United States District Court, D. Colorado
A. BRIMMER, UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants' Motion to
Dismiss. Case No. 16-cv-02004, Docket No. 31. The Court has
jurisdiction pursuant to 28 U.S.C. § 1331.
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.
August 5, 2016, Dawgs filed its complaint in Case No.
16-cv-02004-PAB-KMT (“the 2016 lawsuit”). Case
No. 16-cv-02004, Docket No. 1. The 2016 lawsuit named 18
individual defendants (“defendants”), all of whom
were current or former employees of Crocs. Id. at
10-19, ¶¶ 9-14.
is the leading manufacturer of “molded clog-type
footwear products.” Id. at 21-22, ¶ 20.
Dawgs is a competitor of Crocs and sells a variety of
footwear, including molded clogs. Id. at 24, ¶
24. According to the complaint, Crocs had been manufacturing
and selling clog-shaped shoes made from ethyl vinyl acetate
(“EVA”) since 2002. Id. at 21-22, ¶
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 22, ¶ 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 24-25, ¶ 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 25-26, ¶ 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 27, ¶ 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 30, ¶ 34;
see also Id. at 30-36, ¶¶ 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 36, ¶
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 37, ¶¶ 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. at 37-38, ¶ 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 38, ¶¶ 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 a 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 36-37, ¶ 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 38-39, ¶ 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 40, ¶ 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 40-41, ¶¶ 61-62. On August 24,
2012, USA Dawgs filed an application for inter
partes reexamination with the PTO of the '789
patent. Id. at 41, ¶ 63. On April 29, 2013, the
PTO issued a non-final Office Action rejecting the single
claim of the '789 patent. Id. at 41-42, ¶
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
42, ¶ 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 42-43, ¶ 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 43-46,
¶¶ 68-74. According to Dawgs, defendants
“directed, participated in, sanctioned, ratified, or
acquiesced” in the decision to sue Dawgs and to
continue the 2006 lawsuit through the present. Id.
at 10-18, ¶¶ 9-13.
brings seven claims against defendants in Case No.
16-cv-02004: actual monopolization in violation of § 2
of the Sherman Act (first claim for relief); attempted
monopolization in violation of § 2 of the Sherman Act
(second claim for relief); conspiracy to restrain trade in
violation of § 1 of the Sherman Act (third claim for
relief); conspiracy to monopolize in violation of § 2 of
the Sherman Act (fourth 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 (fifth claim for relief);
intentional interference with business advantage (sixth claim
for relief); and violation of § 43(a) of the Lanham Act
(seventh claim for relief). Id. at 61-107,
have moved to dismiss Dawgs' claims for lack of personal
jurisdiction and for failure to state a claim. Case No.
16-cv-02004, Docket No. 31.
STANDARD OF REVIEW
purpose of a motion to dismiss under Rule 12(b)(2) is to
determine whether the Court has personal jurisdiction. The
plaintiff bears the burden of establishing personal
jurisdiction over defendants. Rambo v. Am. S. Ins.
Co., 839 F.2d 1415, 1417 (10th Cir. 1988). Where a
district court considers a motion to dismiss for lack of
personal jurisdiction and there has been no evidentiary
hearing, the “plaintiff need only make a prima facie
showing of personal jurisdiction to defeat the motion.”
AST Sports Sci., Inc. v. CLF Distribution
Ltd., 514 F.3d 1054, 1056-57 (10th Cir. 2008) (citations
omitted). The Court will accept the well-pleaded allegations
of the complaint as true to the extent they are
uncontroverted by affidavits submitted by defendants.
Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th
Cir. 1995) (citations omitted). “If the parties present
conflicting affidavits, all factual disputes must be resolved
in the plaintiff's favor, and the plaintiff's prima
facie showing is sufficient notwithstanding the contrary
presentation by the moving party.” Id.
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
argues that the Court lacks personal jurisdiction over
defendants Raymond Croghan, Ronald Frasch, Prakash Melwani,
Michael Marks, Thomas Smach, Andrew Rees, and Gregg Ribatt,
all of whom reside outside the State of Colorado. Case No.
16-cv-02004, Docket No. 31 at 24 n.15. Dawgs argues that the
Court has personal jurisdiction because the nonresident
defendants purposefully directed their conduct at Colorado.
Case No. 16-cv-02004, Docket No. 38 at 24.
assert personal jurisdiction over a defendant in a federal
question case, the Court must determine: “(1) whether
the applicable statute potentially confers jurisdiction by
authorizing service of process on the defendant and (2)
whether the exercise of jurisdiction comports with due
process.” Peay v. BellSouth Med. Assistance
Plan, 205 F.3d 1206, 1209 (10th Cir. 2000) (quotations
omitted). Because the Patent Act does not authorize
nationwide service of process, the Court considers whether
the exercise of jurisdiction satisfies due process standards.
See TechnoLines, LP v. GST AutoLeather, Inc., 799
F.Supp.2d 871, 874 (N.D. Ill. 2011). “The Colorado long
arm statute, Colo. Rev. Stat. § 13-1-124, has been
construed to extend jurisdiction to the full extent of the
Constitution, so the jurisdictional analysis here reduces to
a single inquiry of whether jurisdiction offends due
process.” Klein Frank, P.C. v. Girards, 932
F.Supp.2d 1203, 1209 (D. Colo. 2013) (citing Pro Axess,
Inc. v. Orlux Distrib., Inc., 428 F.3d 1270, 1276 (10th
Cir. 2005)); Classic Auto Sales, Inc. v. Schocket,
832 P.2d 233, 235 (Colo. 1992); Archangel Diamond Corp.
v. Lukoil, 123 P.3d 1187, 1193 (Colo. 2005)).
jurisdiction comports with due process where a defendant has
minimum contacts with the forum state and where those
contacts are such that jurisdiction does not offend
‘traditional notions of fair play and substantial
justice.'” Interstate Restoration, LLC v.
Wilson Assocs., No. 13-cv-03423-REB-MJW, 2014 WL
1395466, at *2 (D. Colo. Apr. 8, 2014) (quoting Int'l
Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)). Minimum
contacts may be established under the doctrines of general
jurisdiction or specific jurisdiction. Goodyear Dunlop
Tires Operations, S.A. v. Brown, 564 U.S. 915, 918
(2011). Where general jurisdiction is asserted over a
non-resident defendant who has not consented to suit in the
forum, minimum contacts exist if the plaintiff demonstrates
that the defendant's “affiliations with the State
are so ‘continuous and systematic' as to render
them essentially at home in the forum State.”
Id. at 919. Specific jurisdiction, in contrast, is
present only if the lawsuit “aris[es] out of or
relat[es] to the defendant's contacts with the
forum.” Bristol-Myers Squibb Co. v. Superior Court
of California, San Francisco Cty., 137 S.Ct. 1773, 1780
(2017). Dawgs does not assert general jurisdiction; thus, the
Court will analyze the relevant defendants' contacts with
Colorado as they relate to specific jurisdiction.
specific jurisdiction analysis is two-fold. First, the Court
must determine whether defendants have such minimum contacts
with Colorado that defendants “should reasonably
anticipate being haled into court” here. World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
Within this inquiry, the Court must determine whether
defendants “purposefully directed [their] activities at
residents of the forum, ” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 (1985), and whether
plaintiff's claims arise out of or result from
“actions by . . . defendant . . . that create a
substantial connection with the forum State.” Asahi
Metal Indus. Co. v. Superior Court of Cal., 480 U.S.
102, 109 (1987) (internal quotations omitted). Second, if
defendants' actions create sufficient minimum contacts,
the Court must consider whether the exercise of personal
jurisdiction over defendants offends “traditional
notions of fair play and substantial justice.”
Id. at 113. This latter inquiry requires a
determination of whether the Court's exercise of personal
jurisdiction over defendants is “reasonable” in
light of the circumstances of the case. Id.
argues that the out-of-state defendants have minimum contacts
with the state by virtue of their purported participation in
sham patent litigation, intentional interference with
business advantage, and false advertising, which was
“expressly aimed to benefit Crocs - a business that is
headquartered within this very District.” Case No.
16-cv-02004, Docket No. 38 at 25. The fact that Crocs is
headquartered in Colorado and conducts business in the forum
is not relevant to the minimum contacts analysis. Calder
v. Jones, 465 U.S. ...