Federal Circuit Considers False Advertising Under The Lanham Act

The Federal Circuit will consider whether inaccurate use of terms like “patented,” “proprietary,” and “exclusive” in commercial advertising are actionable under the Lanham Act. PatentltyO explains that the issue arose after Crocs sued Double Diamond, U.S.A. Dawgs, and others for infringement of Crocs’ design patents.

Crocs prevailed, but U.S.A. Dawgs made a counterclaim of false advertising. It alleged that Crocs falsely marketed its “Croslite” shoe material as “patented,” “proprietary,” and “exclusive.” In fact Croslite is ethyl vinyl acetate, a compound that is ubiquitous in the footwear industry.

Crocs won a summary judgment in district court, arguing that an earlier case, Dastar Corp. v. Twentieth Century Fox Film Corp. established that false claims about invention or authorship are not actionable under the Lanham Act. Dawgs argued that its claim was not about inventorship. It said that Crocs’ advertisements using the terms “patented,” “proprietary,” and “exclusive ” misled consumers about the nature and qualities of Crocs’s footwear.

Dawgs appealed to the Federal Circuit. It argues that the district court overextended Dastar by adopting a per se rule that terms like “patented,” “proprietary,” and “exclusive” can never be actionable. According to Dawgs, Crocs’ use of those terms conveys false messages about the nature, characteristics, and qualities of its footwear, not just who invented the Croslite material.

In an amicus brief, the International Trademark Association urges the Federal Circuit to refrain from adopting a broad reading of Dastar that would foreclose false advertising claims based on the use of terms like “patented,” “proprietary” or “exclusive.”