There are no two bigger rivals in business than Nike and Adidas. Nike owns a 17% share of the global sportswear market, Adidas owns 12%. Nike has leveraged cutting-edge design to increase its foothold, while Adidas has watched sales plummet, even following its $150 million World Cup sponsorship.
So it was a major coup for Adidas last September, when three high-profile Nike designers—Marc Dolce, Mark Miner, and Denis Dekovic—left to found a Brooklyn design studio for Adidas. But last week, Nike filed a $10 million lawsuit against the designers, alleging that they leveraged trade secrets to get the job.
Co.Design has acquired the 50-page suit from the Multnomah County Circuit Court, where it was filed, and embedded it at the bottom of this story for you to explore. The document reads like a white-collar crime novel, as Nike portrays the three designers as bartering corporate secrets in exchange for freedom, fame, and fortune. In Nike’s telling, they’re so insecure that they purchase social media followers to boost their perceived popularity. And they’re so dissatisfied with their own selling out, Nike claims, that they plan to ditch Adidas anyway. For those who don’t have the wherewithal to read a 50-page lawsuit, here are the document’s juiciest allegations.
The Designers Copied Nike Corporate IP On Their Way Out
As Nike tells the story, Dolce, Miner, and Dekovic decided to open their own shoe design studio, an independent brand that could eventually compete in the global market, in April 2014. But without financial backing, they began negotiations to open a Brooklyn design studio under Adidas. By August, they each had contract offers with the company. And in September of the same year, the team left Nike together, proclaiming their new allegiance for Adidas on their last day.
But before leaving Nike, the designers promised Adidas “a wealth of information and knowledge” that would give Adidas the advantage over Nike, and they allegedly copied thousands of proprietary documents on Nike’s upcoming product and promotional road maps–complete with performance details, testing methodologies, and information on new materials–to bring with them.
The three designers had all signed very similar noncompete agreements, which prohibited them specifically from working for Adidas during or for one year after leaving Nike. It also prohibited them from copying corporate IP.
The Designers Not-So-Carefully Covered Their Tracks
To avoid detection while planning their departure, the designers stopped using their Nike email accounts to communicate as early as April, but they continued to use their Nike-owned iPhones and laptops. In an unspecified communication, Miner expressed that it probably wasn’t a good idea to be chatting on corporate equipment, and suggested they at least switch to WhatsApp for more private communications.
The caution, and lack-there-of, failed. Nike claims to have “tens of thousands” of messages shared between Dolce, Miner, and Dekovic that trace months of plotting to leave the company.
Dekovic May Have Handed Nike The Very Pile Of Evidence Needed For This Lawsuit
Nowhere in the suit does Nike reveal exactly how it acquired all of these communications, though the document implies that Nike may have been monitoring the designers. Furthermore, Nike used digital forensics to mine the corporate laptops and iPhones that the trio had been using to communicate. The Oregonian reported that Nike worked with Virginia’s CyTech Services to perform data forensics.
Less than two weeks before leaving the company, Dekovic had the contents of his corporate laptop copied (Miner and Dolce suggested just ripping out the hard drive, but concluded that might look too suspicious). And three days before leaving, Nike says Dolce emailed himself a .ZIP file containing confidential documents including a yet-to-be-released shoe design for a Nike-sponsored athlete.
According to the suit, Dolce and Miner both erased their iPhones before handing them back to the company, but apparently Dekovic turned in his gear “physically damaged” rather than erased “wrongfully believ[ing] that both items [his phone and his laptop] had been damaged so badly that Nike could not access their contents,” the suit says.
So Dekovic may have served as Nike’s chief source of intel–though it’s technically feasible that Nike may have been able to extract data from Dolce and Miner’s wiped iPhones, too.
They Never Really Wanted To Work For Adidas, And Planned To Jump Ship ASAP
Nike claims the designers’ original plan had been to open an independent design studio, which they dubbed names like H-Design and Satellite. Without financial backing, though, they decided the best course of action would be to pitch Adidas on the idea. Adidas had already expressed interest in recruiting Dolce and Dekovic, as Brian Foresta, an Adidas VP and former Nike executive, reached out in March of 2014 to “discuss their professional careers.”
The trio had hoped the studio could be independently operated, and proposed to one another that such an arrangement might work around Nike’s noncompete agreement. Adidas wanted more buy-in, though, and the designers decided to “cash in” and temporarily give up their plan for independence. But they said that they didn’t really want to work for the company, the suit claims.
As one of the designers is said to have communicated, “As soon as we are ready, we can terminate the agreement with Adidas and being the [independent] studio.”
The Designers Purchased Social Media Followers To Boost Their Appeal To Adidas
Though Dolce, Miner, and Dekovic have helped design some of Nike’s biggest recent hits across running, basketball, and soccer–like Nike’s Free running shoes and Magista soccer cleats–they apparently felt they needed to appear more famous to attract investment from Adidas or anyone else.
So in May 2014, a month after initiating talks with Adidas, Dolce and Dekovic agreed to buy fake followers on Instagram and Twitter, Nike says. Nike concludes that 85% of their followers have been purchased.
Dekovic Had a Side Business He Hid From His Partners
The suit outlines a private venture Dekovic had started that even Dolce, Miner, and Adidas didn’t know about that violates Dekovic’s non-compete, Nike claims. He was working on a Michael Jackson-inspired throwback shoe and sportswear line called Moonwalker, complete with investors and product launches planned for 2015 and 2017.
Dekovic projected Moonwalker making $93 million in revenue in the first six years, according to recovered documents. Nike writes that the first three shoe designs discovered in a Dekovic PowerPoint presentation are “essentially copies of vintage Nike footwear.” Nike claims ownership over Dekovic’s Moonwalker creations.
Miner Almost Asked Nike HR For His Noncompete Agreement To Give To Adidas
Concerned that Nike might sue them for breach of contract when they left the company, the designers got Adidas to agree to provide legal representation as part of their employment. The legal team wanted to see a copy of their noncompete agreements. Miner then asked Dolce and Dekovic if he should just ask Abby in Nike HR for the document. Dolce replied, “No way!!!” Dekovic already had a copy.
On His Way Out, Dekovic Left The Door To Nike Open
Despite months of alleged collusion, Nike says that the three designers all left the company graciously. In this moment, Dekovic, who had developed side projects with both Adidas and independent investors for his Moonwalker line, was the one to try the hardest to keep his reputation with Nike in good standing.
We have reached out to Dolce, Miner, and Dekovic for comment but have not heard back.
The full document is below and hosted on Scribd.