Crocs is Suing Five Below for Trademark Infringement

Crocs is suing Five Below over a $7 pair of clogs, alleging the discount retailer copied elements of its footwear and infringed patents covering the charms used to decorate the shoes. Crocs and its subsidiary, Jibbitz, filed the lawsuit Sept. 18 in U.S. District Court for the District of Colorado, where Crocs is based. The companies accuse Five Below of infringing trademarks and patents through its Juniors Charm Clog and related accessories, according to court documents.

At the center of the case are Five Below's clogs, which Crocs says copy distinctive elements of its Classic Clog. The company alleges the shoes feature similarities including the arrangement of holes, trapezoid-shaped openings and a textured band. Crocs says those similarities could lead consumers to believe the Five Below shoes are affiliated with Crocs. Crocs is seeking damages and an injunction that would stop Five Below from selling allegedly infringing products.

Total Retail's Take: Crocs’ distinctive product design is at the essence of the brand. Therefore, its not surprising that Crocs will take any action it deems necessary to protect it. For Crocs, aggressive trademark enforcement can help preserve the differentiation and premium pricing of a product whose silhouette has become immediately associated with the brand. It also sends a warning to retailers and brands that Crocs views not just its name and logo, but elements of the broader Crocs/Jibbitz ecosystem, as valuable intellectual property worth defending.

For Five Below, the question becomes whether its value proposition can continue leaning heavily on inexpensive products inspired by viral or recognizable branded merchandise. The retailer has faced other IP disputes involving alleged dupes, while simultaneously growing rapidly. The legal ruling could result in greater scrutiny of Five Below's product sourcing and design, particularly for trend-driven merchandise that closely resembles established brands.

Lastly, the case highlights a growing tension in retail between consumer demand for affordable lookalikes and brands’ efforts to protect increasingly valuable product identities. The outcome figures to be closely watched by value retailers, marketplaces and private-label businesses. With retailers increasingly using social trends and real-time demand signals to develop merchandise quickly, IP review must become a more important part of the product development and sourcing process.