KITTERY, Maine — A federal judge dismissed a lawsuit filed against the Kittery Trading Post by Spyderco and ordered the Colorado knifemaker to pay the Trading Post's legal costs.

Spyderco filed the seven-count federal lawsuit against KTP in December, alleging the Route 1 retailer sold counterfeit Spyderco knives, of inferior quality, to “generate an obscene” profit. The suit was filed in the U.S. District Court of Colorado and sought between $600,000 and $2 million for each of three alleged copyright infringements for sales of alleged knockoff knives.

In a July 7 ruling, U.S. District Court Judge Christine Arguello granted KTP's motion to dismiss the lawsuit on the grounds the Colorado federal court was the "improper venue" for the legal dispute. The judge's ruling agreed with the KTP because KTP did not design any products for Colorado, did not advertise in Colorado, or market "the allegedly infringing products through a sales agent in Colorado."

The knives were all sold in Maine, the judge's order notes.

Spyderco's federal lawsuit against the KTP was dismissed without prejudice, meaning it can be re-filed.

The judge's ruling does not address the underlying accusation that KTP sold counterfeit knockoffs of Spyderco Military and Para-Military brand folding knives from a Chinese distributor that sold them for $10 each. The Spyderco Military knife has a suggested manufacturer’s retail price of $259.95 to $279.95 and the Para-Military retail price is suggested at $259.95, according to the lawsuit.

The KTP has two weeks to file notice of its legal costs, which the judge ordered Spyderco must pay.

Representing the Kittery Trading Post, Jim Merrill, New Hampshire director of the Bernstein Shur Group, released the following statement:

"We are pleased about yesterday’s ruling, dismissing this case against Kittery Trading Post. As we have maintained from the start, the allegations made against us are not only false, but outrageous. We are proud of our heritage as a third generation family run outdoor business that has been in continuous operation at the same Maine location for 79 years. During that time, we have provided quality products at reasonable prices for our thousands of loyal customers, working with over 2,000 vendors who have trusted us with their business over the past eight decades. We have worked hard to earn a reputation for integrity and honesty, and we always will.”