Dr. Jonathan Platt

Last week the Federal Circuit ruled in Crocs, Inc. v. Effervescent, Inc., No. 2022-1260 (Fed. Cir. Oct. 3, 2024) that advertising an unpatented product as “patented,” “proprietary,” and “exclusive,” is sufficient to support a false advertising claim under Section 43(a) of the Lanham Act (15 USC 1125(a)). In doing so the Federal Circuit distinguished prior cases in which false of claims of “authorship” of a product or feature were found insufficient to support a false advertising claim.

The case involved unpatented molded footwear sold by Crocs that was falsely promoted using the above terms. Crocs filed a patent infringement lawsuit against several competitors, some of which counterclaimed for false advertising. The District Court dismissed the counterclaim for failure to state a proper claim, citing a pair of prior cases, one from the Supreme Court and the other from the Federal Circuit.

The statutory provision at issue, 15 USC 1125(a)(1)(B), prohibits a false or misleading description or representation of fact, in commercial advertising or promotion, that misrepresents the nature, characteristics, or qualities of a product. Did falsely calling a product “patented,” “proprietary,” and “exclusive,” count as a misrepresentation of the nature, characteristics, or qualities of a product?

In finding that the statutory provision did apply, the Federal Circuit distinguished the prior cases that had been cited by the District Court, Dastar Corp. v. Twentieth Century Fox Film Corp., 539 US 23 (2003), and Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009).  Dastar involved the editing and sale of video cassettes of a television program that had fallen out of copyright, without any acknowledgment of the original producers of the program. Baden involved a promotion of basketballs as having a “dual-cushion technology” that was described as “innovative,” even though the manufacturer was not the originator of that technology. These cases, involving the originator of a product or feature (the “author” of the product or feature), were distinguished on the basis that the statements made by Crocs went to the nature or characteristics of its footwear, and could cause belief that the material of Crocs’ footwear was different from (and superior to) the materials used by its competitors.

It bears noting that there is also a separate provision, 35 USC 292, that prohibits falsely claiming that a product is patented, and which provides for a fine of up to $500 for each offense. However, since 2011 private parties have not been able to sue under this provision in a qui tam action – only the United States itself is able to sue. The retroactivity of this elimination of private qui tam actions under 35 USC 292 was upheld by the Federal Circuit in Brooks v. Dunlop Mfg., Inc., 702 F.3d 624 (Fed. Cir. 2012).