Dawgs agrees to pay Crocs to end a patent infringement complaint
The compensation of $6 million will end the case dating back to 2006
Dawgs USA has agreed to pay Crocs to conclude a patent infringement case the latter had brought against it. After years of litigation, in an offer of judgment, Dawgs finally agreed to the "judgment in favor of Crocs."
The payment includes the interest amount, costs, and attorneys' fees. However, the offer is not an admission that Dawgs was liable in this action or that Crocs suffered any damage. The offer relates solely to Crocs' claims against Dawgs and "is without prejudice" to Dawgs' related claims and counterclaims.
Crocs accepted the offer on 9 July, two days before a jury trial was scheduled to begin. It publicly declared victory stating it had secured a "long sought-after judgment of infringement."
In the meantime, Dawgs' Canadian affiliate Double Diamond Distribution (DDD), agreed to pay $55,000 to Crocs.
Daniel Hart, the executive vice president, and chief legal and risk officer at Crocs, said, "We are fiercely protective of the Crocs brand and our iconic DNA. We have zero tolerance for infringement of our intellectual property rights or for anyone who tries to benefit from the investments that we have made in our brand. The judgment not only reinforces the validity of our patent rights, but it also reinforces our unrelenting determination to take forceful steps to protect our brand equity."
Crocs originally sued DDD in 2006 as part of a larger complaint accusing it and 10 other entities of patent infringement, trade dress infringement and unfair competition. It amended the complaint in 2012 to add Dawgs as a defendant.
Dawgs had gone bankrupt in 2018 and the same year it was bought by the Optimal Investment Group.
Thereafter, Optimal sued Crocs on multiple occasions. It accused the footwear brand of using faulty patents to monopolize the plastic clog market, infringing on Dawgs' Z-Strap sandal, and committing computer fraud by having Dawgs' products taken off Zulily, an e-commerce company.
Dawgs had spent years challenging the validity of the design patent, US Patent No.D 517,789 (the '789 patent), at the heart of Crocs' original suit. The company filed its complaint less than a week after receiving the patent.
The United States Patent and Trademark Office (USPTO) favored Dawgs, ruling the patent invalid on multiple occasions, including for a third time in 2017. The USPTO's Patent Trial and Appeal Board, however, reversed the ruling in September 2019.
The end of Crocs' long-running crusade against Dawgs arrived just over a year after it began another sweeping legal battle.
Last year, Crocs announced it had filed 21 lawsuits against big and small companies that it alleged violated its protected and registered trademarks. The defendants included Skechers, Walmart, Hobby Lobby, and Loeffler Randall.
The litigation arrived one week after the United States International Trade Commission (USITC) agreed to investigate trademark infringement claims brought by Crocs against 23 companies.
The USITC had partially terminated its investigation on certain businesses, including Skechers, based on settlement agreements, consent orders and consent order stipulations. But other parties were added to the investigation.
The request for the USITC investigation roughly mirrors the strategy Crocs employed in 2006. Back then, the USITC declared its investigation in May, a month after Crocs filed its lawsuit, rather than a week before.
In 2008, though the USITC ruled against Crocs, the administrative law judge declared a non-infringement with respect to the '789 patent. He dubbed another patent invalid as obvious, which the Court of Appeals for the Federal Circuit reversed in 2010.
In July 2011, the USITC issued a general exclusion order directed against "infringing foam footwear products" and cease and desist orders directed against Double Diamond Distribution, Effervescent, and Holey Soles Holding Ltd.