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REEBOK'S REQUEST FOR A TEMPORARY RESTRAINING ORDER DENIED; SPORTS STEP SEEKS TO GIVE REEBOK A JUDICIAL HOT FOOT

 REEBOK'S REQUEST FOR A TEMPORARY RESTRAINING ORDER DENIED;
 SPORTS STEP SEEKS TO GIVE REEBOK A JUDICIAL HOT FOOT
 ATLANTA, March 23 /PRNewswire/ -- It's the 1990s version of David and Goliath.
 A U.S. district judge has denied a request by Reebok (NYSE: RBK) that Sports Step, Inc., the pioneer in step training, must continue to put former partner, now competitor, Reebok's trademark on its health club products. In denying Reebok's request for a temporary restraining order, Judge Marvin H. Shoob stated: "I would hesitate...to require a company to carry a logo that it doesn't want to carry....I have never seen it done...That is somewhat foreign to the normal process."
 Judge Shoob suggested a May trial for Sports Step's suit against Reebok International for breaching a joint licensing agreement and the ensuing countersuit.
 Sports Step, a Georgia-based corporation with 1991 sales of $19 million, is suing giant Reebok (1991 sales of $2.7 billion). Sports Step contends Reebok has begun marketing a competing adjustable platform while operating under a licensing agreement with Sports Step. Moreover, Sports Step contends Reebok took these steps at the same time it had initiated negotiations to acquire Sports Step.
 In his remarks to the judge, Reebok's attorney used the analogy that its trademark monopoly was like a "bundle of sticks." After Judge Shoob refused Reebok's request for a temporary restraining order, Sports Step President Richard Boggs stated, "Reebok claimed to have all the sticks, but it appears they were left with the short end of this one."
 Sports Step's complaint, filed in the U.S. District Court for the Northern District of Georgia, outlines Reebok's attempt to muscle into the burgeoning market for adjustable platforms -- a market that Sports Step started and has worked unceasingly to develop.
 Sports Step's introduction of THE STEP product came at a time when aerobics "had lost much of its spark." "Aerobics wasn't new any more," stated Greg Baldwin of Philadelphia's Gold Medal Sporting Goods. "Step aerobics was something new to grab interest," he continued. This new sector of the sports and fitness industry had 1991 sales estimated at over $100 million, and sales of over $200 million are predicted by 1993.
 Boggs believes that corporate powerhouse Reebok is taking "unfair advantage" of the cross-licensing agreement. "I thought sneakers meant their shoes! Reebok is attempting to take advantage of all that Sports Step has done for the past two years, even trading on the name (STEP) itself. I believe Reebok decided that there was real money in the market Sports Step developed, and is now trying to step all over us," Boggs explained.
 Specifically, Sports Step describes in its complaint how Reebok:
 -- Initiated acquisition discussions in the fall of 1991;
 -- Concurrently asked for extensions to a contractual requirement that it was to notify Sports Step regarding renewal of the licensing agreement;
 -- Used this period of time to continue development of a competing adjustable platform product, and
 -- Publicly introduced its adjustable platform at the Super Show only minutes after officially informing Sports Step of its intentions.
 "I feel Reebok pulled the equivalent of an economic Pearl Harbor on us," Boggs stated. "We were negotiating in good faith regarding the sale of the company to Reebok, and/or a continuation of the joint licensing agreement."
 Sports Step was incorporated in August 1989 to market the newly invented adjustable platform, "THE STEP." THE STEP product was designed as a safe and versatile product that could be adjusted to vary the intensity of the workout. The aerobic exercise was aptly named "step training."
 Reebok entered the picture shortly thereafter, creating a training and choreography program tailored for step training. Reebok informed Sports Step that the program was a method for Reebok to promote its trademark and enhance its sales of athletic footwear and its corporate image.
 Initially, Sports Step offered to sell Reebok "THE STEP" product. Reebok declined, stating that it had no intention to sell adjustable platforms.
 However, the two firms did enter negotiations over a licensing agreement. While negotiations were taking place, but before they were finalized, Reebok began to promote the training and choreography for this newly developed aerobic exercise as the "Step Reebok" program.
 A two-year licensing agreement was finalized on Jan. 17. 1990, in which both companies agreed to cooperate with one another in the promotion of Sports Step's "THE STEP" product and Reebok's "Step Reebok" program. Each company was to advertise and support the business of the other.
 Although the obligations and rights of both parties were delineated in the licensing agreement, Reebok failed to live up to them. For example, during 1990, Reebok's promotional materials included photos of primary competitors of Sports Step's "THE STEP" product.
 During the last half of 1991, Sports Step became aware of rumors that Reebok was developing its own adjustable platform. Raising the question with Reebok on a number of occasions, Sports Step was told a decision to introduce the product had not been made. As late as Jan. 29, 1992, just three days before the opening of the Super Show and Reebok's introduction of its competitive product, one of Reebok's directors said Reebok was not coming out with its own adjustable platform, "to the best of" his knowledge.
 However, approximately 150 Reebok-produced adjustable platforms were then being used in a Boston health club. This is a possible violation of the licensing agreement and further illustrates Reebok's lack of good faith.
 Moreover, in a March 11 affidavit, Reebok's director of marketing intimates that Reebok's name on THE STEP product is critical to their Step Reebok program. Roseann Hassey stated that "Step Reebok's presence in the health club market by virtue of the display of the Reebok trademark on the Sports Step health club STEP was, and is, thought to be a crucial strategic part of Reebok's overall, long-term effort to establish itself as the industry leader in promoting fitness."
 Although Sports Step's growth has been superb, Reebok's sales are almost 150 times those of Sports Step. Because of Reebok's size and market dominance, Boggs is using the only weapon he has available -- judicial action. The upcoming court case will determine whether Reebok materially breached the licensing agreement, whether the agreement is terminated, and whether Sports Step is excused from future performance of the agreement.
 "Sports Step is looking to the court for protection," explained Boggs. "We want Reebok to be taught that just because you're a huge company, you can't play by a different set of rules. This nation is still dedicated to the ideals of fairness."
 Additional information regarding this issue can be found in the complete judicial filing. It is available upon request.
 -0- 3/23/92
 /CONTACT: Dean Trevelino or Sandra Moreland of A. Brown-Olmstead Associates, 404-659-0919, for Sports Step/
 (RBK) CO: Sports Step, Inc.; Reebok International ST: Georgia IN: SU:


BN-TG -- AT001 -- 0401 03/23/92 08:32 EST
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Date:Mar 23, 1992
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