You’re only as valuable as what sets you apart from others in your field. That’s what distinguishes Apple from Microsoft, Google from Yahoo!, Coke from Pepsi, and bring value to each individual company: the intellectual property (IP) and the people who create it. While they can be incredible assets, they can also become threatening liabilities.

And this is precisely why Nike is suing Adidas for $10 million in damages.

Let’s set the stage for the Nike/Adidas case: the lawsuit-which was filed in Oregon, where Adidas has its U.S. headquarters-alleges that some of its biggest designers, Denis Dekovic, Marc Dolce and Mark Miner, began to build a blueprint to replicate Nike’s famous Innovation Kitchen while still employed by Nike. (The Kitchen is where Nike’s top designers test new materials and concepts for their shoes years in advance). Nike claims that Dekovic had the contents of his laptop duplicated, which gave him access to “thousands of proprietary documents relating to Nike’s global football (soccer) product lines” where Adidas and Nike most fiercely battle.

Darren Rovell of ESPN adds that, “Among other things, the documents included specific designs, including models of team uniforms and products for the 2016 European Championships, plans for Nike-sponsored athletes in at least seven countries, unreleased financial information and projections concerning the company’s business and information about Nike’s planned launches in the marketplace.”

In the Portland Business Journal, the designers submitted a rebuttal through their law firm and commented, “We find Nike’s allegations hurtful because they are either false or are misleading half-truths. We did not take trade secrets or intellectual property when we departed Nike in September. The athletic footwear industry is fast moving and rapidly changing and, as creative people, we thrive on innovation and freshness. We are looking forward to bringing new and innovative ideas and designs to Adidas when our non-competition agreement expires.”

While Adidas didn’t specifically deny the charges, they did say that, “Many of our employees have storied careers and rich experiences, but we have no interest in old work or past assignments as we are focused on shaping the future of the sporting goods industry, not looking at what has been done in the past.”

It’s too early to tell what the outcome looks like for this case or what will happen to the three designers in question.

What if this happens to my business?

Unfortunately, this data breach can happen to any business. From client lists to customized software programs, any trusted employee can be lured by the promises of your competition and give away your trade secrets. However, there are ways to protect your company’s intellectual property:

  • Have your employees sign a confidentiality agreement or non-disclosure form. If they do leave your business and leak secrets, you can sue for damages.
  • Depending on the type of your business, you can include a clause in your employee handbook that that states: If an employee is terminated, he or she cannot work for a competitor, share trade secrets and client lists. In addition, the ownership of the employee’s work product (software, books, recipes, designs, etc.) belongs to the company and not the creator.

While these methods aren’t foolproof, they will help protect your intellectual property to some extent.

About the author

Christina Morales

Christina helps provide useful business and legal tips on UpCounsel for our customers and visitors. Having over a decade of writing experience in a variety of industries, she has also been very close to the legal space from a young age with family members who continue to practice business and tax law.

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