Saskatoon clog-maker claims Crocs profited from false ads
SASKATOON Allegations of false advertising are at the heart of a lawsuit filed last month by the family-owned Saskatoon-based company behind “Dawgs” — a brand of moulded plastic clogs.
The suit seeks unspecified damages from its biggest competitor — a firm that makes similar shoes sold under the name “Crocs.”
Double Diamond Distribution Ltd., which has been selling moulded clogs since 2006, filed the lawsuit on Oct. 27 in Saskatoon Court of Queen’s Bench. It said in the statement of claim that Crocs Canada Inc., its subsidiaries and 18 of its current and former executives and directors hurt its business by falsely advertising Croslite, the material used to make Crocs, as superior when it was not.
“The clear implication is that only shoes made with Croslite will provide a customizable fit and therefore competitors’ products are inferior, which increases Crocs’ sales while harming the sales, consumer confidence and goodwill of its competitors including Double Diamond,” the company said in the 45-page claim.
Statements of claim contain allegations that have not been proven in court. As of Tuesday morning, none of the companies or people named as defendants had filed a statement of defence.
Double Diamond alleges in its claim that Crocs — which began selling moulded clogs in Canada 13 years ago — has for years been advertising Croslite as “patented,” which suggested that it “contained some unique or special properties, when it did not,” and telling its customers that other similar shoes “are made of harmful materials which cause various infections and … also produce heat to feet.”
“That current false statement about materials that compete with Croslite encapsulates a primary objective of Crocs’ campaign to mislead the Canadian public, which is to steer prospective business away from the plaintiffs’ wares and other competing products and to Crocs,” the claim states.
Crocs has admitted in corporate filings that it has not attempted to seek patent protection for Croslite, the Double Diamond suit alleges, adding that independent tests of Crocs’ ethyl vinyl acetate material revealed it to be “a run-of-the-mill common rubber-like (compound) then and later used by many footwear companies.”
The larger company’s assertion that the material was patented was subsequently repeated on numerous online retailers’ websites, according to the claim.
Crocs and its senior executives did not correct the record because the company was receiving “substantial benefits,” including increased sales, and “in doing so … maintained a stranglehold on the market and maintained its ability to charge a premium price for a product which did not warrant the same,” the claim states.
The suit asks a judge to award “damages sufficient to place appropriate corrective advertisements, reasonably designed to reach all persons in Canada to whom Crocs’ advertisements and communications were directly or indirectly disseminated.”