UPDATE: USA Dawgs Parent Clarifies Involvement in Crocs Litigation (Sept. 17)
In response to FN’s request for comment, a spokesperson for Optimal Investment Group, which acquired USA Dawgs last year, indicated that the private equity firm does not intend to pursue the litigation that was initiated by the brand’s previous owners.
“USA Dawgs LLC is not the owner of the litigation claims being pursued in the Crocs litigation,” the spokesperson said.
What We Reported on Sept. 16
Crocs Inc. has cause to celebrate.
The lightweight clog maker this month received what insiders suggest is likely a lasting conclusion to a legal saga that has stretched on for years.
The Patent Trial and Appeal Board — an arm of the U.S. Patent and Trademark Office — on Sept. 10 handed down a reversal of an earlier decision, in which the USPTO rejected the cornerstone design patent that made the Crocs brand a household name.
Effectively, the Patent Trial and Appeal Board held that the design patent for the Classic Crocs clog — which had been rejected three times by the USPTO after a dispute was filed by one of the brand’s competitors, USA Dawgs — is valid, reinforcing the brand’s legal right to fight purported knockoffs.
“Crocs was handed a decisive victory from the Patent Trial and Appeal Board concerning the validity of its Classic design patent,” Crocs said in a statement emailed to FN today. “This final decision from a three-judge panel of the PTAB reverses a lower examiner’s rejection and confirms Crocs’ longstanding position that its patents on its iconic shoe remain valid and enforceable.”
Although this particular case dates back to 2012, Crocs and Dawgs — which filed for bankruptcy in 2018 and was acquired by California-based Optimal Investment Group that same year — have been involved in legal disputes for well over a decade.
Regarding the 2012 dispute — in which Dawgs sought to invalidate a Crocs design patent after the latter accused the former of copying the design — Crocs was dealt a blow in 2017 when the USPTO rejected the validity of its cornerstone patent for the third time.
Such a rejection is “final and nonappealable through the USPTO,” New York-based fashion lawyer Elizabeth Kurpis told FN at the time. This meant that if Crocs wanted to continue to fight alleged counterfeiters over purported knockoffs, it would have to accelerate its efforts and file an appeal with the USPTO’s Patent Trial and Appeal Board, which ultimately handed down the Sept. 10 decision in its favor.
“Overall, this is great news for Crocs, as they’ve overcome their initial patent rejection,” Kurpis said of the recent decision. “However, Dawgs can still appeal this decision to the Federal Circuit courts.”
Known for its comfortable lightweight clogs that are popular among kids, teens and workers in certain industries where slip-resistant footwear is necessary, Colorado-based Crocs is widely considered a commonly copied footwear brand and has been known to take legal action over what it deems copycat designs.
Now, it has new legal backing to go after more supposed counterfeiters, which the firm suggested it plans to do: “Crocs will continue to aggressively protect its intellectual property and enforce it against those who unfairly trade off of the brand’s goodwill and reputation,” a spokesperson for the brand said today.
While Crocs has had to fight purported counterfeiters for years, few battles amounted to the legal imbroglio it had with Nevada-based Dawgs.
In August 2016, Dawgs filed a 110-page complaint accusing 18 former and current Crocs employees and directors of violating antitrust laws in order to help the company gain an unfair edge in the clog footwear market. And in July 2017, Dawgs filed another suit, alleging that Crocs infringed on its Z-strap sandal and that several of its employees engaged in corporate sabotage and computer fraud. The antitrust claims filed by Dawgs were dismissed by the Colorado District Court in April 2017 and Dawgs dismissed the latter suit in November 2017.
The brand’s new owners, Optimal Investment Group, did not immediately respond to FN’s request for comment.