Judging by the amount of hate mail that seems to follow any hint of negativity about Crocs
According to a Forbes article, the European Union ruled that its version of a patent is invalid for Crocs' Beach model shoes. The ruling said that the shoes "lack individual character" compared to other similar brands' styles. The decision relates to a complaint by rival Holey Soles Holdings, which has been a Crocs rival for quite some time. (According to Forbes, they've both been selling the same style of shoes since 2001.)
Crocs is no stranger to the risk that knockoffs present to its shoes' success. Its regulatory filings dedicate space to such issues, and Holey Soles features prominently. Apparently, many companies want a piece of the action; even rival Skechers
I've spoken before about how fashion -- and fads -- can make or break footwear purveyors. That strikes me as a riskier proposition than more generalized fashion retailers offer. Look at how quickly Heelys
A Foolish reader recently reminded me of the ominous story of Earth Shoes, which were huge in the '70s, then dropped off the face of the earth. While they're still around -- and apparently making a retro-style comeback -- their history certainly illustrates how quickly fashion footwear can go from hot to not. Sales hit their highs in 1974, and Earth Shoes ended up in bankruptcy in 1977.
Even if Crocs doesn't turn out to be a faddish flash in the pan, patent problems futher underline the idea that its investment thesis is risky. Step cautiously, Fools; Crocs may be missing the all-important "sustainable" element of competitive advantage.
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