Crocs sues Five Below over $7 clogs

Key Points:

• Crocs and its subsidiary Jibbitz have filed a lawsuit against Five Below, alleging that the discount retailer copied design elements of Crocs' Classic Clog and infringed patents related to decorative shoe charms.
• The lawsuit, filed in U.S. District Court in Colorado, claims Five Below's Juniors Charm Clog and related accessories feature similar hole arrangements, trapezoid-shaped openings, and textured bands that could confuse consumers about the products' origin.
• Crocs sent a demand letter to Five Below in March warning about intellectual property concerns, but Five Below continued selling the disputed $7 clogs, which are priced significantly lower than Crocs' $40-$65 clogs.
• Crocs seeks a jury trial, unspecified damages including lost profits, a permanent injunction against Five Below selling infringing products, attorneys' fees, and destruction of infringing inventory.
• The lawsuit coincides with Five Below's rapid expansion, having opened over 100 new stores recently and increased net sales by more than 27%, while Crocs sells about 150 million pairs annually and generates over $4 billion in sales.