A Mile in Her Shoes

Guarding a $1 billion company that carries a variety of footwear all over the world means Sara Hoverstock isn’t just protecting Crocs’ product line, but also its profit margin

If the shoe fits, you better protect it. That’s the job description of Sara Hoverstock, associate general counsel and vice president of global intellectual property and Asia legal, for Crocs. Hoverstock protects and enforces the unique design and structural elements that have helped make Crocs a worldwide leader in innovative, casual footwear.

Since its inception in 2002, Crocs—based in Niwot, Colorado—has sold more than 350 million pairs of shoes in more than ninety countries around the world. Along with its signature clogs, Crocs’ product line has grown to include sneakers, sandals, boots, and wedges. As a result, the company earns more than $1 billion in annual revenue.

Success breeds imitators, of course, so Hoverstock and her team are vigilant in protecting Crocs’ intellectual property (IP) rights. Nevertheless, being a global brand brings with it global-sized challenges. Hoverstock has learned that firsthand while on the job; back in 2005, she was the firm’s second legal hire.

“When I came to Crocs, I had minimal IP experience,” Hoverstock recalls. Back then, she and her legal partner were considered “jacks of all trades.” While she still handles other aspects of law, IP is now her specialty.

Hoverstock divides intellectual property law into two areas: prosecution and enforcement. The former is about evaluating the company’s assets, products, and ideas for protection; filing trademarks and patents; and working with the marketing and product development teams to define company innovations. Enforcement entails using those assets to enforce actions on others that are attempting to unfairly trade off of the company’s IP.

“You need a strategy to tie those two areas together,” she says, adding that her biggest challenge has been to combine what were essentially regional silos spread across the world so that everything flows through one funnel. “We are constantly trying to coordinate our regions and all their different functions and different innovations. The bigger the company gets, the more creative ideas you get, and it’s a constant challenge to funnel and evaluate those, so we are capturing everything and giving it the proper protection.”

Hoverstock is especially interested in Crocs’ Asian markets. She worked in Singapore for two years to establish the company’s Asia legal department and align it with corporate standards. She traveled extensively, learning the legal and cultural differences among the various countries in the region.

“Japan, China, and Southeast Asia are all different—with different challenges—so it was very helpful to be on the ground,” Hoverstock recalls. “Some countries mimic the US court system, but others are a little more free-form, with a lot of hoops that you have to jump through.”

In fact, political processes, or a lack thereof, determine how fast things move.

“Southeast Asia is sort of the Wild West,” she explains. “It is very difficult to enforce there because of a high rate of corruption.”

China, which is the focus of many international companies’ efforts, is a key aspect of Crocs’ global portfolio as well.

“In China, the biggest challenge is a cultural component that is somewhat accepting of infringement,” she says, adding that the culture is more forgiving of copycats, and the court system often turns a blind eye to IP abuse or awards minimal compensation in damages. “We had one case where we went back to court with the same infringer multiple times.”

Crocs is making slow gains, however, by educating judges there on IP issues. It even went on to defeat a multiple offender in a landmark case in Shanghai.

“We had to continually push, and it took a few years to get a decision that meant something,” Hoverstock explains. “Patience is a virtue in these places.”

Hoverstock also handles work in Europe and in Latin America, which is another area where she says the law is not as locked in as it is stateside.

“You have to maneuver through politics and relationship issues,” Hoverstock says. “Everything down there is incestuous. Everyone knows each other. So you have to be careful and stay within the guardrails.”

Her team’s work has allowed the company to claim multiple “three-dimensional trademark rights”—a trademark not just on a word mark or logo, but also on the look of the product itself.

“This is beneficial in stopping lookalike products at the border,” Hoverstock says. “It took a little while to gain reputational traction to assert those rights, but it has been extremely successful in the last year or two.”