Crocs, Inc. v. Cheng's Enterprises, Inc. et al

Filing 504

ORDER. Crocs, Inc.'s Motion to Dismiss Counterclaims V-XII 227 is granted in part and denied in part and Scott Seamans' Motion to Dismiss Counterclaims VI-IX 231 is granted. Dawgs' seventh, ninth, tenth, eleventh, twelfth, thirteenth, and fourteenth claims for relief 487 are dismissed with prejudice. Defendants Scott Seamans and John and Jane Does 1-100 are dismissed from this lawsuit. By Judge Philip A. Brimmer on 3/31/17. (pabsec)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 06-cv-00605-PAB-KMT
(Consolidated with Civil Action No. 16-cv-02004-PAB-KMT)
Civil Action No. 06-cv-00605-PAB-KMT
CROCS, INC.,
Plaintiff,
v.
EFFERVESCENT, INC.,
HOLEY SOLES HOLDINGS, LTD.,
DOUBLE DIAMOND DISTRIBUTION, LTD., and
U.S.A. DAWGS, INC.,
Defendants.
Civil Action No. 16-cv-02004-PAB-KMT
U.S.A. DAWGS, INC. and
DOUBLE DIAMOND DISTRIBUTION, LTD.,
Plaintiffs,
v.
RONALD SNYDER,
DANIEL HART,
THOMAS J. SMACH,
ANDREW REES,
GREGG RIBATT,
ANDREW REDDYHOFF,
GEORGE B. BOEDECKER, JR.,
LYNDON HANSON,
DONALD LOCOCO,
RAYMOND CROGHAN,
RONALD FRASCH,
MICHAEL MARGOLIS,
JEFFREY LASHER,
MICHAEL E. MARKS,
PRAKASH MELWANI,

JOHN P. MCCARVEL,
ERIK REBICH,
SARA HOVERSTOCK, and
JOHN AND JANE DOE DEFENDANTS 1-30,
Defendants.

ORDER

This matter is before the Court on Crocs, Inc.’s Motion to Dismiss Counterclaims
V-XII [Docket No. 227] and Scott Seamans’ Motion to Dismiss Counterclaims VI-IX
[Docket No. 231]. The Court has jurisdiction pursuant to 28 U.S.C. § 1331.
I. BACKGROUND1
A. Procedural Background
Plaintiff Crocs, Inc. (“Crocs”) filed Case No. 06-cv-00605-PAB-KMT on April 3,
2006, alleging, inter alia, infringement of United States Patent Nos. 6,993,858 (the “’858
patent”) and D 517,789 (the “’789 patent”). Docket No. 1.
On May 12, 2006, defendants Effervescent, Inc., Holey Soles Holdings, Ltd., and
former defendant Collective Licensing International, LLC moved to stay this case
pending proceedings under Section 337 of the Tariff Act of 1930 before the
International Trade Commission (“ITC”). Docket No. 26. The Court granted the motion
on May 16, 2006 and administratively closed the case. Docket No. 31. In 2012, during
a brief reopening of the case, Crocs added one of the Dawgs2 entities as a named
1

The facts are taken from the amended answer and counterclaims [Docket No.
209] and are presumed to be true for the purposes of this order.
2

For simplicity, the Court adopts the convention of the parties in the underlying
motions and refers to Double Diamond Distribution, Ltd. and U.S.A. Dawgs, Inc.,
2

defendant and Dawgs asserted counterclaims, Docket No. 119, before the action was
stayed pending a reexamination of the patents-in-suit. Docket No. 137. In February
2016, Dawgs filed motions to reopen the case and lift the stay, Docket Nos. 167, 168,
which the Court granted. Docket No. 184. On May 31, 2016, Dawgs filed its first
amended answer to the amended complaint and counterclaims against Crocs, Scott
Seamans, and John and Jane Does 1 through 100. Docket No. 209. On June 28,
2016, Crocs and Seamans moved to dismiss Dawgs’ counterclaims. Docket Nos. 227,
231.
On February 24, 2017, Crocs filed a second amended complaint, adding claims
for infringement of U.S. Patent No. D632,465 (“’465 Patent”). Docket No. 473. On
March 10, 2017, Dawgs filed a second amended answer and counterclaims. Docket
No. 487. The second amended answer and counterclaims added three claims for
declaratory judgment relief related to the ’465 Patent. Docket No. 487 at 50-51,
¶¶ 130-33; 52, ¶¶ 143-46; 70-72, ¶¶ 223-35. T he second amended answer and
counterclaims also added minor factual details to Crocs’ remaining counterclaims.
Compare Docket No. 209 at 39-83, ¶¶ 75-262 with Docket No. 487 at 49-108,
¶¶ 122-347. The parties dispute the propriety of Dawgs’ modifications of its
counterclaims in response to the filing of a second amended complaint. See Docket
No. 448 at 4-6; Docket No. 493 at 5.
Because the modified factual allegations in the second amended counterclaims
do not change the Court’s analysis with respect to the pending motions to dismiss, the

collectively as “Dawgs.”
3

Court finds it appropriate to consider Crocs and Seamans’ motions despite the fact that
they are directed to the first amended answer and counterclaims. Where the second
amended answer and counterclaims provides relevant additional factual detail, the
Court notes as much. The findings of the Court apply to the equivalent counterclaims in
the second amended answer and counterclaims.
B. Factual Allegations
Crocs is the leading manufacturer of “molded clog-type footwear products.” Id.
at 18, ¶ 20. Dawgs is a competitor of Crocs and sells a variety of footwear, including
molded clogs. Id. at 20, ¶ 24. According to the counterclaims, Crocs had been
manufacturing and selling clog-shaped shoes made from ethyl vinyl acetate (“EVA”)
since 2002. Id. at 18, ¶ 20. At its inception, Crocs “decided to m arket the exact shoe
that had already been developed and was already being manufactured and distributed
by Foam Creations, Inc.” Id. That shoe, in turn, was made using molds designed by
Ettore Battiston, an Italian inventor. Id. The “Battiston Molded Clog” was sold in the
United States as the “AquaClog,” “Explorer,” and “Waldies,” among other names. Id. In
the early 2000s, other rubber clogs were available for sale in the United States. For
example, BIHOS S.R.L. (“BIHOS”), an Italian shoe designer and manufacturer,
distributed and sold molded clog footwear under the brand name Calzuro starting in the
mid-1980s. Id. at 19, ¶ 21. By 2001, Calzuro was selling a molded clog that featured a
“pivoting strap” in the United States. Id.
On February 7, 2006, the U.S. Patent and Trademark Office (“PTO”) issued the
’858 patent. Id. at 20, ¶ 25. Crocs’ co-founder, Scott Seamans, was listed as the sole

4

inventor. Id. Dawgs alleges that “[e]ach and every functional feature disclosed in the
[’858] patent application, except the heel strap, already existed in the Battiston Molded
Clog.” Id. at 21, ¶ 26. The ’858 patent also contains diagrams and descriptions of the
Battiston molded clog, with the addition of a pivoting strap. Id. According to Dawgs,
“[s]traps have existed for many years on a wide variety of footwear.” Id. By 2001,
Calzuro sold a molded clog with a pivoting strap attached by a rivet. Id. In addition, the
features identified in the ’858 patent “were disclosed and described in Italian (utility)
Patent 00245068 filed in June 1998, published on December 22, 1999, and granted in
March 2002” (“the BIHOS Patent”). Id.
On March 28, 2006, the PTO issued the ’789 design patent. Id. at 22, ¶ 28.
Seamans was again listed as the sole inventor. Id. According to Dawgs, the ’789
patent “contains diagrams of the base shoe that are substantially similar to the
diagrams that were created by Ettore Battiston in 2000 and assigned from Battiston to
[Foam Creations, Inc.], with a strap added that serves a functional purpose and such as
had previously existed for many years on a wide variety of footwear, including clogs.”3
Id. Accordingly, the shoe in the ’789 patent is “not new and inventive nor invented and
designed by Seamans or by Crocs.” Id.
Crocs has been unable to secure patents similar to the ’858 and ’789 patents
outside the United States because of the “well-known existence of prior sales, the
widely-recognized existence of invalidating prior art, and the established identity of the
true and proper inventorship and origin of the shoe.” Id. at 24-25, ¶ 34; see also id.
3

Foam Creations, Inc. is a predecessor or related entity to Crocs. Docket No.
209 at 18, ¶ 20.
5

at 25-30, ¶¶ 35-49.
On March 31, 2006, just after the ’789 patent issued, Crocs filed a complaint with
the ITC against Double Diamond Distribution, Ltd. (“Double Diamond”) and other
respondents, alleging infringement and seeking a General Exclusion Order to ban the
importation of molded clogs that infringed on Crocs’ patents. Id. at 30, ¶ 50. The
presiding Administrative Law Judge (“ALJ”) and the ITC initially found that Double
Diamond did not infringe the ’789 patent and that the ’858 patent w as invalid as obvious
in view of prior art. Id. at 31, ¶¶ 52-53. However, the Federal Circuit reversed the
determination that the ’858 patent was obvious and remanded the case to the ITC for
further consideration. Id., ¶ 54. The ALJ and the ITC then determined that Double
Diamond and others had failed “to establish that the asserted patents were
unenforceable.” Id. at 32, ¶¶ 55-56. According to Dawgs, Crocs acted in the ITC
proceedings “knowing that these patents were invalid and unenforceable.” Id., ¶ 57.
On April 3, 2006, Crocs filed the instant lawsuit alleging patent infringement even
though Crocs “knew the patents identified incorrect inventorship and had been obtained
by withholding material information from the patent examiner.” Id. at 30, ¶ 51. On
August 6, 2012, Crocs filed its first amended complaint, adding U.S.A. Dawgs, Inc.
(“U.S.A. Dawgs”) as a named defendant. Id. at 32, ¶ 58. Dawgs claims that this
litigation is objectively baseless in light of the unenforceability of the patents and
because, by the time Crocs filed the first amended complaint, it “knew or should have
known” that the BIHOS patent “rendered the claims of at least the ’858 patent” invalid.
Id.

6

On August 3, 2012, Double Diamond filed an application for inter partes
reexamination of the ’858 patent with the PTO. Id. at 33, ¶ 60. On August 8, 2012, as
retaliation for the filing of the application for reexamination, Crocs initiated a lawsuit
against CVS Pharmacy, a retailer who sold USA Dawgs products. Id. at 33-34, ¶¶ 6162. On August 24, 2012, USA Dawgs filed an application for inter partes reexamination
with the PTO of the ’789 patent. Id. at 34, ¶ 63. On April 29, 2013, the PT O issued a
non-final Office Action rejecting the single claim of the ’789 patent. Id., ¶ 64. Crocs
filed a response on July 29, 2013, which included a declaration from Scott Seamans
stating that he is “the sole inventor” of the ’789 patent. Id. at 34-35, ¶ 65. On February
11, 2016, the PTO once again rejected the sole claim of the ’789 patent as
unpatentable and closed the reexamination prosecution related to that patent. Id. at 35,
¶ 66.
C. Dawgs’ Counterclaims
Dawgs claims that, as a result of the foregoing conduct, Crocs has secured its
own success, obtaining a market share for “molded clog-type footwear” in excess of
90%, and negatively impacted Dawgs. Id. at 36-38, ¶¶ 69-74.
Dawgs brings twelve counterclaims against Crocs, Scott Seamans, and John
and Jane Does 1-100. Dawgs seeks several forms of declaratory relief against Crocs:
a declaratory judgment for non-infringement of the ’858 patent (first claim for relief); a
declaratory judgment for non-infringement of the ’789 patent (second claim for relief); a
declaratory judgment of invalidity of the ’858 patent (third claim for relief); a declaratory
judgment of invalidity of the ’789 patent (fourth claim for relief); and a declaratory

7

judgment of unenforceability of the ’858 patent and the ’789 patent based on
inequitable conduct (fifth claim for relief). Id. at 39-54, ¶¶ 75-149. In addition, Dawgs
alleges claims related to anticompetitive conduct against, variously, Crocs, Seamans,
and subsets of the John and Jane Does: actual monopolization in violation of § 2 of the
Sherman Act (sixth claim for relief); attempted monopolization in violation of § 2 of the
Sherman Act (seventh claim for relief); conspiracy to restrain trade in violation of § 1 of
the Sherman Act (eighth claim for relief); conspiracy to monopolize in violation of § 2 of
the Sherman Act (ninth claim for relief); unlawful exclusionary arrangements,
agreements and conduct in violation of § 3 of the Clayton Act and §§ 1 and 2 of the
Sherman Act (tenth claim for relief); intentional interference with business advantage
(eleventh claim for relief); and violation of § 43(a) of the Lanham Act (twelfth claim for
relief). Id. at 54-83, ¶¶ 150-262.
Crocs has moved to dismiss counterclaims five through twelve.4 Docket No. 227.
Scott Seamans has moved to dismiss counterclaims six through nine5 (the subset of
counterclaims brought against him). Docket No. 231.
II. STANDARD OF REVIEW
Dismissal of a claim under Rule 12(b)(6) is appropriate where a party fails to
state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Rule 8
requires “a short and plain statement of the claim showing that the pleader is entitled to

4

In the second amended answer and counterclaims, these claims for relief are
counterclaims seven, and nine through fifteen. Docket No. 487 at 53-70, ¶¶ 147-222;
72-108, ¶¶ 236-347.
5

In the second amended answer and counterclaims these claims for relief are
counterclaims nine through twelve. Docket No. 487 at 72-100, ¶¶ 236-316.
8

relief.” Fed. R. Civ. P. (8)(a)(2). Rule 8(a)’s “short and plain statement” mandate
requires that a party allege enough factual matter that, taken as true, makes his “claim
to relief . . . plausible on its face.” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir.
2008) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence
that the parties might present at trial, but to assess whether the plaintiff’s complaint
alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v.
Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003). In doing so, the Court “must
accept all the well-pleaded allegations of the complaint as true and must construe them
in the light most favorable to the plaintiff.” Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210,
1215 (10th Cir. 2007).
Generally, “[s]pecific facts are not necessary; the statement need only ‘give the
defendant fair notice of what the claim is and the grounds upon which it rests.’”
Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Twombly, 550 U.S. at
555) (ellipses omitted). The “plausibility” standard requires that relief must plausibly
follow from the facts alleged, not that the facts themselves be plausible. Bryson, 534
F.3d at 1286.
However, “where the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has alleged – but it has not
shown – that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009) (internal quotation marks and alteration marks omitted). Thus, even though
modern rules of pleading are somewhat forgiving, “a complaint still must contain either

9

direct or inferential allegations respecting all the material elements necessary to sustain
a recovery under some viable legal theory.” Bryson, 534 F.3d at 1286 (quotation marks
and citation omitted).
III. ANALYSIS
A. Inequitable Conduct (Fifth Claim for Relief)
Dawgs contends that the ’789 patent and the ’858 patent are unenf orceable as a
result of false declarations of inventorship and Crocs’ failure to disclose information
material to patentability. The elements of inequitable conduct are: (1) an individual
associated with the filing and prosecution of a patent application made an affirmative
misrepresentation of a material fact, failed to disclose material information, or submitted
false material information; and (2) the individual did so with a specific intent to deceive
the PTO. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 n.3 (Fed. Cir.
2009) (citing Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365
(Fed. Cir. 2008); Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178, 1181 (Fed. Cir.
1995); and 37 C.F.R. § 1.56 (2008)). A heightened pleading standard applies to claims
for inequitable conduct. Id. at 1326. It is therefore necessary for a party claiming
inequitable conduct to “identify the specific who, what, when, where, and how of the
material misrepresentation or omission [] before the PTO.” Id. at 1328.
1. Inventorship
Dawgs argues that the ’858 and ’759 patents are unenf orceable as a result of
misrepresentations made by Seamans and Crocs in the patent applications. According
to Dawgs, Crocs filed U.S. Application No. 10/603,126 (“’126 application”) on June 23,

10

2003. Docket No. 209 at 41, ¶ 93. The ’126 application was granted as the ’858
patent. Id. at 45, ¶ 113. The ’126 application included a declaration f rom Scott
Seamans, which provided that:
I/we believe that I/we am/are the original and first inventor(s) of the
subject matter which is claimed and for which a patent is sought;
I/we have reviewed and understand the contents of the above-identified
application, including the claims, as amended by any amendment
specifically referred to above;
I/we acknowledge the duty to disclose to the United States Patent and
Trademark Office all information known to me/us to be material to
patentability as defined in 37 CFR 1.56, including for continuation-in-part
applications, material information which became available between the
filing date of the prior application and the national or PCT International
filing date of the continuation-in-part application.
All statements made herein of my/our own knowledge are true, all
statements made herein on information and belief are believed to be true,
and further that these statements were made with the knowledge that
willful false statements and the like are punishable by fine or
imprisonment, or both, under 18 U.S.C. 1001, and m ay jeopardize the
validity of the application or any patent issuing thereon.
Id. at 43-44, ¶ 109. Dawgs alleges that the Seamans declaration is false because
Seamans was not “the original and first inventor of the subject matter which is claimed.”
Id. at 44, ¶ 110. Dawgs does not specifically allege who should have been named as
an additional inventor on the ’126 application. Instead, the f ifth counterclaim alleges
that the three independent claims of the ’126 application were “directed to, intended to
cover, and [did] in fact cover” the molded clog designed by Ettore Battiston (“Battiston
molded clog”) and the work-shoe created by Battiston (“Battiston work-shoe”). Id. at 4243 ¶¶ 96, 100, 102. Dawgs goes on to allege that, “at the time the ’126 application was
filed,” both Seamans and Crocs were “aware” of the Battiston work-shoe, the Battiston
11

molded clog, and that Battiston conceived of the Battiston molded clog. Id. at 43,
¶¶ 104-107. In its response to the motion to dismiss, Dawgs reiterates that the claims
of the ’858 patent “were directed to the Battiston Molded Clog and the Battiston workshoe” and that “Seamans was not the inventor of this subject matter.” Docket No. 249
at 5. Dawgs asserts that the misrepresentation of inventorship was material to the
patentability of the ’126 application. Docket No. 209 at 46, ¶ 118.
On May 28, 2004, Crocs filed U.S. Application No. 29/206,427 (“’427
application”), which was granted as the ’789 patent. Id. at 47, ¶ 121; 49, ¶ 135. Dawgs
states that, because the ’427 application claim ed priority to the ’126 application, the
’427 application is infected by the Seamans declaration. Id. at 47, ¶¶ 122-23.
Dawgs claims that Seamans also issued a false declaration during the
prosecution of the ’858 patent, which Dawgs claims infected the ’427 application. Id. at
47, ¶¶ 121-23. During the prosecution of the ’858 patent, Seamans submitted a
declaration stating:
I believe I am the original, first and sole inventor of the subject matter
which is claimed and for which a patent is sought on the invention entitled:
FOOTWEAR, which was filed on May 28, 2004, and assigned serial
number 29/206,427.
I have reviewed and understand the contents of the above identified
specification, including the claims, as amended by any amendment
referred to above. I acknowledge the duty to disclose information which is
material to patentability as defined in Title 37, Code of Federal
Regulations, Section 1.56.
Id. at 48, ¶ 131. As alleged in regard to the ’126 application and the ’858 patent,
Dawgs refers to the Battiston Molded Clog as being referenced by the claims of the
’427 application. Id. at 47, ¶ 125. According to Dawgs, the Seamans declaration was
12

false because Seamans was not “the original, first and sole inventor of the subject
matter which is claimed and for which a patent [was] sought.” Id., ¶ 132.
During the reexamination of the ’789 patent, Seamans and Crocs filed
statements that Seamans is “the sole inventor of” the ’789 patent and that the drawings
contained in the ’416 and ’126 applications “were renderings of a strapped shoe that
[Seamans] designed.” Id. at 52, ¶ 145. Dawgs alleges that these statements were
false. Id. at 53, ¶ 146.
In regard to the inventorship allegations of the fifth counterclaim, Crocs argues
that Dawgs has not pled facts suggesting that Ettore Battiston was a joint inventor along
with Scott Seamans and, therefore, Seamans’ declarations were not false as a matter
of law. Docket No. 227 at 3-4. The fifth counterclaim posits that, because the
independent claims of the ’126 application “cover” the Battiston molded clog and workshoe, and the figures in the ’427 application “depict” the Battiston molded clog,
Seamans cannot be the sole inventor. Docket No. 209 at 42-43, ¶¶ 96-97, 99-100,
102-103; 47, ¶¶ 126-28. In other words, Dawgs claims that, because the Battiston
molded clog and Battiston work-shoe are prior art, Seamans cannot be the named
inventor for purposes of the ’126 or ’427 applications – or the ’858 and ’789 patents that
were issued as a result. However, “[a] contribution of information in the prior art cannot
give rise to joint inventorship because it is not a contribution to conception.” Eli Lilly &
Co. v. Aradigm Corp., 376 F.3d 1352, 1362 (Fed. Cir. 2004). Accordingly, Dawgs does
not sufficiently allege that Seamans was not the inventor, or the sole inventor, of the
patents at issue. Dawgs also cannot show that Battiston and Seamans were joint

13

inventors of the relevant patents because the fifth counterclaim does not allege that
Seamans and Battiston collaborated or worked together to conceive of the relevant
invention.6 Vanderbilt Univ. v. ICOS Corp., 601 F.3d 1297, 1302 (Fed. Cir. 2010) (“A
joint invention is the product of collaboration of the inventive endeavors of two or more
persons working toward the same end and producing an invention by their aggregate
efforts.”) (quoting Monsanto Co. v. Kamp, 269 F. Supp. 818, 824 (D.D.C. 1967)).
Dawgs’ fifth counterclaim fails to state a claim for inequitable conduct based on
Seamans’ allegedly false declarations regarding inventorship and that portion of its
counterclaim will be dismissed.
2. Omissions
Dawgs also bases its claim for inequitable conduct on Crocs’ failure to disclose
information material to patentability in the prosecution of the ’858 and ’789 patents.
Docket No. 209 at 49-52, ¶¶ 137-44. Dawgs alleges that Crocs failed to disclose the
following: the identity and contributions of Ettore Battiston; correct inventorship; prior
sales of the patented shoes; prior art design and sales of “WALDIES”; prior art design
and sales of “EXPLORER”; Crocs’ and/or Seamans’ prior marketing sale and/or offer
for sale of the shoes relevant to the patents-in-suit; the BIHOS patent; and the Calz uro
molded clog. Id. at 49-51, ¶ 137. “[I]nequitable conduct, while a broader concept than
6

The seventh counterclaim of the second amended answer and counterclaims
states that “Seamans had met with Battiston prior to June 23, 2003,” but does not
allege that they collaborated. Docket No. 487 at 57, ¶ 172. Dawgs’ theory – that
Seamans is not the inventor of the relevant patents because he relied upon Battiston’s
prior art – remains the basis for Dawgs’ claim in the seventh counterclaim. See Docket
No. 487 at 58, ¶ 180 (“[E]ven if Seamans did in fact conceive of the addition of a heelstrap to the Battiston Molded Clog . . . any contribution Seamans made later was in
conjunction with Battiston’s design.”)
14

fraud, must be pled with particularity under Rule 9(b).” Exergen, 575 F.3d at 1326.
Crocs first argues that Dawgs’ allegations of “intentional concealment are
implausible because they contradict the ITC findings.” Docket No. 227 at 5. Crocs
does not argue that Dawgs’ arguments are barred by res judicata or collateral estoppel.
ITC findings related to the validity of patents do not have preclusive effect. See
Bio-Tech. Gen. Corp. v. Genentech, Inc., 80 F.3d 1553, 1563-64 (Fed. Cir. 1996) (ITC
decisions do not bind a subsequent federal court under the doctrine of claim
preclusion); Texas Instruments, Inc. v. U.S. Int’l Trade Comm’n, 851 F.2d 342, 344
(Fed. Cir. 1988) (“[T]his court has stated that the ITC's determinations regarding patent
issues should be given no res judicata or collateral estoppel effect.”). Moreover, Crocs
cites no authority to use non-binding ITC findings to measure the “plausibility” of claims,
although that may be true for certain allegations. The Court finds no basis to dismiss
portions of the fifth counterclaim because ITC rulings are inconsistent with them.
Crocs next argues that, even if the information described by Dawgs was withheld
from the PTO, Dawgs has failed to plead its claims with particularity. Docket No. 227 at
5. “[T]o plead the ‘circumstances’ of inequitable conduct with the requisite ‘particularity’
[required by Rule 9(b)] . . . the pleading must identify the specific who, what, when,
where, and how of the material misrepresentation or omission committed before the
PTO.” Exergen, 575 F.3d at 1328. Dawgs’ pleadings fail to meet this heightened
standard.
Dawgs has failed to plead facts showing that the information withheld by Crocs
was material. In the eight paragraphs in this portion of the fifth counterclaim, Docket

15

No. 209 at 49-52, ¶¶ 137-44, there is one ref erence to materiality, namely, that the
“withheld references” were “clearly material.” Id. at 51, ¶ 138. In Exergen, the court
considered the adequacy of a pleading that alleged inequitable conduct and stated that
various withheld references were “material” and “not cumulative to the information
already of record.” 575 F.3d at 1329. The Federal Circuit found that the allegations
were deficient because they did not “identify the particular claim limitations, or
combination of claim limitations, that are supposedly absent from the information of
record.” Id. The court stated that such allegations are necessary to explain why
“withheld information is material” and how an examiner “would have used this
information in assessing the patentability of the claims.” Id. at 1329-30. Dawgs’
allegations are similarly deficient. The bare allegation that withheld references are
“clearly material” does not explain why or how any withheld information was material to
patentability as required by Rule 9(b). Accordingly, Dawgs’ fifth counterclaim is
deficient.
Crocs also argues that Dawgs fails to plead the requisite scienter for the claimed
omissions. Docket No. 227 at 5. W hile a party may allege “knowledge” and “intent”
generally, the pleadings must allege facts “from which a court may reasonably infer that
a party acted with the requisite state of mind.” Exergen, 575 F.3d at 1327. In alleging
the elements of inequitable conduct, the pleading party must present facts from which it
may be “plausibly inferred [that] . . . the intent to deceive is the single most likely
explanation for the non-disclosure.” Pfizer Inc. v. Teva Pharm. USA, Inc., 803 F. Supp.
2d 409, 432 (E.D. Va. 2011). A pattern of non-disclosures by a particular individual can

16

support an inference that non-disclosure was made with specific intent to deceive. See
Sanders v. The Mosaic Co., 418 F. App’x 914, 919 (Fed. Cir. 2011) (unpublished)
(affirming denial of a motion to dismiss where the pleadings alleged that an expert
failed to disclose pertinent business relationships, omitted relevant publications from a
curriculum vitae submitted to the PTO, and used an expert declaration written in
significant part by an employee of another party).
The fifth counterclaim states that deceptive intent is evidenced by several facts:
Crocs’ withholding of references from the PTO, Crocs’ sale of shoes in 2002 that fell
within the scope of the ’789 patent, Crocs’ non-disclosure of a copyright agreement with
a third party, Crocs’ use of stickers to add a Crocs logo to another manufacturer’s
shoes it sold, Crocs’ refusal to name additional inventors, and Crocs’ decision not to
enforce its patent against the Calzuro molded clog. Docket No. 209 at 51-52, ¶¶ 138143. However, non-disclosure of facts, without more, does not show specific intent to
deceive the PTO. Pfizer, 803 F. Supp. 2d at 432. Dawgs nowhere links the alleged
non-disclosures to deceptive intent.7 For instance, Dawgs states that Crocs failed to
disclose the existence of a copyright agreement, but does not state how or why the
copyright agreement was material to patentability. Docket No. 209 at 51, ¶ 140. While

7

In the seventh counterclaim of the second amended answer and counterclaims,
Dawgs argues that prior sales were “widely known” within Crocs and Crocs knew “that if
Crocs’ own sales in 2002 were presented to the Patent Office that they would not be
able to obtain the ’789 patent.” Docket No. 487 at 67, ¶¶ 211-12. T o support this
statement, Dawgs points out that “the Patent Office has repeatedly rejected the ’789
patent during reexamination as unpatentable in view of a publication from Crocs’
website promoting the footwear that it concedes is ‘within the scope’ of the patent.”
Docket No. 487 at 67, ¶ 211. This amended counterclaim is inadequate because it
does not plausibly suggest intent to deceive; it merely shows knowledge and materiality.
17

Dawgs does allege that Crocs chose not to challenge the Calzuro molded clog because
the BIHOS reference would have led to the invalidation of the ’858 patent, 8 Docket No.
209 at 52, ¶ 143, there is no factual allegation that a specific individual with a duty to
disclose information to the PTO believed that the Calzuro molded clog was an infringing
product. Exergen, 575 F.3d at 1330 (“[O]ne cannot assume that an individual, who
generally knew that a reference existed, also knew of the specific material information
contained in that reference.”); id. at 50-51, ¶ 137 (g-h) (describing the BIHOS patent
and Calzuro Molded Clog without reference to individuals or subjective knowledge).
Accordingly, because Dawgs fails to allege facts supporting an inference of
inequitable conduct for Crocs’ alleged omissions, that portion of Dawgs’ fifth
counterclaim will be dismissed.
B. Monopolization Counts (Sixth, Seventh, and Ninth Claims for Relief)
Dawgs’ sixth, seventh, and ninth claims for relief all relate to violations of the
Sherman Act by Crocs, Seamans, and the John and Jane Does. Docket No. 209
at 54-68, ¶¶ 150-194; 72-75, ¶¶ 213-231. “T he offense of monopoly under § 2 of the
Sherman Act has two elements: (1) the possession of monopoly power in the relevant
market and (2) the willful acquisition or maintenance of that power.” Christy Sports,
LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1192 (10th Cir. 2009) (quoting United
States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)). Therefore, to state a claim for
monopolization, Dawgs must plead power in a relevant market and anticompetitive
8

According to the first amended answer and counterclaims, the Calzuro molded
clog was made of rubber, not foam. Docket No. 209 at 19, ¶ 21. Crocs states that this
fact puts the Calzuro molded clog outside the scope of its patents. Docket No. 227 at 5
n.6.
18

conduct. Id.
Both Crocs and Seamans raise identical arguments concerning Dawgs’
monopoly claims, the sixth, seventh, and ninth claims for relief. See Docket No. 227 at
6-15, 18-19; Docket No. 231 at 3-10. Accordingly, the Court considers these claims
together.
1. Anticompetitive Conduct
The anticompetitive conduct discussed in the first amended counterclaims
relates to a pattern of sham litigation and the enforcement of fraudulently procured
patents. Docket No. 209 at 61-62, ¶ 173. “T hose who petition government for redress
are generally immune from antitrust liability.” Prof’l Real Estate Inv’rs, Inc. v. Columbia
Pictures Indus., Inc., 508 U.S. 49, 56 (1993) (“PRE”). This protection stems from the
First Amendment right to petition the Government. City of Columbia v. Omni Outdoor
Advert., Inc., 499 U.S. 365, 379 (1991). Even if a party’s motives in seeking redress
from the government are anti-competitive, the Noerr-Pennington doctrine “shields from
the Sherman Act a concerted effort to influence public officials regardless of intent or
purpose.” Id. at 380 (citing E. R. R. Presidents Conference v. Noerr Motor Freight, Inc.,
365 U.S. 127, 141 (1961); United Mine Workers of Am. v. Pennington, 381 U.S. 657,
670 (1965)). This immunity applies to individuals and entities who seek relief in the
courts. PRE, 508 U.S. at 56-57 (discussing California Motor Transport Co. v. Trucking
Unlimited, 404 U.S. 508 (1972)). Because Crocs has invoked the Noerr-Pennington
doctrine, the burden is on Dawgs to show that it does not apply. Lala v. Frampton, No.
07-cv-02144-MSK-CBS, 2008 WL 4059874, at *6 (D. Colo. Aug. 28, 2008) (citing Aetna

19

U.S. Healthcare, Inc. v. Hoechst Aktiengesellschaft, 54 F. Supp. 2d 1042, 1053 (D.
Kan. 1999)).
There are two relevant exceptions to the Noerr-Pennington doctrine. First, under
the so-called Walker Process exception, where a patent is procured by fraud, immunity
does not apply to the enforcement of that patent. See Walker Process Equip., Inc. v.
Food Mach. & Chem. Corp., 382 U.S. 172 (1965). Second, immunity does not apply
where petitioning the government “is a mere sham to cover . . . an attempt to interfere
directly with the business relationships of a competitor.” PRE, 508 U.S. at 56 (citing
Noerr, 365 U.S. at 144).
In order to prevail on a Walker Process claim, Dawgs must allege that the party
seeking to enforce a patent “obtained the patent by knowing and willful fraud on the
[PTO] and maintained and enforced the patent with knowledge of the fraudulent
procurement.” TransWeb, LLC v. 3M Innovative Properties Co., 812 F.3d 1295, 1306
(Fed. Cir. 2016). In support of its monopoly allegations, Dawgs refers to the same
allegations underlying its claims for inequitable conduct, namely, that Crocs, Seamans,
and the John and Jane Does “fraudulently procured patents from the U.S. Patent Office
by failing to disclose proper inventorship as well as known material, invalidating prior
art, and prior sales.” Docket No. 209 at 58, ¶ 163. T his anticompetitive conduct relates
to the same thing – procuring and enforcing patents. See id. at 58-60, ¶¶ 163-70.
Crocs argues that Dawgs has failed to adequately allege fraud on the PTO as
required to state a Walker Process claim. Docket No. 227 at 13. In response, Dawgs
directs the Court to its arguments in support of its inequitable conduct claim. Docket

20

No. 249 at 8 (“These arguments all fail for the same reasons that Crocs’ criticism of the
inequitable conduct claims fails.”). “[T]he showing required for proving inequitable
conduct and the showing required for proving the fraud component of Walker Process
liability may be nearly identical.” Transweb, 812 F.3d at 1307. However, the Court has
already rejected Dawgs’ inequitable conduct claim. For the reasons discussed above,
Dawgs’ allegations of anticompetitive conduct are factually inadequate and fail to plead
the scienter required to support a Walker Process claim. Dawgs has not carried its
burden of showing that Crocs’ conduct falls within the Walker Process exception to
Noerr-Pennington immunity. Accordingly, the Court considers whether Dawgs has
adequately alleged a pattern of sham litigation.
The sham litigation exception consists of two parts. First, “the lawsuit must be
objectively baseless in the sense that no reasonable litigant could realistically expect
success on the merits.” Second, from the subjective perspective of the accused party,
the lawsuit must conceal “an attempt to interfere directly with the business relationships
of a competitor.” PRE, 508 U.S. at 60-61. The classic example of a sham lawsuit is the
filing of frivolous objections to the license application of a competitor simply to impose
expense and delay. See California Motor Transport Co. v. Trucking Unlimited, 404 U.S.
508, 513 (1972). There is a “presumption that the assertion of infringement of a duly
granted patent is made in good faith.” iLOR, LLC v. Google, Inc., 631 F.3d 1372, 1377
(Fed. Cir. 2011) (quoting Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d
1378, 1382 (Fed. Cir. 2005)).
Crocs states that its patent lawsuits cannot be considered objectively baseless

21

because Crocs has prevailed against Dawgs in the Federal Circuit and the ITC. Docket
No. 227 at 10. The Court agrees. “A winning lawsuit is by definition a reasonable effort
at petitioning for redress and therefore not a sham.” PRE, 508 U.S. at 60 n.5. The
Federal Circuit considered and rejected the argument that the ’858 patent was obvious
in light of prior art. Docket No. 209 at 31, ¶ 54; see also Crocs, Inc. v. Int’l Trade
Comm’n, 598 F.3d 1294, 1311 (Fed. Cir. 2010) (“In light of the prior art teaching away
from the claimed invention and the claimed features that do not appear in the prior art,
this court detects several reasons at the time of the invention that an ordinary artisan
would not have been motivated even to try, let alone make, this inventive
combination.”). These rulings establish that Crocs’ lawsuits are not objectively
baseless. Dawgs argues that, because Crocs is engaged in a “pattern” of litigation,
success on the merits on one occasion does not show it is not engaged in a sham
litigation campaign. Docket No. 249 at 9. However, the series of lawsuits described in
the sixth, seventh, and ninth counterclaims all relate to the enforcement of the same
patents. Docket No. 209 at 30-33,¶¶ 50-59. In lig ht of Crocs’ success before the ITC,
Crocs’ lawsuits had potential merit. Dawgs does not overcome the presumption that
Crocs’ assertion of infringement of its patents is not made in good faith.
Dawgs has not pled sufficient facts to support a claim based on fraud on the
PTO or demonstrated that Crocs is engaged in “sham” litigation sufficient to fit within an
exception to Noerr-Pennington immunity. Accordingly, the Court finds that Crocs is
immune from antitrust liability for the conduct described in the sixth counterclaim, which

22

will be dismissed.9
2. Attempted Monopolization and Conspiracy to Monopolize
A claim for attempted monopolization must allege “(1) that the defendant has
engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize
and (3) a dangerous probability of achieving monopoly power.” Christy Sports, 555
F.3d at 1192 (quoting Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)).
To state a claim for conspiracy to monopolize, Dawgs must plead “conspiracy, specific
intent to monopolize, and overt acts in furtherance of the conspiracy.” Full Draw Prods.
v. Easton Sports, Inc., 182 F.3d 745, 756 (10th Cir. 1999) (quotation omitted). A claim
that depends on specific intent to monopolize hinges on “‘predatory conduct,’ which is
‘conduct that is in itself an independent violation of the antitrust laws or that has no
legitimate business justification other than to destroy or damage competition.’” Re/Max
Int’l v. Realty One, Inc., 900 F. Supp. 132, 153 (N.D. Ohio 1995) (quoting Great
Escape, Inc. v. Union City Body Co., 791 F.2d 532, 541 (7th Cir. 1986)). Accordingly, in
order to state a claim for attempted monopolization or conspiracy to monopolize, Dawgs
must allege predatory conduct.
As discussed in the previous section, Crocs is immune from suit for seeking and
enforcing its patents. Boulware v. State of Nev., Dep’t of Human Res., 960 F.2d 793,
796 (9th Cir. 1992) (dismissal is proper where “the defendant’s allegedly anticompetitive
9

Dawgs requests that the Court take judicial notice of materials from Crocs’
website and from various SEC filings. Docket No. 251. The materials proffered by
Dawgs relate to its descriptions of the relevant market for monopoly purposes. Id.
Because the Court finds that Crocs’ allegedly anticompetitive conduct is subject to
immunity pursuant to Noerr-Pennington, the Court denies Dawgs’ motion for judicial
notice as moot.
23

conduct is protected by the Noerr-Pennington doctrine.”). Such actions by Crocs are
the only potentially predatory conduct described in the seventh and ninth counterclaims.
See Docket No. 209 at 67-68, ¶ 193; 72, ¶ 216. According ly, Dawgs’ seventh and ninth
counterclaims will be dismissed.10
C. Conspiracy to Restrain Trade (Eighth Claim for Relief)
Dawgs alleges that Crocs and Seamans violated § 1 of the Sherman Act by
conspiring to restrain trade. Docket No. 209 at 68-72, ¶¶ 195-212. Section 1 of the
Sherman Act states: “Every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the several States or with foreign
nations, is declared to be illegal.” 15 U.S.C. § 1. To plead a claim for conspiracy to
restrain trade, Dawgs must show: “(1) an agreement to enter a conspiracy (2) designed
to achieve an unlawful objective.” U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d
986, 1001 (11th Cir. 1993). Crocs and Seamans argue that Dawgs’ claim should be
dismissed because the underlying conduct, the assertion of infringement of the ’858
and ’789 patents, is not anticompetitive.11 Docket No. 227 at 18-19; 231 at 8-9.

10

Crocs and Seamans’ motions to dismiss informed Crocs of the defects in the
first amended answer and counterclaims. Docket Nos. 227, 231. Despite being on
notice of these issues, Dawgs’ second amended answer and counterclaims failed to
add the requisite detail to state a claim for antitrust liability. Due to Dawgs’ failure to
adequately amend the counterclaims and the clear deficiencies in the pleadings, the
Court dismisses these claims with prejudice. See Radiancy, Inc. v. Viatek Consumer
Prod. Grp., Inc., 138 F. Supp. 3d 303, 325 (S.D.N.Y. 2014).
11

Dawgs does not respond to this argument. Instead, Dawgs argues that the
intracorporate conspiracy doctrine, which applies to corporate employees accused of
conspiring, does not apply. Docket No. 250 at 7-9. The intracorporate conspiracy
doctrine was not discussed by either Crocs or Seamans in their motions to dismiss and
the Court does not consider its applicability here.
24

The eighth counterclaim states that “Crocs and Scott Seamans have and are
continuing to conspire to assert the ’858 patent and ’789 patent ag ainst Double
Diamond, USA Dawgs, and CVS, despite their knowledge that both patents are invalid
and/or unenforceable.” Docket No. 209 at 68, ¶ 198. Thus, the objective of the
conspiracy between Seamans and Crocs is alleged to be the defense and enforcement
of their patents. As discussed above, such conduct is subject to immunity from antitrust
liability.12 See PRE, 508 U.S. at 59 (applying Noerr-Pennington immunity to §§ 1 and 2
of the Sherman Act).
Accordingly, Dawgs’ eighth claim for relief will be dismissed.
D. Unlawful Exclusionary Arrangements, Agreements, and Conduct (Tenth
Claim for Relief)
Dawgs’ tenth claim for relief alleges violations by Crocs and a subset of the John
and Jane Doe defendants of §§ 1 and 2 of the Sherman Act and § 3 of the Clayton Act
for entering into unlawful exclusionary arrangements and agreements with buyers and
distributors. Docket No. 209 at 76-80, ¶¶ 232-250. Exclusive dealing arrangements are
not unlawful in the absence of anticompetitive effects. Tampa Elec. Co. v. Nashville

12

Patent misuse, as opposed to the enforcement of patent rights, is not
necessarily exempt from Sherman Act protections. See Zenith Radio Corp. v. Hazeltine
Research, Inc., 395 U.S. 100, 136 (1969) (“[T]here are established limits which the
patentee must not exceed in employing the leverage of his patent to control or limit the
operations of the licensee.”). While the first amended counterclaims make occasional
reference to “patent misuse,” see, e.g., Docket No. 209 at 56, ¶ 157, there are no
factual allegations in the first amended complaint suggesting that Crocs has
impermissibly expanded the scope of its patents. Instead, the allegations in the
complaint go to invalidity and enforceability, not to the scope of Crocs’ patent
assertions. See Monsanto Co. v. Scruggs, 459 F.3d 1328, 1339 (Fed. Cir. 2006)
(noting that patent misuse cannot be shown where allegedly anticompetitive restrictions
are “within the patent grant”).
25

Coal Co., 365 U.S. 320, 327 (1961). In order to state a claim for unlawful use of
exclusionary agreements under these provisions, Dawgs must show that Crocs’
exclusive dealing arrangements foreclose competition in a substantial share of the line
of commerce affected. Tampa Elec., 365 U.S. at 327. In addition, Dawgs must show
anticompetitive effects resulting from “a substantial foreclosure of their ability to
compete in the relevant market.” See Compliance Mktg., Inc. v. Drugtest, Inc., No.
09-cv-01241-JLK, 2010 WL 1416823, at *8 (D. Colo. Apr. 7, 2010) (citing Tampa, 365
U.S. at 328). Dawgs states that the relevant market is “molded clog-type footwear.”
Docket No. 209 at 76, ¶ 235.
The tenth counterclaim is bereft of any facts suggesting that Crocs’ actions
substantially foreclosed a substantial share of the relevant market or Dawgs’ ability to
compete. Dawgs states that Crocs and the relevant subset of John and Jane Does
have engaged in the following actions:
(a) Crocs and John and Jane Does 1 through 100, Subset E successfully
threatened, intimidated, and coerced actual and potential purchasers of
Counterclaim Plaintiffs’ footwear products not to deal with Counterclaim
Plaintiffs;
(b) Crocs and John and Jane Does 1 through 100, Subset E induced,
organized, and implemented a refusal to deal among buyers/distributors,
including Academy Sports and others, not to distribute or purchase
Counterclaim Plaintiffs’ footwear products;
(c) Crocs and John and Jane Does 1 through 100, Subset E conditioned
the payment or allowance of discounts and rebates provided on the
purchase of Crocs’ footwear products, on an agreement not to deal with or
purchase competitive products from Counterclaim Plaintiffs;
(d) Crocs and John and Jane Does 1 through 100, Subset E entered into
actual or de facto/implied exclusive dealing arrangements with various
customers; and
26

(e) Crocs and John and Jane Does 1 through 100, Subset E have entered
into agreements that prevent Crocs’ customers from selling products
“similar” to Crocs.
Docket No. 209 at 77-78, ¶ 240. 13
The tenth counterclaim fails to allege a particular exclusive dealing agreement
between Crocs and a buyer or distributor. While the tenth counterclaim states that
“Academy Sports, and others, [] informed Counterclaim Plaintiffs that the reason they
would not carry Counterclaim Plaintiffs’ products is because of agreements with Crocs,”
Docket No. 209 at 78-79, ¶ 243, nowhere in the counterclaim does Dawgs specify the
nature of any such arrangement, e.g., whether the agreements bar purchases from
Crocs’ competitors, provide discounts for carrying a specified volume, or otherwise
incentivize exclusivity. Moreover, Dawgs fails to allege “any facts demonstrating the
total volume of commerce involved” in the exclusive dealing agreements. Compliance,
2010 WL 1416823, at *9. There are, accordingly, no allegations in the tenth
counterclaim plausibly suggesting that the exclusive dealing arrangements have a
substantial effect on the total volume of commerce involved in the market for molded
clog-type footwear. Tampa Elec., 365 U.S. at 329 (stating that substantiality requires a
court “to weigh the probable effect of the contract on the relevant area of effective
competition, taking into account the relative strength of the parties, the proportionate
13

The thirteenth counterclaim of the second amended answer and counterclaims
adds additional detail regarding buyers and distributors who may have chosen not to
distribute Dawgs’ products as a result of exclusivity deals. See Docket No. 487 at 101103, ¶ 325. However, while the thirteenth counterclaim states that Crocs’ practices
“have foreclosed competition in a substantial share of the relevant market,” id. at 104,
¶ 332, there are no facts related to the scope of such arrangements or the total volume
of commerce involved. Dawgs’ thirteenth counterclaim is accordingly deficient in an
identical manner.
27

volume of commerce involved in relation to the total volume of commerce in the
relevant market area, and the probable immediate and future effects which pre-emption
of that share of the market might have on effective competition therein.”).
In the absence of factual allegations related to the nature of Crocs’ alleged
exclusive arrangements14 or allegations related to how those agreements significantly
impair competition, Dawgs’ tenth claim for relief is deficient and will be dismissed.
E. Intentional Interference With Business Advantage (Eleventh Claim for
Relief)
Dawgs’ eleventh claim for relief, presumably a state law claim, is brought against
Crocs and a subset of John and Jane Does alleging intentional interference with
business advantage. Docket No, 209 at 80-82, ¶¶ 251-254. Under Colorado law ,
“[o]ne who intentionally and improperly interferes with another’s prospective contractual
relation . . . is subject to liability to the other for the pecuniary harm resulting from loss
of the benefits of the relation, whether the interference consists of (a) inducing or
otherwise causing a third person not to enter into or continue the prospectiv e relation or
(b) preventing the other from acquiring or continuing the prospective relation.” Harris
Grp., Inc. v. Robinson, 209 P.3d 1188, 1195-96 (Colo. App. 2009) (quoting
Restatement (Second) of Torts § 766B (1979)). In order to qualify as a protected
relationship, “there [must be] a reasonable likelihood or probability that a contract would
have resulted; there must be something beyond a mere hope.” Klein v. Grynberg, 44
14

The second amended counterclaims attach a declaration from William H.
Billings, Jr. stating that Crocs required him to sign an exclusivity contract and that, as a
result, his company, lionfootweardirect.com, stopped selling competing molded-foam
clogs. Docket No. 487-3 at 4-5, ¶ 11. These additional facts still fail to show how these
exclusive dealing arrangements foreclosed competition in the relevant market.
28

F.3d 1497, 1506 (10th Cir. 1995).
The first amended counterclaims repeat the list of interfering conduct described
in Dawgs’ tenth counterclaim:
(a) Crocs and John and Jane Does 1 through 100, Subset E successfully
threatened, intimidated, and coerced actual and potential purchasers of
Counterclaim Plaintiffs' footwear products not to deal with Counterclaim
Plaintiffs;
(b) Crocs and John and Jane Does 1 through 100, Subset E induced,
organized, and implemented a refusal to deal among buyers/distributors,
including Academy Sports and others, not to distribute or purchase
Counterclaim Plaintiffs’ footwear products;
(c) Crocs and John and Jane Does 1 through 100, Subset E conditioned
the payment or allowance of discounts and rebates provided on the
purchase of Crocs’ footwear products, on an agreement not to deal with or
purchase competitive products from Counterclaim Plaintiffs;
(d) Crocs and John and Jane Does 1 through 100, Subset E entered into
actual or de facto/implied exclusive dealing arrangements with various
customers; and
(e) Crocs and John and Jane Does 1 through 100, Subset E have entered
into agreements that prevent Crocs’ customers from selling products
“similar” to Crocs.
Docket No. 209 at 80-81, ¶ 252. Dawgs does not plead facts plausibly suggesting a
reasonable likelihood of contracting with a particular third party.15 See Savant Homes,
Inc. v. Collins, No. 13-cv-02049-WJM-MEH, 2015 WL 899302, at *10 (D. Colo. Feb. 27,
2015) (granting summary judgment where there was no evidence related to individuals
in the process of contracting with plaintiff). In the absence of any allegations regarding
such a relationship, Dawgs’ claim is deficient.
15

While the second amended counterclaims list additional buyers and
distributors, there are no additional facts alleged related to the likelihood of a
contractual relationship arising. See Docket No. 487 at 105-106, ¶ 337.
29

The Court finds that Dawgs has failed to state a claim for intentional interference
with business advantage. Accordingly, Dawgs’ eleventh claim for relief will be
dismissed.
F. Violation of Section 43(a) of the Lanham Act (Twelfth Claim for Relief)
Dawgs’ twelfth claim for relief is brought pursuant to § 43(a) of the Lanham Act,
15 U.S.C. § 1125(a), against Crocs. Docket No. 209 at 82-83, ¶¶ 255-262. Section
43(a)(1)(B) provides for liability against any person:
who, on or in connection with any goods or services, or any container for
goods, uses in commerce any word, term, name, symbol, or device, or
any combination thereof, or any false designation of origin, false or
misleading description of fact, or false or misleading representation of
fact, which . . . in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her or
another person’s goods, services, or commercial activities.
15 U.S.C. § 1125(a)(1)(B). The twelfth counterclaim states that “Crocs has been
misleading the public and consumers by claiming that their [sic] footwear is made of an
exclusive and proprietary closed-cell resin that they call ‘Croslite.’” Docket No. 209 at
82, ¶ 256. “Croslite” is in fact ethyl vinyl acetate, which is used by footwear companies
around the world, including Dawgs. Id. Dawgs also claims that Crocs’ promotional
materials refer to “our patented Croslite TM material” and “our proprietary CrosliteTM
material,” and that Croslite is a “revolutionary technology.” Id. at 19, ¶ 22. Dawgs
claims that, on information and belief, “Crocs does not own any exclusive proprietary or
patent rights to the material from which its footwear is made.” Id. Dawgs alleges that
the descriptions of Croslite have misled consumers into believing that Crocs uses a
different material from competitors and that Crocs owns the rights to such material. Id.,

30

¶ 257. As a result, Dawgs alleges that consumers are deceived into concluding that the
products sold by Dawgs are “made of inferior material compared to Crocs’ molded
footwear.” Id. at 83, ¶ 260. Dawgs claims that, in the absence of an injunction and a
court-ordered retraction, Crocs’ promotional activities will cause it to “suffer a loss of
consumer confidence, sales, profits, and goodwill.” Id., ¶ 262.
Crocs argues that Dawgs has failed to allege standing under the Lanham Act or
a cognizable injury that was proximately caused by the alleged Lanham Act violation.
Docket No. 227 at 19-20. The basis for Crocs’ argument is Lexmark Int’l, Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377 (2014). In Lexmark, the Supreme Court laid
out a two-step test to determine when a party can sue under § 43(a) of the Lanham Act.
Id. at 1388-90. First, the party raising a Lanham Act claim must “fall within the zone of
interests protected by the [Lanham Act].” Id. at 1388. Second, the injury alleged must
be “proximately caused by violations of the statute.” Id. at 1390.
The Supreme Court held that the zone of interests for a false advertising claim
under the Lanham Act encompasses plaintiffs who suffer “an injury to a commercial
interest in reputation or sales.” Id. In order to demonstrate proximate cause under the
Lanham Act, a plaintiff “must show economic or reputational injury flowing directly from
the deception wrought by the defendant’s advertising; and that that occurs when
deception of consumers causes them to withhold trade from the plaintiff.” Id. at 1391.
Lexmark does not foreclose Dawgs’ claim at the pleading stage.16 Dawgs fits
16

Although Dawgs “has alleged an adequate basis to proceed under § 1125(a), it
cannot obtain relief without evidence of injury” proximately caused by Crocs’ alleged
misrepresentations. Lexmark, 134 S. Ct. at 1395. Dawgs “is entitled to a chance to
prove its case.” Id.
31

within the zone of interests of the Lanham Act because it is a direct competitor with
Crocs who alleges an injury to reputation or sales. Docket No. 209 at 83, ¶ 260. In
terms of causation, Dawgs alleges that Crocs’ purportedly false descriptions of Croslite
have caused or will cause “a loss of consumer confidence, sales, profits, and goodwill.”
Id., ¶ 262. These injuries “flow[] directly from the deception” caused by Crocs’
advertising. Lexmark, 134 S. Ct. at 1391.
Crocs cites Critical Nurse Staffing, Inc. v. Four Corners Health Care Corp., 2014
WL 2739279 (D. Utah June 17, 2014), to show that Dawgs’ pleadings are inadequate,
but the plaintiff in Critical Nurse failed to plead any facts to suggest “whether the [false
or misleading] statements were made in connection with commercial advertising, in
commerce, and caused confusion, or were likely to cause confusion, amongst Plaintiff’s
clients.” Id. at *5. Dawgs has pled facts to support its argument that Crocs has
advertised its products using the term “Croslite,” that its descriptions of Croslite were
false, and that those descriptions have misled consumers about Dawgs’ products.
Accordingly, Dawgs’ twelfth claim for relief sufficiently states a claim at this stage
in the proceedings.
IV. CONCLUSION
For the foregoing reasons, it is
ORDERED that Crocs, Inc.’s Motion to Dismiss Counterclaims V-XII [Docket No.
227] is granted in part and denied in part and Scott Seam ans’ Motion to Dismiss
Counterclaims VI-IX [Docket No. 231] is granted. It is further
ORDERED that Dawgs’ seventh, ninth, tenth, eleventh, twelfth, thirteenth, and

32

fourteenth claims for relief are dismissed with prejudice.17 Docket No. 487. It is further
ORDERED that defendants Scott Seamans and John and Jane Does 1-100 are
dismissed from this lawsuit.

DATED March 31, 2017.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

17

These claims are the claims for relief in Dawgs’ second amended answer and
counterclaims equivalent to those discussed in this order.
33