Cases & Deals

Street Surfing successful in "Bet the company" international arbitration against Korean company Decolee

Clients Street Surfing

Jones Day successfully represented Street Surfing against Decolee, a Korean company in a "bet the company" international arbitration, which was tried successfully over a 7 day period. Decolee's principal was the inventor of a new skateboard, which his company calls the Ess Board. The Ess Board is a two-wheeled board, with two "deck" pieces connected in the center by a torsion bar. The board is self-propelled, and moves by the rider's twisting of his or her torso. The board can spin 360-degrees, and, with practice, can even be ridden uphill. In July of 2004, Street Surfing and Decolee entered an Exclusive License Agreement and worldwide Manufacturing Agreement. Under the License, Street Surfing was given the exclusive right to sell and market the board in the Americas and Europe. The board Street Surfing now sells is called "The Wave." The company also sells a smaller version of The Wave for small children, called The Ripple, along with a complete line of accessories (wheels, helmets, etc.). Under the Manufacturing Agreement, Street Surfing has the exclusive right (even as to Decolee) to manufacture both The Wave and the Ess Board.

Shortly after entering those contracts, the relationship between Street Surfing and Decolee began to break down. Street Surfing became concerned about the patentability of the Ess Board and, because of those concerns, withheld making certain advance royalty payments to Decolee. Decolee, in turn, was upset by Street Surfing's withholding of royalty payments; sought to rescind both contracts in arbitration; and, even entered a separate license agreement with Razor (the inventors of the Razor Scooter) for the United States and England. Razor controlled Decolee's litigation against Street Surfing, and in the arbitration, was represented by Razor's long-time counsel.

Jones Day was retained after Street Surfing suffered some major losses before the arbitrator. Street Surfing's prior counsel moved for preliminary injunctions against Decolee/Razor before the arbitrator (and, separately, in federal court), and lost - with the arbitrator finding a lack of likelihood of success on the merits. The Firm faced an uphill battle; if we lost, Street Surfing would be out of business. Jones Day flew to Korea to depose all of the Decolee witnesses (none of whom spoke English) over a five day period. The key admissions obtained in those depositions, combined with all of the hard pre-trial work of the entire team, proved critical. In the end, the arbitrator ruled in Street Surfing's favor. In so ruling, the arbitrator affirmed the validity of Street Surfing's license and manufacturing contracts. Moreover, the arbitrator specifically acknowledged that, although he previously had found that Street Surfing unlikely to prevail on the merits, the team from Jones Day, and the evidence and argument put forth by the Firm, caused him to change his mind. Street Surfing was subsequently awarded a multi-million dollar contract from a national retail store, and is achieving huge success in the market for The Wave.

Creative Products Group v. Decolee Co., Ltd. (AAA International Centre for Dispute Resolution)