, ranging from soft toys to footwear.
The Issue Raised Between These Two Brands
The well-known Japanese retailer Daiso is the target of a recent trademark infringement lawsuit brought by Crocs, Inc. because it produces and sells a line of footwear that strikingly resembles the company’s iconic “crocs” clog design.[4]
The lawsuit was filed in a California District Court on Wednesday, June 15, 2022. Arnold & Porter Kay Scholer, an American multinational law firm based in Washington, D.C., filed the infringement suit as a representative of Crocs. [5]Crocs, in its suit of trademark infringement, stated that the ‘crocs’ design is identical to the Japanese retailer, Daiso footwear and called it,” virtually identical to the design of Crocs’s three-dimensional design marks.”
It is calling it the action for an attempt “to free-ride and trade on the significant goodwill developed by Crocs through its innovative footwear.” Charges have been brought against Daiso for selling “Casual Sandals for Men” and “Lined Casual Clog Products” as replicas of Crocs’ “3D” clogs.
According to Crocs, the range from Daiso has a number of Crocs-patent-protected designs, and because these trademarks were duplicated, consumers mistook the products’ validity. Customers may have developed false associations between Daiso and Crocs as a result, which might result in Daiso making unauthorised profits.
Crocs made it clear in its announcement, “This infringement and dilution scheme is intended to confuse, deceive, and mislead consumers into drawing associations between Crocs and Daiso and their respective footwear products so that Daiso can enjoy unfair gains and profits at the expense of Crocs.” [6]The items, according to the brand, feature a number of Crocs-owned patent markings and details.
These commodities were likewise produced by Daiso in China and were offered for sale in the USA for a suggested retail price of $3.00 to $3.50. The popularity of the classic clog silhouette has grown during the pandemic, this filing is one of the recent attempts made by Crocs to prevent knock-off designs.[7]
Crocs Has a History of Filing Infringement Suit
This is not the first time Crocs has brought a claim for patent infringement against a business. Crocs, Inc has already filed a lawsuit alleging infringement. Crocs filed a lawsuit against 21 other businesses in July 2021 for violating its trademark rights.[8]
The lawsuit named as defendants both big corporations like Walmart Inc. and Loeffler Randall Inc. as well as smaller businesses that sold “knock-offs.” Crocs claimed that several businesses had purposefully and regularly copied the footwear, which was first designed and promoted as a boating shoe. Several lawsuits in US District Courts were received for the same.
The company filed a complaint with the US International Trade Commission (USITC) in June 2021, requesting an investigation into the allegedly unlawful import and sale of footwear. [9] The investigation is still on according to the USITC.
In May 2015, Crocs filed a suit for infringement against the Chinese manufacturer Jinjiang Jinsike Footwear (JSK). According to the American manufacturer, JSK used the recognisable Crocs clog design, as a “unique embellishment.” [10] This had caused customers to mistake JSK’s shoes for those made and sold by Crocs. Thus, leading to profits and branding of JSK, instead of Crocs, the original owner of the design. Crocs received a favourable ruling from the Shanghai Court in 2015 on their dispute with Jinjiang Jinsike Footwear (JSK).
According to the brand, the ruling determined that JSK violated China’s Anti-Unfair Competition Law in its use of shoe designs, logos, labeling, and store decoration that too closely resemble that of Crocs’ footwear and branding. The ruling effectively forbids any rivals from copying the distinctive “look” of Crocs’ vintage clog design, which has been heavily promoted and sold in China since 2006.[11]
How Can Crocs Win the Infringement Case Against Daiso?
The judgment of the case is yet to be decided. Till now, only a suit has been filed by Crocs, Inc. against Daiso in US court. However, there are 2 outcomes the suit and both the parties can face in the upcoming trial. Either, crocs will win the suit of infringement against Daiso, or Crocs will lose the case against Daiso.
The happening of the latter is rare since crocs have won several infringement cases in the past. However, one cannot become certain unless the judgment is pronounced. There are certain steps one should follow in order to win an infringement case.
Determine the Area of Business of the Infringing Mark
This should ideally be the starting point because the main criterion courts use to determine whether two firms having the same set of patterns, and design would cause confusion or not. Remember that the guiding principle in such a case is “do not confuse the consumer.” Thus, if it is likely that the other business’s customers are going to be confused because you have the same design, then there is really a gigantic issue.
Even if the infringing brand doesn’t operate in a similar sector, it could look suspiciously like one. Crocs is known and sell only footwear with the same name. Whereas, Daiso sells all kinds of items ranging from flip flops, doormats, and soft toys to perfume, clothes etc. In the case of BAJAJ Auto Limited vs. TVS Motor Company Limited JT[12], the bone of contemplation was that BAJAJ was using the Digital Twin Spark Ignition, since 2005, when it got patented.
However, suddenly in 2007, when TVS came up with the same technology, the court stated that TVS has infringed the patent and ordered a permanent injunction for the same under section 108[13] of the Act as BAJAJ was the name associated with the technology.
The Duration of the Competing Business and Development of the Patent
If you’ve proven that the defendant firm is using your mark illegally and offers goods or services that are comparable to those of your company, you need to gather some background data. Finding out how long they have been in business would be part of this.
One must also ascertain how long the infringement has been in use. Plaintiff probably has a stronger claim if the use of their mark predates the use of other’s mark. The party that first began utilising a mark is frequently favoured by the courts.
For example, in the case of Cipla vs. Novartis[14], the Delhi High court barred Cipla from manufacturing a generic copy of the drug which was originally granted to Novartis as patented. The High court observed that the duration, research, and development by Novartis was more than Cipla.
Proving Resemblance Between the Designs
The key indicator of such infringement is whether a reasonable customer would be likely to mistake the two items or think they are comparable after viewing the goods. While the conclusion (as to whether a customer would get confused) is subjective, it is based on several recognisable factors, such as similar sounds, designs, words, letters, logos, and business.
There have been numerous cases of infringement where the resemblance was observed between 2 different companies. A prime example is Parle G, which has engaged in several trademark disputes with deceptive companies like Parle J. Additionally, PayTM and PayPal are now involved in a legal struggle over the resemblance of the blue’s shade and letter positioning.
Conclusion
In many businesses, patent infringement is a significant issue and occurs often. Three criteria— to determine the area of business of the infringing mark, the duration of the competing business and development of the patent, and proving resemblance between the designs are typically used by courts to determine whether a patent has been violated.
A few of the instances described above demonstrate how these 3 criteria are used to define patent infringement and how to approach the problem at hand. It is quite improbable that Daiso would prevail in this situation; the advantage in the illegal activity case belongs to Crocs.
References:
[1] About us, Crocs, Inc., (last visited Jun. 27, 2022 01:25pm).
https://www.crocs.com/.
[2] About us, Daiso.com, (last visited Jun. 27, 2022 01:27pm),
https://daisous.com/pages/about-us.
[3] Locations, Desert Cart, (last visited Jun. 27, 2022 01:29pm), https://www.desertcart.in/brand/daiso%20japan.
[4] Isaiah Poritz, Crocs Brings Trademark Suit Against Alleged Japan-based Copycat, Bloomberg Law, (last visited Jun. 27, 2022 01:39pm),
https://news.bloomberglaw.com/ip-law/crocs-brings-trademark-suit-against-alleged-japan-based-copycat.
[5] Shatakshi Gupta, Explained: Everything to know about Crocs x Daiso lawsuit drama, SK pop, (last visited Jun. 27, 2022 01:42pm),
https://www.sportskeeda.com/pop-culture/news-explained-everything-know-crocs-x-daiso-lawsuit-drama.
[6] Shoshy Ciment, Crocs Accuses Daiso of Selling Knock-Offs of Its Classic Clogs, Yahoo! Finance, (last visited Jun. 27, 2022 01:53pm),
[7] Abha Bhattarai, Love them or Hate them, Crocs are back, The Washington Post, (last visited Jun. 27, 2022 01:58pm),
https://www.washingtonpost.com/business/2021/06/03/crocs-pandemic-surge/
[8] Don-Alvin Adegeest, Crocs files lawsuit against 21 companies for copycat clogs, Fashion United.UK, (last visited Jun. 27, 2022 02:03pm), https://fashionunited.uk/news/business/crocs-files-lawsuit-against-21-companies-for-copycat-clogs/2021071356556
[9] News Releases, USITC institutes section 337 investigation of certain casual footwear and packaging thereof, USITC.com, (last visited Jun. 27, 2022 02:12pm), https://www.usitc.gov/press_room/news_release/2021/er0707ll1791.htm
[10] Sheena Butler-Young, Crocs China Trademark Victory Is Leading IP Case For 2015, FN75, (last visited Jun. 27, 2022 02:20pm),
[11] Katy Michael, Crocs, Inc. Design Infringement Victory Awarded as Leading Intellectual Property Case in China, Global News Wire, (last visited Jun. 27, 2022 02:27pm),
[12] BAJAJ Auto Limited Vs. TVS Motor Company Limited JT 2009 (12) SC 103.
https://www.ourlegalworld.com/bajaj-auto-ltd-vs-t-v-s-motor-company-ltd-jt-2009-12-sc-103/
[13] The Patents Act, No. 39 of 1970, India Code §108.
[14] Cipla Ltd. V. Novartis AG & Anr, 2017 (70) PTC 80 (Del).
https://www.origiin.com/2021/07/27/cipla-ltd-v-novartis-ag-anr-2017-70-ptc-80-del/
This article has been submitted by Naman Priyadarshi, a student at Symbiosis Law School, Hyderabad.
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