Federal Court Of Canada Awards Crocs Canada Accounting Of Profits For Industrial Design Infringement

On October 21, 2022, the Federal Court of Canada (the Court) issued its decision in Crocs Canada, Inc. v Double Diamond Distribution Ltd, 2022 FC 1443, finding that Double Diamond Distribution Ltd (Double Diamond) infringed Canadian Industrial Design Number 120939 (939 Design) owned by Crocs Canada, Inc. (Crocs Canada).  The Court also dismissed Double Diamond’s counterclaim for invalidity.

Crocs Canada’s 939 Design applies to the visual features of the Crocs Mammoth shoe depicted at right.  Crocs Canada alleged that Double Diamond’s Fleece Dawgs footwear (also depicted at right) were unlawful imitations and infringing copies of Crocs Canada’s 939 Design because they did not differ substantially from the 939 Design, and there was a likelihood that consumers would associate Double Diamond’s products with the 939 Design.  

Double Diamond denied that its Fleece Dawg products infringed the 939 Design, arguing approximately 25 points of differentiation between the two, and in the alternative, that the 939 Design was invalid.   Double Diamond claimed that the 939 Design was invalid due to various discrepancies in the figures, resulting in more than one design contrary to section 10 of the Industrial Design Regulations, and because it is not original in light of prior art. 

The Court found that the 939 Design was valid, stating that there was insubstantial variation in the figures that did not constitute a separate design.  The Court further found that the 939 Design was novel, and the asserted prior art was substantially different from the 939 Design.  Further, Double Diamond failed to establish that features of the 939 Design were dictated solely by utilitarian function.

The Court then turned to the four-part infringement analysis from the perspective of the informed consumer.  The Court agreed with Crocs Canada’s expert witness that the 939 Design and Fleece Dawgs shoe were “nigh identical”, and held that the Fleece Dawgs shoe was not sufficiently different from the 939 Design when considering the broad protection that 939 Design was entitled to, and the lack of similarity to prior art.  

The Court awarded Crocs Canada an accounting of Double Diamond’s profits in the amount of almost $650,000, pre- and post-judgment interest, and costs.  In granting an accounting of profits, the Court awarded the full amount of Double Diamond’s gross revenues because Double Diamond failed to meet the burden of proving deductible expenses to differentiate between its revenues and profits.

Summary By: Sharan Johal