Footwear makers Crocs and rival Joybees have filed competing claims against each other in U.S. court in Colorado, as the companies clash over corporate trade secrets, intellectual property and competition in the market for casual shoes. Crocs sued Joybees in federal court last Thursday, expanding on a separate lawsuit that the Colorado-based company filed in 2021. The new complaint, accusing Joybees and its chief executive of unfair competition, came a day after Joybees filed claims in the same court against Crocs. Joybees asserted that Crocs was trying to monopolize the market for “injection-molded clogs,” in violation of U.S. and state antitrust law. Joybees alleged Crocs was abusing its monopoly power through “exclusive and conditional dealings” that had cost the company more than $1.6 million in annual revenue.
Total Retail’s Take: The companies have been in litigation for two years. At issue, among other claims, is that Kellen McCarvel, a former Crocs employee and now CEO of Joybees, unlawfully took proprietary information after his departure. This information was then allegedly used to create footwear products that closely resembled Crocs’ signature clogs. What’s at stake is control of the growing casual footwear market. For example, in its Q1 earnings, Crocs reported revenues of $884.2 million, an increase of 34 percent year-over-year. This comes on the heels of Crocs’ 2022 fiscal year, which saw it post record revenues of $3.6 billion, a 54 percent YoY increase. With the category booming, other competitors are taking aim at Crocs, the clear leader in this unique niche. Expect Crocs to take every step to protect itself, its patents, and its market share from those emerging threats.
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