ITC Grants Exclusion Order For Crocs On Infringing Shoes

Michelle Marsh is a partner and Michael Kelly and Aaron Johnson are associates in the New York offi ce of Kenyon & Kenyon LLP.

On July 15, 2011, the U.S. International Trade Commission ("ITC" or "Commission"), concluded a prolonged patent investigation, issuing a general exclusion order prohibiting the importation of footwear that infringe Crocs Inc.'s utility and design patents.1 The general exclusion order serves as the remedy resulting from a finding by the ITC in April 2011 that Crocs' patents were enforceable and that remaining respondents Effervescent Inc. ("Effervescent"), Holey Soles Holdings Ltd. ("Holey Soles"), and Double Diamond Distribution Ltd. ("Double Diamond") had violated Section 337 of the Tariff Act of 1930 by importing into the U.S. footwear that infringed Crocs' patents.2

The ITC's order bars footwear based on Crocs' "breathable footwear pieces," detailed in a utility patent (U.S. Patent No. 6,993,858) and a design patent (U.S. Patent No. D517,789), from being imported into the country for consumption, whether the importers are the named respondents or other companies.3

The footwear company commenced the ITC investigation in March 2006, by filing a complaint accusing 11 companies of importing and selling shoes that infringed on the two named patents.4 Only three respondents remained following various settlements and ITC determinations of non-infringement.5 In prior proceedings in April 2008, the presiding administrative law judge ("ALJ") held that there had been no violation of Section 337 with respect to the '789 patent due to non-infringement and the domestic industry requirement, and additionally ruled that the '858 patent was invalid for obviousness.6

On appeal in February 2010, the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") reversed the ALJ's findings for both invalidity and non-infringement claims, remanding the investigation to determine whether the '858 patent was infringed and appropriate remedies.7 The ALJ determined on remand that the patents were enforceable, and the Commission requested submissions on the issues of remedy, public interest and bonding.8 The Commission found that Effervescent had infringed claims 1 and 2 of the '858 utility patent and that Double Diamond had infringed claim 2 of the '858 utility patent.9 These conclusions went along with the Federal Circuit's earlier finding that Double Diamond, Effervescent, and Holey Soles infringed with respect to the '789 design...