Holding: A cause of action arises under Section 43(a)(1)(B) of the Lanham Act when a party falsely claims that it possesses a patent on a product feature and advertises the product feature in a way that causes consumers to be misled about the nature, characteristics, or qualities of its product.
Crocs sued several competitor shoe distributors, including the brand Dawgs, for patent infringement. Dawgs filed a counterclaim against Crocs alleging false advertising under Section 43(a)(1) of the Lanham Act. In particular, Dawgs alleged that Crocs engaged in a campaign to mislead customers by falsely claiming that its Croslite material was “patented,” “proprietary,” and “exclusive.” According to Dawgs, this marketing misled customers into believing that Crocs shoes were made of a different material of any other footwear and that other companies’ footwear was made of inferior material. The district court granted summary judgment in favor of Crocs, stating that the terms “patented,” “proprietary,” and “exclusive” were claims of inventorship and did not the misrepresent nature, characteristics, or qualities of Crocs’ products, as required to violate Section 43(a)(1)(B) of the Lanham Act.
Section 43(a)(1)(B) of the Lanham Act states that any person who misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. Section 43(a)(1) has been addressed by the Supreme Court in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) and by the Federal Circuit in Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009). In Dastar, the Supreme Court found that Section 43(a)(1) provides protection when a party misleads consumers as to the origin of goods, but does not apply when the party misleads consumers as to the original author or creator of the goods. The Federal Circuit extended this ruling to claims of inventorship in Baden, ruling that a claim based on false designation of inventorship is not actionable under Section 43(a)(1)(B). A party could misleadingly assert itself as the innovator or inventor of a technology, but still not violate Section 43(a)(1)(B), since this section requires “misrepresentation of the nature, characteristics, qualities, or geographic origin” of the goods or services.
In this case, the Federal Circuit found Crocs’ false claims that the Croslite material was “patented” to be more than a claim of inventorship and to be rooted in the nature, characteristics, or qualities of Crocs’ products. For example, these false claims could deceive consumers into believing that the materials used for competing footwear are inferior. Therefore, falsely claiming a product to be patented may be actionable under the Lanham Act if the advertisement misleads the consumers about the nature, characteristics, or qualities of its product. The district court’s ruling was reversed and remanded.
Citation: Crocs, Inc. v. Effervescent, Inc., 119 F.4th 1 (Fed. Cir. 2024)
Federal Circuit Precedential 
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