New York residents may be familiar with shoe designers Nike and Adidas, but they may be surprised to hear about allegations that former designers for Nike may have stolen commercial secrets. The three individuals accused were once senior footwear designers for Nike. The company alleges that the individuals conspired to use its intellectual property in violation of non-compete agreements. In September, Adidas announced its plans to employ these individuals in a Brooklyn studio for shoe design.
According to a lawsuit filed by Nike, the individuals pitched a design studio idea for creating new products for Adidas. At the same time, the individuals are alleged to have provided information about upcoming years' plans in connection with sportswear products. The studio is reportedly quite similar to a design lab used by Nike and was allegedly used to obtain lucrative contracts with Nike's major competitor. The company claims that its intellectual property was taken from work computers used by the employees and that those involved attempted to wipe out incriminating data from cellphones and computers used for work.
Nike indicates that an estimated $10 million in damages has resulted from the actions of these former employees. Additionally, the three men reportedly initiated their consultations with Adidas prior to leaving Nike, although their non-compete terms required avoiding any involvement with the competitor for at least one year following their employment with Nike. Additional allegations suggest that Adidas agreed to bear any legal costs that might be incurred over the non-compete agreements.
A company faced with the need to protect its intellectual property may use non-compete agreements to prevent competitors from hiring former employees in an effort to access trade secrets. It may be helpful to discuss additional legal avenues for protecting intellectual property with a lawyer who is experienced in this area of business law.
Source: Reuters, "Nike accuses former shoe designers of taking secrets to Adidas", Andrew Chung, December 09, 2014