Crocs turns up pressure on Joybees CEO with new lawsuit
Footwear giant seeks redress for alleged theft of trade secrets in the development of Joybees clogs | Ex-Crocs manager already subject of prior legal action for ‘stealing’ documents before setting up rival company.
Crocs has filed a complaint against Joybees and its CEO Kellen McCarvel, alleging misappropriation and unauthorised use of Crocs' trade secrets and business information.
The lawsuit, filed in the US District Court for the District of Colorado, seeks redress for the defendants' supposed actions in developing, manufacturing, and marketing footwear products under the rival brand.
This is not the first time Joybees and McCarvel have been accused of stealing Crocs' trade secrets.
McCarvel, who previously held a mid-level management position at Crocs, allegedly left the company with several thousand confidential documents.
“McCarvel stole documents and emails by downloading them onto a personal USB drive from a folder on his laptop he aptly named ‘Take,’ which he then took when leaving Crocs the next day,” said the lawsuit.
“McCarvel used the stolen documents to build a rival shoe company, Joybees, to compete against Crocs.”
Breach of contract claims
Crocs said that when McCarvel was initially “caught” with the allegedly stolen documents, he denied any access or use of them. However, an internal forensic investigation revealed that his representations were false, Crocs said.
In response to McCarvel's actions, Crocs filed an action against him for breach of contract and theft of trade secrets, along with claims of unfair competition and unauthorised use of the Crocs Word Mark by Joybees in 2021.
The current lawsuit focuses on additional forms of alleged theft and misappropriation unrelated to McCarvel's original actions.
It centres around alleged soliciting, disclosing, receiving, and using Crocs' trade secrets, specifically regarding specifications, standards, and test and audit methods for shoe materials and other components used in Crocs footwear.
McCarvel and Joybees sought to obtain this information to produce knockoff footwear resembling Crocs shoes, said the complaint.
The lawsuit said “the use of such information reflects an ongoing effort by McCarvel and Joybees to piggyback off of the success of the Crocs brand by unfair and illegal means.”
To accomplish this, Joybees allegedly “solicited and hired the help of former and current Crocs employees and agents with different skill sets, knowledge, and documentation relating to the design, development, and manufacturing of Crocs footwear.”
This included “a former Crocs Quality Engineer, former Crocs Director of Manufacturing, and former Crocs Operations Manager, all of whom Joybees hired to take on similar roles and duties for Joybees”, said Crocs.
These individuals disclosed confidential documents containing trade secrets and proprietary information, which were labelled as highly confidential and proprietary to Crocs, claims the company.
The information included “material specifications and quality standards” crucial to the manufacturing process, Crocs said.
The misappropriation of Crocs' trade secrets and unauthorised use of confidential information not only violated the former and current employees' confidentiality agreements but also breached non-disclosure agreements with Crocs' manufacturing partners and agents, according to the lawsuit.
Crocs claimed that Joybees’ actions gave it a significant advantage in manufacturing knockoff footwear.
Crocs aims to stop Joybees' supposed misappropriation of its trade secrets and seeks damages for lost sales and unjust enrichment. The company argued that damages alone are inadequate to address the ongoing harm caused by the defendants' unlawful actions.
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