Neways Wins Court Victory Enjoining Sisel and Five of its Top DistributorsSALT LAKE CITY--(Business Wire)--
A federal court in Utah has issued an injunction against Sisel
International, LLC and five of Sisel's top distributors in Japan.
Among other things, the injunction requires Sisel and these
distributors to return all of Neways' distributor information in their
possession and prohibits Sisel and its distributors from using such
information. In addition, the Court found that Sisel's top three
distributors--Koji Yamamoto, Fumiko Matsumoto and Toru
Egashira--likely have breached their contracts with Neways by
recruiting Neways distributors to join Sisel, and are now prohibited
from continuing to recruit Neways distributors for a period of one
year from each distributor's date of suspension from Neways.
In its 23-page ruling issued February 11, 2008, the Court ordered
Sisel, Mr. Yamamoto, Ms. Matsumoto, Mr. Egashira, Kaoru Kitagawa, and
Chiharu Hayashi to thoroughly search for and return all information
relating to Neways' distributors and prohibited them from using such
information in the future.
The victory was a significant one for Neways, and came after a
two-week evidentiary hearing in federal court. Neways alleged that
Sisel and its Japanese distributors were misappropriating Neways'
confidential and trade secret information regarding Neways'
distributor network, and that the Japanese distributors were breaching
their contracts with Neways by soliciting Neways distributors to join
Sisel. After hearing all of the evidence, including testimony by the
Japanese distributors themselves, the Court found that Neways was
likely to prevail on these claims and that the defendants should be
enjoined.
This is the third time in less than a year that Neways has
prevailed against Sisel or one of Sisel's distributors. In May 2007,
the same federal court ordered Sisel, its owner Thomas Mower, Sr., and
several of its employees to return all copies of Neways' product
formulas, vendor lists, and distributor lists, and prohibited them
from continuing to use that information. Two months later, a Utah
state court entered an order against Sisel distributors Jef and
Patricia Welch restraining them from recruiting any present Neways
distributor to participate in another multi-level marketing company.
As a result of the federal court's recent ruling, a similar restraint
is now in place against Mr. Yamomoto, Ms. Matsumoto, and Mr. Egashira.
"Neways is extremely pleased with the Court's ruling," said Eric
Larsen, Neways' C.E.O. "In enjoining Sisel and its top Japanese
distributors, the Court has affirmed what Neways has always
believed--that companies are free to compete in this market, but they
must do so fairly and honestly. We hope that is what we will see in
the future."
Chris Crump, Neways' General Counsel, said a significant part of
the case against Sisel has been about protecting Neways' distributors
and confidential distributor information. "Two courts have now
recognized the importance of those protections," said Crump, "and
Neways will continue to take all necessary steps to ensure that our
distributors' businesses are protected."
The case will now proceed on Neways' other claims against Sisel,
Mr. Mower, and the other defendants. These claims include allegations
that Mr. Mower breached his fiduciary duties to Neways, that Sisel's
products are the result of unlawful theft by Sisel of Neways' trade
secrets, and that Mr. Mower and a number of other Sisel employees have
intentionally destroyed evidence to prevent it from being discovered
in the case.
The case is entitled Neways Inc. v. Thomas E. Mower, Sr., et al.,
No. 2:07-CV-339.
