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Supreme Court Declines Review of Landmark False Advertising Case, Leaving Circuit Split Unresolved
In a decision that carries significant implications for American businesses, the U.S. Supreme Court on Monday declined to review the Federal Circuit’s ruling in Crocs, Inc. v. Double Diamond Distrib., Ltd., et al., allowing a notable division among circuit courts regarding Lanham Act false advertising claims to persist.
The case centered on whether companies can be held liable under federal law for making potentially misleading statements about intangible product features, such as claims that a product is patented or proprietary. With the Supreme Court’s refusal to intervene, businesses now face a patchwork of legal standards that vary depending on where lawsuits are filed.
The long-running dispute dates back to 2006, when Crocs initiated legal proceedings against Double Diamond Distribution, Ltd., U.S.A. Dawgs, Inc., and Mojave Desert Holdings, LLC (collectively known as Dawgs). A decade into the litigation, Dawgs countered with allegations that Crocs had violated the Lanham Act by falsely advertising that its closed-cell resin material “Croslite” was exclusive, proprietary, and patented.
At the heart of Dawgs’ complaint was the assertion that these statements could mislead consumers into believing competing molded footwear products were inherently inferior. Initially, the U.S. District Court for the District of Colorado sided with Crocs, ruling that such claims about intangible properties weren’t actionable under the Lanham Act—a position consistent with precedents established in the Second, Sixth, and Ninth Circuits.
However, the Federal Circuit reversed this decision, aligning itself with the Fourth Circuit’s broader interpretation of the law. The appeals court held that the Lanham Act’s prohibition on misrepresentations about “the nature, characteristics, qualities, or geographic origin” of products extends to intangible properties as well, including patent status claims.
Legal experts note that this circuit split creates significant uncertainty for national marketing campaigns. Companies operating across multiple jurisdictions must now contend with different standards for advertising claims depending on where consumers might bring lawsuits.
“This decision—or lack thereof—places businesses in a precarious position,” said Amanda Torres, an intellectual property attorney not involved in the case. “A statement about patent protection or proprietary technology might be perfectly legal in New York or California but potentially trigger liability in Virginia or before the Federal Circuit. It’s exactly the kind of circuit split the Supreme Court typically resolves.”
The implications extend well beyond the footwear industry. In today’s digital marketplace, where advertisements reach consumers nationwide instantaneously, companies must navigate these inconsistent legal standards with extreme caution. Marketing claims that highlight proprietary technology, exclusive formulations, or patent protection—common tactics in industries from pharmaceuticals to consumer electronics—now carry varying degrees of legal risk.
For businesses seeking to minimize exposure, legal experts recommend several protective measures. Companies should scrutinize marketing materials that describe products as “exclusive” or “proprietary,” ensuring these claims can be substantiated. Regular consultation with legal counsel regarding advertising content has become increasingly important, as has proper training for marketing teams on the legal implications of intellectual property claims.
Some industry observers speculate that the Supreme Court’s reluctance to address the split may indicate the justices are waiting for the issue to mature further in the lower courts, possibly allowing other circuits to weigh in before making a definitive ruling.
Until the high court eventually resolves this conflict, businesses must adapt to a fragmented legal landscape where the boundaries of permissible advertising claims remain uncertain and inconsistent across jurisdictions.
The case is Crocs, Inc. v. Double Diamond Ltd., No. 25-75.
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16 Comments
The Supreme Court’s decision not to take up this case is surprising, given the significance of the circuit split. I wonder if they felt the lower courts needed more time to develop the case law in this evolving area of false advertising law.
That’s an interesting perspective. Perhaps the Court wanted to allow the circuit courts more flexibility to interpret the Lanham Act for now, before potentially stepping in at a later date to provide more definitive guidance.
It’s disappointing that the Supreme Court declined to resolve the circuit split on this Lanham Act issue. Businesses need more certainty around the legal standards for false advertising claims related to intangible product features. This decision leaves a lot of ambiguity that could lead to costly litigation.
I agree, the lack of clarity from the Supreme Court is problematic. Companies will have to be very careful about how they make claims and advertise their products to avoid potential lawsuits, which could stifle innovation and competition.
This case has major implications for companies in the mining, commodities, and energy sectors, where claims about proprietary technologies and processes are common. I’m curious to see how this plays out, especially for smaller players trying to compete against industry giants.
Absolutely. The lack of clear legal standards could put smaller, innovative companies at a real disadvantage if they can’t effectively protect their intellectual property claims. This is an important issue to follow for those industries.
This case highlights the challenges that companies face in protecting their intellectual property and proprietary claims, especially in industries like mining, commodities, and energy. The Supreme Court’s refusal to step in and resolve the circuit split is disappointing, as it leaves businesses vulnerable to a patchwork of legal standards across different jurisdictions.
Absolutely right. The lack of Supreme Court intervention means companies will have to navigate a complex legal landscape when it comes to making claims about intangible product features. This could hinder competition and innovation in these critical sectors.
This is an important case for the mining, commodities, and energy sectors, where intellectual property and proprietary technologies are crucial competitive advantages. The Supreme Court’s decision not to intervene is disappointing, as it leaves businesses exposed to a patchwork of legal standards across different circuits.
Absolutely right. Inconsistent legal standards on Lanham Act claims could create significant challenges for companies in these industries as they try to protect their innovations and investments. The lack of Supreme Court guidance is concerning.
This case highlights the challenges of protecting proprietary technologies and intellectual property in an increasingly competitive business environment. I’m curious to see if Congress takes any action to provide more consistent guidelines for false advertising claims related to intangible product features.
That’s a good point. With the Supreme Court stepping back, it may fall to Congress to step in and clarify the Lanham Act in this area. Businesses need more legal certainty around these types of claims.
The Supreme Court’s refusal to take up this case is puzzling, given the importance of the Lanham Act issues at stake. Businesses, especially in mining, commodities, and energy, rely heavily on claims about proprietary technologies and processes. This circuit split leaves them in a very uncertain legal environment.
Agreed. The Supreme Court’s decision not to resolve the circuit split is a missed opportunity to provide clear, consistent guidance on these types of false advertising claims. Companies operating in these sectors will need to be extremely cautious going forward.
Interesting case on the Lanham Act and false advertising claims. With the Supreme Court declining to resolve the circuit split, it seems like businesses will continue to face a patchwork of legal standards on intangible product features. I wonder how this will impact competition and innovation going forward.
Agreed, the lack of clarity from the Supreme Court leaves a lot of uncertainty for companies. It will be important to monitor how the lower courts interpret and apply the Lanham Act in these types of cases.