Crocs, the maker of those eye-catching rubber shoes, is struggling to keep a footing in the industry as rivals threaten to run away with its design.

Following years of legal disputes, the U.S. Patent and Trademark Office recently issued a final rejection of Crocs' key design patent, with the agency arguing in favor of retail rival USA Dawgs.

Footwear News first reported on the ruling last week.

Crocs first accused rivals of infringing on its trademark molded-clog design in 2006. But Dawgs is fighting back, accusing Crocs' employees and directors of violating antitrust laws, and alleging that Crocs infringed on its own sandal design.



The patent office has told Crocs that its shoe design is not original. But Crocs told Footwear News that the retailer plans to appeal the agency's decision and will "continue to aggressively enforce its intellectual property portfolio against those who unfairly trade off of Crocs' goodwill and reputation."

A New York-based fashion lawyer, Elizabeth Kurpis, told Footwear News the agency decided Crocs' patent was invalid because it found a similar design published more than one year before Crocs' application.

Crocs' patent has already been rejected twice before, Kurpis told the publication. But a third rejection is typically "final and nonappealable through the USPTO," she said.

Crocs told Footwear News it's confident that the appeals process will result in a favorable outcome, allowing sales to continue.

A representative from Crocs didn't immediately respond to CNBC's request for additional comment.

Earlier this year, Crocs announced plans to bring in a new CEO and to shutter 160 of its brick-and-mortar locations — all part of a turnaround plan to revive sluggish sales.

Shares of Crocs have climbed 37 percent this year, thanks to renewed excitement around a collaboration with actress Drew Barrymore. Barrymore's line of Crocs is set to debut next spring.