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`09-03-2002
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`US. Patent & TMOfcITM_Mai| Rep! Dt. #11
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`TRADEMARK
`
`APEX 10.20-044
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`APEX FOOT HEALTH INDUSTRIES, INC.,
`
`Opposer,
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`Serial No. 75-918,603
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`For: NIKE SHOX
`
`V.
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`NIKE, INC.,
`
`Applicant.
`
`X
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`Opposition No. 121,470
`
`G
`Published: October 31, 2000 3;
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`OPPOSER'S MOTION FOR LEAVE TO FILE
`AN AMENDED NOTICE OF OPPOSITION AND
`EMERGENCY MOTION FOR SUSPENSION OF PROCEEDINGS
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`Sir:
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`I.
`
`INTRODUCTION
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`Opposer Apex Foot Health Industries, Inc. ("Apex") respectfully moves the Board for an
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`order pursuant to 37 C.F.R. §2.l07 and Fed. R. Civ. P. 15(a) granting leave to Apex to file a
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`First Amended Notice of Opposition in the form attached hereto as Exhibit A (new allegations
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`appear in hold).
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`The basis for the present motion for leave to amend is that counsel for Apex has just
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`learned of evidence indicating that applicant Nike, Inc. ("Nike”) filed its subject application to
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`register NIKE SHOX, and adopted and began using the mark NIKE SHOX, in violation of the
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`is
`this correspondence
`certify that
`hereby
`I
`being
`deposited with the United States Postal
`Service with sufficient
`postage
`as
`First-Class
`mail
`in an envelope a--reesed
`ommissioner
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`for Trademar
`:,
`22202-3513
`on August 30
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`
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` Roy H. Wepner~’ 386392_lI)O(R
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`3‘
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`8|
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`rights of Roy Dixon, an individual believed to reside at 230 Las Palmas Street, Royal Palm
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`Beach, Florida 33411 ("Dixon"). Apex has just received information indicating that, in 1999,
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`Mr. Dixon disclosed to Nike in confidence a proposed and suggested trademark, which
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`eventually became the subject mark NIKE SHOX, along with confidential technology, all of
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`which was misappropriated from Mr. Dixon by Nike. Apex also has just learned that, on
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`March 7, 2001, Mr. Dixon wrote a letter to Nike accusing Nike of misappropriating Mr. Dixon's
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`trade secrets, including a proposed trademark. Nike took Mr. Dixon's allegations sufficiently
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`seriously as to file a declaratory judgment action in the United States District Court for the
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`District of Oregon. Mr. Dixon has filed a counterclaim accusing Nike of misappropriation of
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`trade secrets,
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`taking of business opportunity, breach of confidential relationship, breach of
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`implied contract, negligent misrepresentation, fraud and deceit and constructive fraud, based in
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`part on Nike's misappropriation of Mr. Dixon's proposed trademark, a variation of which Nike
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`seeks to register here.
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`Thus, Apex seeks to amend its notice of opposition to allege that Nike cannot lawfully
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`use the mark NTKE SHOX, as such use violates the rights of Mr. Dixon. Apex similarly seeks to
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`allege that Nike did not have a bona fide intent to use the mark when it filed the subject
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`application and, on the contrary, acted in bad faith.
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`As set forth in greater detail herein, Apex did not learn of these facts until August 29,
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`2002, and filed the present motion as soon as feasible thereafter. Apex would have learned of
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`these facts much sooner — more than a year ago —had Nike properly complied with Apex's
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`document requests. Indeed, the aforesaid March 7, 2001 letter was received by Nike more than a
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`month before Nike responded to Apex's document requests, one or more of which clearly
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`encompassed the March 7, 2001 letter. Nonetheless, Nike did not produce the March 7, 2001
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`3s<s392w1 DOC
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`?
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`It
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`letter or any documents relating to Dixon or his allegations at any time during this proceeding.
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`Thus, if Nike should complain that the present motion is being made too late in this proceeding,
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`Nike has only itself to blame.
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`Apex also respectfully moves the Board for an order under 37 C.F.R. §2.ll7(a) to
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`suspend proceedings in this opposition pending the outcome of Mr. Dixon's counterclaim against
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`Nike.
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`It is clear from Mr. Dixon's counterclaim in that action that if Dixon prevails in its
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`allegation that Nike's mark NIKE SHOX was misappropriated from Mr. Dixon,
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`it would
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`establish conclusively that Nike does not have the right to lawfully use the mark NIKE SHOX,
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`and that Nike did not file its application in good faith, in which event Apex would clearly be
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`entitled to judgment on its proposed First Amended Notice of Opposition. Apex requests the
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`suspension on an emergency basis because pursuant to the Board's order mailed on July 13,
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`2002, Apex's testimony period is scheduled to begin on September 30, 2002, which is just a few
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`weeks away. For the parties to proceed through the testimony phase of this proceeding at this
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`time, when it is possible that a civil action will result in a judgment establishing that Nike does
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`not have the right to lawfully use NIKE SHOX and adopted the mark in bad faith, would be
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`wastefial in the extreme.
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`II.
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`STATEMENT OF FACTS
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`A.
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`Nike's Application And The Present Opposition
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`Nike filed its present Application Serial No. 75/918,603 on February 15, 2000. Nike
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`sought registration under § l(b) of the Trademark Act, asserting that it had a bona fide intention
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`to use the mark NIKE SHOX on footwear. The mark was published for opposition on
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`October 31, 2000.
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`On or about November 28, 2000, Apex filed its original notice of opposition. The
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`original notice alleges in a straightforward fashion that Apex had previously used and registered
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`386392 l.DO(T
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`the marks ANTI—SHOX and LYNCO-SHOX on a variety of goods, and that Nike's proposed
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`registration and use of NIKE SHOX was likely to cause confusion under § 2(d) of the Trademark
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`Act.
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`The parties subsequently proceeded to pursue discovery. On February 12, 2001, Apex
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`served Nike, inter alia, with its first set of requests for production of documents and things. On
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`April 18, 2001, Nike served Apex with, inter alia, responses to Apex's first set of document
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`requests. A true copy of Nike's responses to those document requests, in which the requests
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`themselves are reproduced, is already of record in this matter as Exhibit B to the Declaration of
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`Roy H. Wepner dated and filed in this matter on July 10, 2001, in connection with a previous
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`motion to compel discovery filed by Apex. (Docket Entry No. 6.)
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`Among Apex's requests was Document Request No. 14, which asked Nike to produce all
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`documents concerning the development and/or the introduction of the Nike product known as
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`NIKE SHOX or SHOX. Nike responded by initially objecting to Request No. 14 on the ground
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`that it was overly broad, unduly vague, not limited to the issues involved in this proceeding, and
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`that the requested documents that were the subject of confidential commercial information that
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`Apex was not entitled to absent the entry of a protective order.‘
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`In an effort to minimize issues before making its motion to compel, counsel for Apex
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`spoke with counsel for Nike, at which time Apex indicated that it would be willing to narrow the
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`scope of Request No. 14 "to documents relating to only the selection and meaning of the name
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`NIKE SHOX." (See Opposer‘s Mot. to Compel Disc., filed July 10, 2001, at 7.) Nike's counsel
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`represented that Nike would produce documents responsive to this narrowed request.
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`(See id.)
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`When Nike failed to actually produce such documents after a considerable interval, Apex filed
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`its motion to compel discovery.
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`386392 l.D0(‘
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`3 3 I
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`In responding to Apex's motion to compel, Nike asserted with regard to Document
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`Request No. 14 that the supplemental answers it was serving therewith provided the response
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`that Apex was seeking. Thus, asserted Nike, "this issue accordingly is moot."
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`(Applicant's
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`Mem. in Opp'n to Oppose Mot. to Compel Discovery, filed July 26, 2001, Docket Entry No. 9,
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`at 6.)
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`The actual supplemental response was attached to Nike's memorandum in opposition as
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`Appendix C.
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`In Nike's supplemental answer to Request No. 14, Nike simply referred Apex to
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`the documents identified earlier in response to Request No. 3, which refer to the selection of the
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`mark.
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`In Nike's supplemental answer to Request No. 3, Nike simply identified a number of
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`privileged documents dated between February 3, 2000 and January 4, 2001. None of these
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`documents relate in any way to Roy Dixon.
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`On November 2, 2001, the Board issued an order denying Apex's motion to compel
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`without prejudice.‘ The Board noted that the motion appeared to be moot in light of Nike's
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`representations. The Board stated that Nike's supplemental responses, "appear to comprise all of
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`the information sought by opposer other than that
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`to which applicant objects based on
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`confidentiality." (1 1/2/01 Order, Docket Entry No. 6, at 1.)
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`In all events, throughout the entire discovery period in this proceeding, Nike produced no
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`documents relating to Mr. Dixon or any claim made by Mr. Dixon against Nike.
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`B.
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`Mr. Dixon's Claim Against Nike
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`As noted above, on August 29, 2002, the undersigned counsel for Apex obtained a copy
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`of the answer with affirrnative defenses and counterclaim filed by Roy Dixon in the action
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`entitled Nike, Inc. v. Dixon from the U.S. District Court for the District of Oregon, a copy of
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`‘ The Board subsequently entered a protective order on November 2, 2001.
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`3863 92m] DOC
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`which is annexed hereto as Exhibit B. Mr. Dixon's counterclaim against Nike begins on page 9
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`of that pleading.
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`Mr. Dixon asserts that he made confidential disclosures of technology and other
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`information to Nike in or before 1999. Mr. Dixon alleges that in connection with his trade secret
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`technology for athletic footwear, he named his project the SHOCKEE 2000.
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`(Countercl. 1] 16.)
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`He further alleges that between April and July of 1999 —- at least half a year before Nike filed its
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`present intent to use application — Dixon made a submission to Nike that included his brochure
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`entitled SHOCKEE 2000.
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`(Countercl. 1120; see also id. 1[ 15 at 13, reproducing Mr. Dixon's
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`brochure.)
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`Mr. Dixon goes on to allege that Nike misappropriated trade secrets and confidential
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`information from Dixon. He specifically asserts that "NIKE took the SHOX name from
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`DIXON's suggested product name SHOCKEE 2000."
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`(Countercl. 1] 31.) Dixon goes on to
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`allege that his 1999 disclosures to Nike constituted a suggested trademark, a suggested trade
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`dress, technical and nontechnical data, as well as novel devices, methods and techniques, all of
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`which are alleged to comprise trade secrets within the trade secret laws of Oregon (Nike's
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`residence) and Florida (Dixon's residence).
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`(Id.
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`‘H 35.) Dixon goes on to assert counts for
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`misappropriation of trade secrets and several related claims.
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`What is perhaps most revealing is a letter that Mr. Dixon wrote to Nike on March 7,
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`2001, which is reproduced in paragraph 26 of Mr. Dixon's counterclaim at page 16. In his letter,
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`Mr. Dixon states (somewhat inartfully) that "NIKE has infringed on my copy right secrets,"
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`which Dixon submitted to Nike. He further asserts in the letter that in July 1999, he sent Nike
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`his SHOCKEE 2000 brochure. Afier asserting that Nike misappropriated his technology,
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`3 863 92____l DOC
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`Mr. Dixon alleged in the March 7, 2001 letter, "[y]our company even took from my shoes name
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`(SHOCKEE 2000) (NIKE SHOX) SHOX~KEE."
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`The date of this letter is especially significant.
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`It was sent on March 7, 2001.
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`Approximately five weeks letter, Nike served its original answers to Apex's first set of document
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`requests, including Document Request No. 14, which —- again —— requested that Nike "produce
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`all documents concerning the development and/or the introduction of the Nike product known as
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`NIKE SHOX or SHOX.” Without question, the March 7, 2001 letter fell within the scope of that
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`request.
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`Indeed, even when counsel for Apex agreed to "narrow the scope of Request No. 14 to
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`documents relating to only the selection and meaning of the name NIKE SHOX” (Opposer‘s
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`Mot. to Compel Disc., filed July 10, 2001, at 7), the March 7, 2001 letter still fell squarely within
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`the scope of that narrowed request. Yet Nike did not produce that letter, or any other document
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`relating to Mr. Dixon, at any time in this proceeding.
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`III.
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`ARGUMENT
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`A. Apex Should Be Given Leave To Amend
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`Under 37 C.F.R. § 2.107, pleadings in an opposition may be amended in the same manner
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`and to the same extent as in a civil action in a United States district court. Under Fed. R.
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`Civ. P. l5(a), afier the time has elapsed in which amendments can be made as of course, leave
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`must be obtained to file an amended pleading, and “leave shall be freely given when justice so
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`requires." See also Filmtec Corp. v. Hydramantics, 67 F.3d 931, 935, 36 U.S.P.Q.2d 1410, 1410
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`(Fed. Cir. 1995). Amendment is plainly appropriate here.
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`It appears that there is substantial
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`evidence and allegations from Roy Dixon establishing that Nike's use of the mark NIKE SHOX
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`is in violation of Mr. Dixon's rights, and that Nike did not and could not have had a bona fide
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`intent to use NIKE SHOX when it filed its present application.
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`386392_,_4l .DO(‘.
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`The Board has cautionedtthat when a plaintiff learns of additional grounds in the course
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`of discovery, it should immediate move pursuant to Fed. R. Civ. P. l5(a) to amend the pleading
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`to assert these additional grounds, so that the defendant would have notice of the plaintiffs intent
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`to rely on them prior to trial. See Donut Shops Mgmt. Corp. v. Mace, 209 U.S.P.Q. 615, 625 n.9
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`(T.T.A.B. 1981). That is exactly what Apex has done here, except that Apex did not obtain the
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`information in discovery —~ but should have.
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`In all likelihood, Nike will argue in response to this motion that it comes too late. To be
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`sure,
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`there is no arbitrary deadline by which a motion to amend must be filed.
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`See, e.g.,
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`Metromedia Steak Houses, Inc. v. Pondco II, Inc., 28 U.S.P.Q.2d 1205, 1206-07 (T.T.A.B. 1993)
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`(motion to amend filed four days after close of discovery).
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`In the present case, Apex's
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`undersigned counsel received a copy of the counterclaim in Nike, Inc. v. Dixon on August 29,
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`2002, the day before this motion was filed. Clearly, until receiving this information, Apex had
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`no basis to plead the additional allegations it wishes to assert in its proposed first amended notice
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`of opposition.
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`Moreover, the fact that Apex did not learn of this information until now is largely, if not
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`totally, the fault of Nike, which should have produced at least the March 7, 2001 letter from
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`Mr. Dixon to Nike in response to Apex's discovery requests.
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`I-Iad Nike done so, Apex could
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`have investigated and might have had the information necessary to seek this amendment during
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`the early stages of discovery in this proceeding.
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`There is also no question that the additional grounds for opposition would be fully
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`sufficient to lead to a judgment in Apex's favor. An opposition can be sustained where an
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`applicant does not have the right to lawfiilly use its mark. Vaughn Russell Candy Co. v. Cookie
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`in Bloom, Inc., 47 U.S.P.Q.2d 1635 (T.T.A.B. 1998). Moreover, an applicant's lack of a bona
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`386392__,l DOC
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`fide intention to use a mark is a proper ground for opposing an intent to use application.
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`Commodore Elecs., Ltd. v. CBM Kabushiki Kaisha, 26 U.S.P.Q.2d 1503, 1507 (T.T.A.B. 1993).
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`A trademark user is not "bona fide" and does not act in good faith when it adopts a mark in
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`anticipation of the expected use by another. See Stern Elecs., Inc. v. Kaufman, 523 F. Supp. 635,
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`640-41 (E.D.N.Y. 1981), ajfd, 669 F.2d 852 (2d Cir. 1982).
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`Accordingly, Apex has shown good grounds for granting its present motion for leave to
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`amend its notice of opposition.
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`B.
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`The Board Should Suspend Proceedings
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`To the best of Apex's knowledge, the Nike v. Dixon matter is still pending. The docket
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`sheet is attached hereto as Exhibit C, and it shows activity as recently as August 21, 2002.
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`Clearly, if Mr. Dixon prevails in his allegations that Nike's adoption of NIKE SHOX grew out of
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`Nike's alleged misappropriation of trade secret information conveyed to Nike by Mr. Dixon,
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`Nike's use of the subject mark would clearly be unlawful, and its bona fide intent would plainly
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`be absent, such that Nike would not be entitled to registration.
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`Accordingly, Apex respectfully requests that the Board suspend proceedings in this
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`opposition pending the outcome of the Oregon action, since it may fully dispose of this
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`opposition. According to the docket sheet (Exh. C), liability discovery in Nike, Inc. v. Dixon
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`must be completed by September 27, 2002, and dispositive motions must be filed by January 24,
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`2003. The case will be ripe for resolution in early 2003.
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`The opening testimony period for Apex is scheduled to begin on September 30, 2002,
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`i. e., just about a month after this motion is being filed. It would be wasteful for all concerned to
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`go through the testimony period, which would likely focus exclusively on the originally pleaded
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`issues of likelihood of confusion, only to have the court in Oregon later issue a judgment that
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`declares that Nike's use of the subject mark NIKE SHOX is unlawfitl.
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`3863‘)2_“_1 DOC
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`Apex further notes that it may voluntarily obtain, or may seek from the Board, further
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`discovery from Nike regarding the subject matter of the Dixon action and the new grounds for
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`opposition set forth in the proposed first amended notice of opposition. Any such request from
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`the Board at this time is premature at this time. As previously noted, Apex attempted to file this
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`motion at the earliest possible time afier learning about the Dixon action. Concurrent with the
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`filing of the present motion, counsel for Apex wrote a letter to counsel for Nike initiating a "meet
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`and confer" as required by 37 C.F.R. §2.120(e). These efforts may result in further voluntary
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`production by Nike, or a further motion to compel and/or for sanctions may be necessary.
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`However, such discovery efforts would presumably be suspended as well if the Board grants a
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`present request for suspension.
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`IV.
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`CONCLUSION
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`Accordingly, for all of the foregoing reasons, Apex's motion for leave to file a first
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`amended notice of opposition should be granted, and proceedings should be suspended pending
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`the outcome of the Nike, Inc. v. Dixon action.
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`Respectfully submitted,
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`LERNER, DAVID, LITTENBERG,
`KRUMHOLZ & MENTLIK, LLP
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`Attorneysfor Opposer Apex
`Foot Health Industries, Inc.
`600 South Avenue West
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`Westfield, NJ 07090
`Tel.:
`(908) 654-5000
`Faxi
`(908) 654-7
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`By:
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`Dated: August 30, 2002
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`386392 l.DO(‘
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`‘3-5* P‘
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`TRADEMARK
`APEX 1020-044
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Serial No.: 75-918,603
`
`For: NIKE SHOX
`
`Published: October 31, 2000
`
`Opposition No. 121,470
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`APEX FOOT HEALTH INDUSTRIES, INC.,
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`Opposer,
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`v.
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`.
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`:x
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`Applicant.
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`NIKE, lNC.,
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`FIRST AMENDED NOTICE OF OPPOSITION
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`In the matter of U.S. Trademark Application Serial No. 75-918,603,
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`filed
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`February 15, 2000 by Nike,
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`Inc.
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`(”Nike")
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`for the trademark NIKE SHOX as applied to
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`"footwear" in International Class 25, and published for opposition in the Oflicial Gazette of
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`October 31, 2000, Apex Foot Health Industries, Inc. (”Apex"), a corporation duly organized and
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`existing under the laws of the State of New Jersey, having its principal place of business at
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`414 Alfred Avenue, Teaneck, New Jersey 07666, believes that it will be damaged by registration
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`of the mark NIKE SHOX and hereby opposes same.
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`As grounds for opposition, it is alleged as follows:
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`1.
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`Apex is the owner of the trademark ANTI-SHOX as applied to orthopedic
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`shoes and footwear, namely arch supports, insoles and heel supports. Apex currently uses the
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`mark ANTI-SHOX on and in connection with dress orthotics, sports orthotics, conform orthotics,
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`gel insoles, heel cups, heel cradles, gel socks and gel sheets. Apex markets its ANTI-SHOX
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`386391 l.DO(‘\.
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`products in diverse ways, including the sale and advertising of its ANTI-SHOX products in
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`direct conjunction with shoes, boots, sandals and socks.
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`2.
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`Apex has used the mark ANTI-SHOX, alone and/or in conjunction with
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`other trademarks, such as LYNCO ANTI-SHOX, in interstate commerce since at least as early as
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`June of 1980. Apex's use of its ANTI-SHOX marks has been substantial, valid and continuous
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`since at least as early as June of 1980, and has at no time been abandoned. Apex's mark
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`ANTI-SHOX has become and is symbolic of extensive good will and recognition built up by
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`Apex through substantial sales and promotion.
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`3.
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`Apex is the owner of U.S. Trademark Registration No. 1,227,421 for the
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`mark LYNCO ANTI-SHOX on "orthopedic shoes, foot appliances, namely, arch supports and
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`orthopedic insoles, and orthotic devices, namely heel supports," which was registered on the
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`Principal Register on February 15, 1983, well prior to any date of use or alleged use by Nike.
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`Apex's aforesaid registration is valid and subsisting and has become incontestable under the
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`provisions of Section 15 of the Trademark Act of 1946.
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`Submitted with this Notice of
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`Opposition is an order for copies of said registration which are to be received in evidence and
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`made part of the record herein pursuant to Rule 2.122(d) of the Rules of Practice in Trademark
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`Cases.
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`4.
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`Apex is also the owner of U.S. Trademark Registration No. 1,528,071 for
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`the mark ANTI-SHOX on "foot appliances ~— namely, arch supports, insoles and heel supports,"
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`which was registered on the Principal Register on March 7, 1989, well prior to any date of use or
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`alleged use by Nike. Apex's aforesaid registration is valid and subsisting and has become
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`incontestable under the provisions of Section 15 of the Trademark Act of 1946. Submitted with
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`this Notice of Opposition is an order for copies of said registration which are to be received in
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`38(S39l,___1.D()(‘\
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`evidence and made part of the record herein pursuant to Rule 2.122(d) of the Rules of Practice in
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`Trademark Cases.
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`5.
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`In 1988, Apex filed Opposition No. 79,465 in which Apex opposed U.S.
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`Trademark Application Serial No. 73/684,484 filed by Autry Industries, Inc. to register SHOX
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`for "athletic shoes."
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`6.
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`On February 12, 1991, the Trademark Trial and Appeal Board issued a
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`decision sustaining Apex's opposition to registration of the mark SHOX. A true copy of the
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`aforesaid decision is annexed hereto as Exhibit A.
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`7.
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`Applicant Nike has applied to register the mark NIKE SHOX as applied to
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`"footwear."
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`Said application was filed without an allegation of use in commerce under
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`Section 1(b) of the Trademark Act of 1946 on February 15, 2000, well after Apex's first use of
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`the mark ANTI-SHOX.
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`8.
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`Applicant Nike's alleged trademark NH{E SHOX so resembles Apex's
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`mark ANTLSHOX, as applied to the respective goods of the parties, that Nike's mark NIKE
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`SHOX is likely to cause confusion, or to cause mistake or to deceive.
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`9.
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`Upon information and belief, Nike is not lawfully using the mark
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`NIKE SHOX and cannot lawfully use the mark NIKE SHOX, because any such use would
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`be in violation of the trade secret, confidentiality and other rights of Roy Dixon as more
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`particularly set forth in Mr. Dixon's counterclaim, filed on or about April 5, 2002, in the
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`action entitled Nike, Inc. v. Roy Dixon, Case No. CV '01-1459 (BR) in the United States
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`District Court for the District of Oregon.
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`10.
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`Upon information and belief, at
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`the time Nike filed its subject"
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`application, it did not have a bona fide intention to use the mark NIKE SHOX as asserted
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`386391 l.DO(‘\
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`in such application, in that any such intended use of NIKE SHOX was in derogation of the
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`rights of Roy Dixon as set forth in the aforesaid action.
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`11.
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`Apex believes it would be damaged by the granting of the registration
`
`herein opposed to Nike, in that Nike would obtain a prima facie exclusive right to use the mark
`
`NIKE SHOX, which would be a source of detriment and damage to Opposer Apex.
`
`WHEREFORE, Opposer Apex prays that said Application Serial No. 75/918,603
`
`be rejected, and that no registration be issued thereon to Applicant Nike, and that this opposition
`
`be sustained in favor of Opposer Apex.
`
`Please charge any fee in connection with this filing of a First Amended Notice of
`
`Opposition in one class to our Deposit Account No. 12-1095. The undersigned is authorized to
`
`make charges to said deposit account.
`
`Respectfully submitted,
`
`LERNER, DAVID, LITTENBERG,
`KRUMHOLZ & MENTLIK, LLP
`
`Attorneys for Opposer Apex Foot
`Health Industries, Inc.
`600 South Avenue West
`
`Westfield, NJ 07090
`
`Tel.: (908) 654-5000
`Fax: (908) 654-7866
`
`Dated: August _, 2002
`
`By:
`
`Roy H. Wepner
`
`386391 l.DO('\
`
`4
`
`

`
`
`
`Gordon S. Gannicott, OSB # 84230
`gordon@hoIIanderIaw.com
`HOLLANDER, LEBENBAUM, GANNICOTT
`1-500 S.W. First Ave., Suite 700
`Portland, OR 97201-5860
`Telephone: (503) 222-2408
`Facsimile: (503) 222-0659
`
`Maria P. Sperando, FSB #635080
`mps@wiI|iegary.com
`GARY, WILLIAMS, PARENTI, F INNEY,
`MCMANUS, WATSON & SPERANDO
`221 E. Osceola Street
`
`LEWIS,
`
`Stuart, FL 34994
`Telephone: (561) 283-8260
`Facsimile: (561)220-3343
`Admitted pro hac vice
`
`Attorneys for Defendant/Counterclaimant
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF OREGON
`
`Case No. CV '01 — 1459 BR
`I
`
`ANSWER WITH AFFIRMATIVE
`
`DEFENSES AND COUNTERCLAIM
`
`OF DEFENDANT, ROY DIXON
`
`NIKE, INC.,
`An Oregon corporation,
`
`PIaintiff/Counter-defendant,
`
`ROY DIXON,
`
`DefendantlCountercIaimant.
`
`‘,1/V-é\&\I退\J\qf€§I\Z
`
`Answer with Affirmative Defenses and
`Counterclaim of Defendant,
`Roy Dixon
`
`

`
`
`
`Defendant/Counterclaimant, ROY DIXON (“DIXON”), by and through his
`
`attorneys, answers the Complaint of NIKE, INC. (“NIKE”) against him, asserts the
`
`within affirmative defenses, and sets forth his Counterclaim, all as follows:
`
`1-2.
`
`DIXON admits the allegations of 111] 1 and 2.
`
`3.
`
`DIXON admits that NlKE’s claims, to the extent valid, arise under the
`
`Declaratory Judgment Act, 28 U.S.C., §2201-O2 and the Oregon Uniform Trade
`
`Secrets Act, O.R.S. §§646.461 et seq., and that an actual and justiciable
`
`controversy now exists between the parties.
`
`4.
`
`DIXON admits that this Court has jurisdiction of NlKE’s claims within
`
`the contemplation of 28 U.S.C. 1332(a) and 1363. However, DIXON denies that
`
`this Court has jurisdiction under either 28 U.S.C. 1331 or 1338(a).
`
`5.
`
`6.
`
`7.
`
`8.
`
`DIXON denies the allegations of 115.
`
`DIXON denies that venue in this district is proper pursuant to 28
`
`U.S.C. §1391(b).
`
`Upon information and belief, DIXON admits the allegations of 117.
`
`DIXON is without sufficient knowledge to plead regarding NlKE’s use
`
`of the term “foam-plastic” as an adjective preceding the term "columns” in {[8, and
`
`denies the final sentence thereof to the extent that NIKE asserts that IlIustration1 of
`
`118 represents the sole appearance of all models of the NIKE SHOX product.
`
`9.
`
`DIXON denies the allegations of {[9 and, more particularly, that NIKE’s
`
`so—called mechanical columnar footwear project was a predecessor in relevant
`
`subject matter to the NIKE SHOX footwear at issue in this proceeding.
`
`10.
`
`DIXON is without sufficient information or belief to plead regarding
`
`Answer with Affirmative Defenses and
`Counterclaim of Defendant,
`Roy Dixon
`
`2
`
`

`
`
`
`the allegations of 1110.
`
`11.
`
`Upon information and belief, DIXON admits the allegations of 111 1.
`
`12.
`
`DIXON denies the allegations of 111 2 to the extent that said allegations
`
`assert that the "final design direction” of NIKE’s mechanical columnar footwear
`
`project independently led to the NIKE SHOX product.
`
`13.
`
`DIXON denies the allegations of 111 3 to the extent that said paragraph
`
`asserts that NIKE ever produced and tested hybrids of a columnar suspension
`
`system of the type in Illustration 4 of 1113 which did not include a leaf spring within
`
`the midsole or heel thereof.
`
`14.
`
`DIXON is without sufficient information or belief to plead regarding
`
`the allegations of 1114.
`
`15.
`
`DIXON denies 1115 to the extent that NIKE asserts that the intellectual
`
`property referred to in said paragraph was a relevant precursor to the NIKE SHOX
`
`footwear product at issue in this proceeding.
`
`16.
`
`DIXON denies the allegations of 1116 and, particularly, that the year of
`
`contacts with Hyperlast Limited relevant to the subject matter of this litigation was
`
`1 996.
`
`17.
`
`18.
`
`Upon information and belief, DIXON denies the allegations of 1117.
`
`DIXON denies that any significant developmental work regarding the
`
`subject matter of this litigation occurred in the year 1998 and denies that the
`
`laboratory testing and analysis referred to in 1118 occurred independently of any
`
`relevant external
`
`inputs of third parties, particularly DIXON. As such, DIXON
`
`denies 1118.
`
`Answer with Affirmative Defenses and
`Counterclaim of Defendant,
`Roy Dixon
`
`3
`
`

`
`
`7‘
`
`19-20.
`
`DIXON is without sufficient information or belief to plead regarding
`
`the allegations of 111119-20.
`
`21.
`
`Upon information and belief, DIXON admits the allegations of 1121.
`
`22.
`
`DIXON admits that NIKE conducted athletic shoe research since 1984
`
`but denies that any research prior to 1998 was relevant to the subject matter of this
`
`proceeding.
`
`23.
`
`DIXON admits the allegations of 1123.
`
`24.
`
`DIXON is without sufficient information or belief to plead regarding
`
`the allegations of 1124.
`
`25.
`
`DIXON admits the allegations of 1125.
`
`26.
`
`DIXON admits that he was not the first person to ever employ
`
`columnar springs in any manner in any type of footwear. As such, DIXON does not
`
`assert that the scope of his ‘431 patent encompasses more than that set forth by
`
`the claims thereof.
`
`27.
`
`DIXON admits that, in recent years, NlKE’s research evolved away
`
`from coil-spring technology of the particular type shown in DIXON’s ‘431 patent.
`
`DIXON, however, denies that NIKE ever obtained any utility patent regarding the
`
`subject matter of this proceeding.
`
`28.
`
`DIXON admits the allegations of 1128.
`
`29.
`
`DIXON denies the allegations of 1129 in that DIXON’s second
`
`submission to NIKE occurred in mid-1999, not 2000. DIXON’s 1999 submission,
`
`which is more fully set forth in the Counterclaim below, did not include DIXON’s
`
`‘431 patent as a significant component thereof.
`
`Answer with Affirmative Defenses and
`
`Counterclaim of Defendant,
`Roy Dixon
`
`4
`
`

`
`
`
`30.
`
`DIXON denies the allegations of 1130 and, particularly, denies that
`
`NIKE’s external invention review process was physically and organizationally
`
`removed from its mechanical columnar footwear project or from new product
`
`development associated with the NIKE SHOX project.
`
`31.
`
`DIXON denies the allegations of 1131.
`
`32.
`
`DIXON denies the allegations of 1132 and, more particularly, denies
`
`that NIKE had achieved any significant development of the NIKE SHOX product
`
`prior to 1999. DIXON particularly denies that NIKE had been working with
`
`Hyperlast on shoes with polyurethane columns prior to 1997.
`
`33.
`
`DIXON admits the allegations of 1133; however, DlXON’s expressions
`
`that NIKE had infringed his ‘431 patent were based upon a misunderstanding of the
`
`scope of his patent and were at a time before DIXON had consulted counsel in
`
`connection with the subject matter of the present controversy.
`
`34-35. DIXON, upon information and belief, admits the allegations of 1134-35.
`
`36.
`
`DIXON admits the allegations of 1136 to the extent that his beliefs
`
`regarding infringement of his ‘431 patent were based upon a misunderstanding of
`
`the scope of the claims thereof. DlXON’s expressions of “outrage” were, however,
`
`more particularly directed to other concepts and technology, apart from his ‘431
`
`patent, that DIXON had provided to NIKE in 1999.
`
`37.
`
`DIXON denies the allegations of 1137 and, particularly, denies that any
`
`counsel of DIXON ever alleged infringement of DlXON’s ‘431 patent.
`
`38.
`
`DIXON denies the allegations of 1138 to the extent that said paragraph
`
`attempts to connect DlXON’s earlier allegations of patent infringement to DlXON’s
`
`Answer with Affirmative Defenses and
`Counterclaim of Defendant,
`Roy Dixon
`
`5
`
`

`
`
`1‘
`
`L.»
`
`later allegations of theft of trade secrets as embodied in a letter of August 28, 2002,
`
`referred to in 1138. DIXON further denies that the intent of the letter of August 28,
`
`2001, of his counsel was to instill fear in NIKE of a public relations assault by black
`
`customers of NIKE.
`
`39.
`
`DIXON denies the allegations of 1139 to the extent that NIKE alleges
`
`that its NIKE SHOX product does not make use of any coil-spring technology or
`
`principles.
`
`40.
`
`NIKE's 1140 is moot in light of a revision of the 1.5 billion dollar
`
`number set forth in 1140, as is more particularly set forth below in DlXON’s
`
`Counterclaim.
`
`41.
`
`DIXON is without sufficient information or belief to plead regarding
`
`the allegations of 1141. However,
`
`the allegations of
`
`1141
`
`reflect DlXON’s
`
`misunderstanding w

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