Crocs Sues Competitor for Using Trade Secrets to Create Knockoffs

Crocs Inc. is accusing a former employee of stealing trade secrets and using them to manufacture competing products at Joybees, his new company.

In a lawsuit filed in a U.S. District Court in the District of Colorado on Thursday, Crocs claimed that Joybees and its CEO Kellen McCarvel, a former Crocs employee, have a history of using Crocs’ trade secrets in its footwear. McCarvel left Crocs with “a tranche of several thousand documents containing Crocs’ highly confidential and proprietary business information” as well as the content of a Crocs email account, Crocs alleged.

“McCarvel stole those 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,” the suit alleged. “Then, McCarvel used the stolen documents to build a rival shoe company, Joybees, to compete against Crocs.”

McCarvel spent more than six years at Crocs, culminating in his role as merchandise manager, Latin America, according to his LinkedIn. He joined Joybees in 2018 as CEO.

According to Crocs, McCarvel planned to use Crocs’ data in advance of his father — John McCarvel, a former Crocs CEO who left the company in 2014 — bidding in a court-ordered bankruptcy auction for the assets of U.S.A. Dawgs, Inc., another Crocs competitor.

Specifically, Crocs said McCarvel used Crocs’ proprietary “specifications, standards and test and audit methods” for measuring shoe perfomance and materials. Crocs also said Joybees hired other former Crocs employees with knowledge of Crocs’ proprietary information.

“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,” the suit alleged.

FN reached out to McCarvel and Joybees for a comment. In a statement to FN, Crocs said its “proprietary technology, know-how, and trade secrets are vitally important to the business and are the product of extensive development effort and research.”

“Crocs will continue to vigorously protect and defend its intellectual property and proprietary information against third-party theft and abuse,” the company said.

This legal spat marks Crocs’ latest efforts to protect itself from copycat companies. Last year, Crocs secured a judgment of infringement against USA Dawgs and Double Diamond Distribution after both companies sold Crocs imitations. In 2021, Crocs filed lawsuits against 21 companies including Walmart, alleging infringement on its trademarks. The company settled the trademark infringement lawsuit against Walmart in September.