Cases from Oregon

Oregon, U.S. District Court in Portland
Adidas Files Patent Infringement Suit Against Skechers

On July 11, 2016, Adidas filed suit against Skechers in the U.S. District Court in Portland, Oregon for willful infringement of two patents related to Springblade, a shoe design intended to help propel runners move forward. Adidas accused Sketchers of developing its Mega Flex shoes as "takedowns" that copy the Springblade technology without the cost of creating it. Adidas is seeking an injunction against any infringement and triple damages.

This is Adidas' second lawsuit against Skechers in less than a year. Last September, Adidas filed suit against Skechers for illegally copying the design for its classic white Stan Smith tennis shoes. Adidas was awarded a preliminary injunction in February 2016 and it scheduled for a jury trial in May 2017.

The patents at issue are U.S. Patent Nos. 9,339,079 and 9,345,285, both issued in May 2016.

Updates to follow.

District Court of Oregon
Ninth Circuit Continues Narrow Interpretation of CFAA

Plaintiffs in the Ninth Circuit may want to avoid claims that an employee violated the CFAA after a court rejected a principal’s lawsuit against an online student prank. In Matot v. CH, the District Court of Oregon dismissed the suit, finding that the students’ use of the principal’s name and likeness gave no standing for a suit against the student perpetrators or their parents.

The court cited the Ninth Circuit’s decisions in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009) and United States v. Nosal, 676 F.3d 854, 862 (9th Cir. 2012), which held that claims under the CFAA fail where the court can “construe criminal statutes narrowly so that Congress will not unintentionally turn ordinary citizens into criminals.” Citing numerous press reports, the court held that lying on social media is common and can serve the purpose of law enforcement.

The court did admit that lying on social media can have serious consequences. Perhaps the most famous example of such consequences arose in United States v. Drew, 259 F.R.D. 449 (C.D. Cal. 2009), in which a mother posed as a teenage boy in order to cyber-bully her daughter's classmate, who ultimately committed suicide.

For more on this case, see Creating Parody Social Media Accounts Doesn't Violate Computer Fraud & Abuse Act – Matot v. CH on the blog of Eric Goldman, Professor of Law at Santa Clara University School of Law and director of the school’s High Tech Law Institute.

United States District Court for the District of Oregon
Oregon Food Co. Reser's Claims Former Business Partner Stole Trade Secret Baking Technique

In a complaint filed mid-January 2013 in Oregon Federal District Court, Oregon company Reser’s Fine Foods Inc. (Reser) claimed former corporate partner Bob Evans Farms (BEF) misappropriated Reser trade secret baking techniques. The law suit comes in the wake of the two companies’ split last year, and BEF’s subsequent development and market for sale of a competing line of pre-made meal side dishes. According to the complaint, Reser and BEF had a business partnership since the mid 1990’s, in which Reser sold private label food products for BEF to re-sell. Reser alleges that through this relationship, BEF was able to access confidential information of Reser innovative product lines, processing of products, packaging techniques, market research and analysis. The Reser allegations include counts of trade secret misappropriation, breach of non-disclosure and confidentiality agreements, and conversion under Ohio and Oregon state law. The suit was accompanied by an application by Reser for a protective order, granted January 18, 2013, and Reser’s motion for a preliminary injunction against BEF filed the same day.

Reser is Oregon’s 6th largest company, having prepared refrigerated food since the 1950’s, selling their products locally and nationally to restaurants and supermarkets. In part of their seventeen-year business relationship, Reser and BEF parties executed a Mutual Confidentiality and Non-Disclosure Agreement in January 2008, forbidding BEF from using Reser proprietary information to make and sell imitation or comparable products. The agreement terms applied to both parties and outlined a mutual information sharing arrangement “enabling Reser and BEF to freely engage in discussions and information sharing to benefit their mutual business interests and relationship on the condition that such information and technology be kept confidential and not be used except as provided” (Complaint, 8). The agreement also made specific reference to “recipes and formulas” as potential proprietary information contemplated under the mutual agreement. Accordingly, the crux of Reser allegations stem from a proprietary and innovative “Baked process,” to which BEF gained access through this mutual relationship. Reser contends that the “Baked process” is innovative and uniquely creates refrigerated food items with a crunchy, caramelized, browned top layer over a creamy bottom layer when reheated. When the Reser-BEF business relationship dissipated in August 2012, Reser notified BEF it would no longer accept orders for BEF side-dishes, but instead purchased the “Kettle Creations” company to produce similar food items. After this acquisition, Reser claims that BEF continued to manufacture and sell its own side-dishes, using the same UPC codes that were used for Reser products. For Reser, this act is significant because UPC codes are product and ingredient-sensitive and cannot be changed without notification to the retailer, demonstrating that the new BEF side-dishes were identical to the Reser “Baked” products.

While Reser ‘s complaint takes important measures to outline their company history, financial objectives, and proprietary “Baked process” at issue, the filing may fall short of some elements required for a valid trade secrets misappropriation claim under Ohio State law. Specifically, the complaint lacks specific examples showing that their “Baked process” was actually kept secret, or that reasonable measures were taken to maintain its secrecy. Moreover, Reser contends that it “relied on protections of the signed NDA” when it disclosed its confidential information to BEF, and that the information was secret because the Reser “employee manual expressly prohibits Reser employees from divulging company trade secrets and makes clear that an employee who does will be subject to discipline for doing so” (Complaint, 10). However, the complaint makes no specific reference to how the “Baked process” technology was kept secret by Reser, and instead highlights several instances where this technology was shared and made readily available for BEF executives.

The lawsuit is active and pending in front of Chief Judge Ann L. Aiken United States District Court for the District of Oregon in Portland.

District of Oregon
Music festival producer settles suit against competitor after alleging misappropriation of trade secrets

The plaintiff, a music festival producer, claimed that the defendant, the organizers of a competing festival, misappropriated trade secrets such as customer lists, leases, and contracts with providers. Defendant contacted providers and told them it would be putting on the plaintiff's annual music festival under new management, when in fact the festival had no relation to the plaintiff. The defendant obtained contracts in excess of $60,000.

The case was conditionally settled on April 13, 2011. The matter is stayed pending completion of the settlement agreement.