United States District Court, D. Colorado
A. BRIMMER United States District Judge
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.
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.
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 Dawgs entities as a named 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.
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.
The 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.
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 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
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
market 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.
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 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.
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.”Id. Accordingly, the shoe in
the '789 patent is “not new and inventive nor
invented and designed by Seamans or by 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. at 25-30, ¶¶ 35-49.
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 was 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.
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.
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, ¶¶ 61-62. 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
PTO 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.
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,
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
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.
has moved to dismiss counterclaims five through
twelve. Docket No. 227. Scott Seamans has moved to
dismiss counterclaims six through nine (the subset of
counterclaims brought against him). Docket No. 231.
STANDARD OF REVIEW
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 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)).
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).
“[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.
“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 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
Inequitable Conduct (Fifth Claim for Relief)
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.
argues that the '858 and '759 patents are
unenforceable 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, 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 from
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 may 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 fifth 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 42-43 ¶¶ 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
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 work-shoe” 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.
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 claimed priority to the '126 application, the
'427 application is infected by the Seamans declaration.
Id. at 47, ¶¶ 122-23.
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 ...