Crocs trying to monopolize marketplace, competitor says

Crocs ©

A family-owned, Nevada-based shoe company is taking on the giant shoe maker Crocs, accusing it of creating a monopoly by suing smaller competitors and putting them out of business.

In a lawsuit filed on Wednesday 10th September, in federal court in Nevada, USA Dawgs said Crocs Inc was using "sham" patent lawsuits in order to "litigate its competition out of the market."

"Crocs has managed to put everybody out of business," said Brian Elliott, the Las Vegas company's in-house attorney. "We're the last one standing from their original round of lawsuits and it's been a struggle with the weight of a billion dollar company that keeps filing lawsuits against you."

Crocs is by far the biggest manufacturer of the springy-soled clogs, made from ethyl vinyl acetate, a plastic. Although profits have declined recently, it reached $1 billion in annual sales in 2011 and has cornered more than 90 percent of the market, according to the complaint.

A representatives for Crocs, which is based in Colorado, said the company does not comment on pending litigation.

Dawgs said in the lawsuit that in 2006 Crocs obtained two patents it did not deserve because EVA-based shoes were already available. Crocs and its founder, Scott Seamans, however, "fraudulently concealed" relevant facts, including the shoes' Italian origins, from the U.S. Patent and Trademark Office to obtain the patents, according to the complaint.

Based on the patents, Elliott said, Crocs in 2011 won an import ban from the U.S. International Trade Commission, preventing competitors from selling clogs similar to its own in the United States.
Crocs also sued several other shoe makers for infringement, including Effervescent, Gen-X Sports and Holey Soles, the complaint said.

The Crocs suits against Dawgs, its distributor and one of its biggest clients, CVS, are on hold, Elliott said, because Dawgs has asked the USPTO to review Crocs' patents. Last year the agency issued a preliminary decision cancelling one of the two patents, he added.

Meanwhile, Dawgs said U.S. consumers were paying more for the popular clogs because competition in the sector had been "virtually eliminated."

The case is USA Dawgs, Inc v. Crocs, Inc, U.S. District Court for the District of Nevada, No. 14-cv-1461.

Source Reuters Reporting by Andrew Chung; Editing by Ted Botha and Dan Grebler ©