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Judge restrains publication of newsletter article on Adidas shoe plans

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Judge restrains publication of newsletter article on Adidas shoe plans03/25/96 OREGON--The Supreme Court of Oregon will decide in late March…

Judge restrains publication of newsletter article on Adidas shoe plans

03/25/96

OREGON–The Supreme Court of Oregon will decide in late March whether to let stand a state circuit court’s order enjoining a newsletter’s publication of alleged trade secrets. Adidas America, Inc., the sporting goods producer, filed a trade secret misappropriation suit against Sports Management News, Inc. (SMNI) in early March based on an article in its February 19 newsletter.

Adidas has claimed that SMNI’s newsletter, Sporting Goods Intelligence, improperly disclosed trade secrets when it reported that Adidas plans to change key elements of its running shoes.

The publisher argued that labelling the information “trade secrets” is not in and of itself a basis for automatic justification of a prior restraint, and there has been no showing of a “grave threat” to Adidas resulting from the publication of the information in question.

The newsletter points to the recent 6th Circuit opinion in the Business Week case, arguing that Adidas has not illustrated facts or circumstances which warrant “a practice that, under all but the most exceptional circumstances, violates the Constitution: preventing a news organization from publishing.”

The state circuit court judge originally issued an ex parte order, without notice to the publisher, sealing all proceedings and forbidding dissemination of “alleged trade secrets.” In mid-March, the circuit court judge vacated her first order, but issued a new restraining order from the bench.

The judge forbade, without prior permission from the court, publication of information obtained by Sporting Goods Intelligence from an Adidas booklet entitled “Footwear Technology for the Spring of ’97 and Forward.” The judge ruled that information from the document could not be published even if the newsletter learned of the information “in connection with its traditional newsgathering activities.”

The article in question — which is just two sentences long — reads that “ADIDAS Barefoot Technology plans to introduce a visible chassis for Spring ’97 along with a full chassis running shoe. Also on the drawing board is a reduction of foam to foam-less midsole and a three-dimensional frame to attach the PODS outriggers.” (Oregon, ex rel Sports Management News, Inc., v. Nachtigal; Media Counsel: Robert E.L. Bonaparte, Portland)