LAS VEGAS (CN) – A Nevada federal judge partially dismissed and transferred an antitrust action against recreational clogs-maker Crocs to Colorado because of the suit’s similarity to a case there.
U.S. District Judge Richard F. Boulware II dismissed without prejudice an antitrust claim by U.S.A. Dawgs accusing Crocs of using bogus patent lawsuits to capture more than 90 percent of the ethyl vinyl acetate molded clog-type shoes market in the United States.
In September 2014, Dawgs accused Crocs of antitrust violations – which Crocs claimed was a “duplicative lawsuit” that closely mirrors a federal action already filed in Colorado.
Dawgs argued the two cases are different, with the Nevada action claiming antitrust and unfair business practices and the Colorado case involving patent infringement.
Boulware applied the “well-established ‘first to file rule,'” which allows a court to dismiss or transfer a complaint when there is pre-existing complaint involving similar parties and issues. He determined there is a “‘substantial overlap'” in the two cases and said the issue that Dawgs seeks to resolve is “at the heart” of the Colorado complaint.
“The court is unconvinced by Dawgs’ distinction” of the two cases, both of which accuse Crocs of fraudulently acquiring patents and filing oppressive patent-infringement claims against competitors to monopolize the market, Boulware said.
Because of the similarity of issues, the judge partly dismissed the complaint – choosing not to address a motion to dismiss under Nevada’s anti-SLAPP law – and ordered it transferred to Colorado.
In its complaint, Dawgs claims Crocs monopolized the EVA clog-type footwear market by “accumulating a number of patents, no matter how weak or narrow, and then asserting these patent rights far beyond the narrow scope of the actual patent claims through instituting a series of sham lawsuits in order to slowly litigate its competition out of the market.”
“These ill-founded, bad-faith patent infringement actions, and other accompanying anticompetitive conduct, constitute violations of the antitrust laws,” Dawgs claims.
“Competition in this product market has been suppressed and virtually eliminated,” causing consumers to pay more than necessary for the shoes, Dawgs says.
The company claims Crocs entered the EVA clog-type shoes market in 2001 by marketing a shoe originally manufactured and distributed by Canadian company Foam Creations in 1999. In 2006, Crocs fraudulently obtained two U.S. patents “after submitting diagrams and descriptions of the original EVA clog as designed by Battiston and manufactured since at least as early as 1999,” Dawgs says in its complaint.
Dawgs wants Crocs barred from violating the Sherman Antitrust Act and from actual monopolization and attempts to monopolize the market. It also seeks damages for intentional interference with contract and with prospective economic advantage, and unfair trade.
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