My Teddy had/has what I would call a rash as well. My vet said it is an allergy (he does occasionally lick his paws also) - at first he thought it was a food allergy but it would go away when the spring rains came. It appears to be related to molds and dust mites instead. I give him salmon oil (not the pills but the real oil), freeze his kibble, regularly clean his blankets etc., and give him oatmeal shampoo baths when it really acts up. I also use dermacton cream if his skin gets too dry. We seem to have it under control.