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Nike, Inc. v. Enter Play Sports, Inc.

United States District Court, D. Oregon

March 24, 2015

NIKE, INC., Plaintiff,
v.
ENTER PLAY SPORTS, INC., Defendant,

Jon P. Stride and Eric C. Beach, TONKON TORP LLP, 1600 Pioneer Tower, 888 S.W. Fifth Avenue, Portland, OR 97204-2099; Christopher J. Renk, Michael J. Harris, Aaron P. Bowling, BANNER & WITCOFF, LTD., 10 South Wacker Drive, Suite 3000, Chicago, IL 60606. Of Attorneys for Plaintiff.

Judson M. Carusone, BEHRENDS, CARUSONE & COVINGTON ATTORNEYS AT LAW, P.C., P.O. Box 10552, Eugene, OR 97440. Of Attorneys for Defendant.

OPINION AND ORDER

MICHAEL H. SIMON, District Judge.

In the pending discovery dispute in this action for breach of contract and misappropriation of trade secrets, Plaintiff moves for entry of a protective order (Dkt. 29) to maintain the confidentiality of the parties' respective trade secrets and other confidential information. Defendant does not oppose the need for a protective order, but seeks several additional provisions that Plaintiff opposes. Defendant also cross-moves for "discovery protections" (Dkt 33), seeking an Order that Plaintiff must first provide a more specific list describing the trade secrets at issue with reasonable particularity before Defendant should be required to provide discovery. Defendant also seeks an Order requiring a specific employee of Plaintiff's to be deposed before Defendant should be required to provide discovery. Finally, Defendant seeks an Order limiting what it needs to disclose to Plaintiff in discovery. For the reasons stated below, Plaintiff's Motion for Entry of the Court's Form Two-Tier Protective Order (Dkt. 29) is GRANTED and Defendant's Cross Motion for Discovery Protections (Dkt. 33) is DENIED.

BACKGROUND

Plaintiff NIKE, Inc. ("NIKE") is an Oregon corporation with its principal place of business in Beaverton, Oregon. NIKE designs, markets, and distributes athletic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities. Defendant Enter Play Sports, Inc. ("EPS") is a New York corporation with its principal place of business in Warrensburg, New York. EPS is owned by Brad and Terri Jamison. Mr. Jamison states that he had acquired a lace braiding machine initially for manufacturing athletic equipment for a new sport and later became a primary inventor practicing the art of lace braiding.

In its Complaint, NIKE asserts two claims against EPS. Nike's first claim is for breach of contract, alleging that EPS has breached a Non-Disclosure Agreement ("NDA") between NIKE and EPS. NIKE's second claim alleges a violation of the Oregon Trade Secrets Act, Or. Rev. Stat. § 646.461, et seq. EPS has filed an Answer, denying NIKE's claims and asserting two counterclaims. EPS's first counterclaim seeks a declaration that its patent applications either do not contain any confidential information subject to the parties' NDA or that any such information is not subject to the protections of the NDA based on the NDA's express exclusions. EPS's second counterclaim seeks attorney fees and other costs under the parties' NDA.

As alleged by NIKE, in 2012 NIKE conceived of proprietary and confidential concepts regarding a three-dimensional braided "upper" for athletic footwear ("3-D Braided Upper Concepts"). As part of vetting its 3-D Braided Upper Concepts, NIKE looked to retain a company with braiding capabilities to build samples for NIKE. NIKE discovered EPS through an Internet search. EPS has a website, where EPS highlights a braided play ball it manufactures at a braiding facility in New York. In late 2012, NIKE contacted EPS to inquire whether EPS could build samples of the 3-D Braided Upper Concepts for NIKE. At that time, EPS confirmed that it had no prior experience with braided uppers for footwear, and that it had no plans to develop or work on braided uppers for footwear.

EPS and NIKE signed the NDA at issue, dated December 5, 2012. The purpose of the NDA was to enable NIKE to share its proprietary and confidential 3-D Braided Upper Concepts with EPS so that EPS could build samples for NIKE. According to Nike, its 3-D Braided Upper Concepts and related documentation constitute "Confidential Information" under the NDA. After EPS signed the NDA, NIKE disclosed its proprietary and confidential 3-D Braided Upper Concepts to EPS. NIKE also created documents and sketches related to the concepts, which it also disclosed to EPS. In early 2013, EPS built samples of NIKE's 3-D Braided Upper Concepts using NIKE's Confidential Information. NIKE paid EPS for the samples.

On May 21, 2013, and June 3, 2013, unbeknownst to NIKE at the time, EPS filed provisional patent applications with the U.S. Patent and Trademark Office (the "Patent Office") directed to NIKE's Confidential Information, including at least three-dimensional braided uppers and methods of fabricating three-dimensional braided uppers. EPS later filed a non-provisional application claiming priority to the provisional applications. (These applications are collectively referred to as the "Applications.") In its Applications, EPS summarizes its alleged invention and allegedly describes the Confidential Information NIKE disclosed to EPS pursuant to the NDA. EPS's Applications also include figures that are allegedly based on the sketches and other Confidential Information NIKE provided to EPS pursuant to the NDA and claims directed to Confidential Information NIKE disclosed to EPS pursuant to the NDA. Complaint, ¶¶ 7-13, 18-23 (Dkt. 1).

NIKE filed its Complaint under seal, and its Complaint includes numerous specifics, including drawings and illustrations. As stated in EPS's Answer, Affirmative Defenses, and Counterclaim (Dkt. 18), also filed under seal, EPS contends, among other things, that the Confidential Information claimed by NIKE either is not disclosed in EPS's patent Applications or that any information that is disclosed is not subject to the protections of the NDA based on the NDA's express exclusions.

STANDARDS

Rule 26(b)(1) of the Federal Rules of Civil Procedure provides in relevant part:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably ...

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