LAS VEGAS, Aug. 10, 2017 /PRNewswire/ -- The U.S. Patent and Trademark Office (USPTO) issued a final rejection on the validity of Crocs, Inc.'s cornerstone design patent for the clog that Crocs became known for. The USPTO has been reexamining the validity of that patent, U.S. Patent No. D517,789 ("the '789 patent") since 2012 based on a challenge by U.S.A. Dawgs, Inc. ("Dawgs"), a Las Vegas based footwear designer and competitor of Crocs. For years, Crocs has used the now finally rejected '789 patent to prevent its rivals from selling or importing competing clogs into the U.S.
In rejecting the '789 patent as invalid for the third and final time, the USPTO found that the claimed design was published more than one year before Crocs applied for the patent. In the decision, the USPTO Examiner wrote that accepting the premise of one of the two arguments raised by Crocs "requires willing suspension of disbelief," and that Crocs' reliance on case law to support its other argument was "misplaced." While Crocs can appeal the USPTO's ruling, the patent will be canceled unless the USPTO's rejection is overturned.
"We are very pleased with the decision," said Steven Mann, Dawgs' CEO. "It is unfortunate that Crocs has been able to use this patent to suppress its competitors for so long. We have always been confident that, given a fair playing field, Dawgs would become a prominent competitor. Dawgs will continue to take all necessary steps to legally and fairly participate in the market to ensure that the American consumer has a choice for its clog purchases."
Despite the multiple rejections of the '789 patent by the USPTO since 2012, Crocs has continued asserting it against Dawgs in litigation in the U.S. District Court of Colorado. In 2016, Dawgs countersued Crocs for false advertising under the Lanham Act, alleging that Crocs has falsely promoted "Croslite," Crocs' coined name for the material from which most of its footwear is made, as superior to that of its competitors. The District Court has already denied Crocs' motion to dismiss, ruling that Dawgs' false advertising claim can proceed.
"For example, Crocs has continued to promote Croslite material as 'patented,' when it is not," said Mann. "This extends far beyond clogs, as the vast majority of Crocs' footwear is promoted as including Croslite. We believe this has been another prong of Crocs' business strategy that has made the company appear to be something it is not. Unfortunately, it is the consumers that have suffered the most."
Apart from the false advertising claim, last month Dawgs filed a new lawsuit in federal court in Nevada alleging trade dress infringement in that Crocs copied Dawgs' most popular product, its Z-Sandal. Dawgs also filed a claim for computer fraud alleging that Crocs illegally accessed Dawgs' confidential information and used it to successfully deprive Dawgs of sales on the popular shopping website www.zulily.com.
"Crocs has been suing Dawgs, our Canadian counterpart Double Diamond Distribution, Ltd., and our largest customer, CVS, over the course of more than 11 years," Mann remarked. "This constant litigation has been an incredible burden on a small, family-owned operation. It would be great to have these issues resolved and move on, but we refuse to be bullied and litigated out of business, as they have done to so many others, by a company that has a war chest and a mandate to drive competitors out of business. We will continue to assert our legal rights in all necessary forums to protect our company. We are prepared to continue to follow through and protect ourselves no matter how long it takes. The USPTO's rejection of Crocs' patent is concrete proof that we have been right all along."
For more information on Dawgs and its product offerings, see www.usadawgs.com
Patent Office Reexamination:
Reexamination Control No. 95/002,100
District Court of Colorado Proceedings:
Civil Action No. 1:06-cv-00605-PAB-KMT
District Court of Nevada Proceedings:
Civil Action No. 2:17-cv-02054-JCM-NJK
SOURCE U.S.A. Dawgs, Inc.