NEW YORK: The massive heist from the world’s biggest sportswear firm was, as Nike attorneys allege, an inside job.

Faking a broken laptop, one of the sneaker giant’s top directors is said to have met secretly with an interloper to copy some of what a Nike lawsuit this week called the firm’s “most important and highly confidential” intelligence.

Days later, the director and two other elite designers defected to the firm’s bitter rival, allegedly scrubbing e-mails and text messages that, attorneys said, hid “evidence of their betrayals.”

The claims of stealth and subterfuge have reignited Nike’s decades-long sneaker war with Adidas, the German-based shoe titan and Nike’s chief competitor. But they have also cast a spotlight on the high-stakes palace intrigue hidden beneath the world’s fiercely competitive, multibillion-dollar sneaker and sportswear empire.

“It takes an army to bring a shoe to market. You don’t sit down with a cocktail napkin and draw a shoe and take it to Asia to make it,” said Matt Powell, a sports industry analyst at the NPD Group, a market research firm. “They were all three rock stars of the design world. This is a huge loss for Nike and a gain for Adidas, and it’ll take many, many months for all this to play out.”

In its 50-page legal complaint, Nike accuses the designers — Denis Dekovic, Marc Dolce and Mark Miner — of breaching their contracts, stealing trade secrets, and making off with what lawyers called “a treasure trove of Nike product designs, research information and business plans.”

Nike is seeking up to $10 million in damages and has asked the court for a temporary restraining order blocking the designers’ new initiative, an Adidas-backed design studio in Brooklyn. The suit says the three had non-compete agreements blocking them from working with a rival brand for a year after leaving Nike.

The designers said in a statement through their attorney, Matt Levin, that they “poured in hours, passion and dedication [at Nike] beyond what was asked or expected of us, often prioritizing our jobs over our families.”

They said they never took trade secrets or intellectual property and called Nike’s allegations hurtful, false or “half-truths.” Levin said late Wednesday that his clients “are looking forward to having their day in court.”

A Nike spokesman called the firm “an innovation company” and said, “We will continue to vigorously protect our intellectual property.” In a statement, an Adidas spokesman said, “We have no interest in old work or past assignments as we are focused on shaping the future of the sporting goods industry.”

Nike has for years guarded the mystique of its secretive research-and-design labs, called the Innovation Kitchen and the Zoo. In the past two years, the company has invested more than $1.5m in a company-wide security campaign, called “Keep It Tight,” designed to safeguard its trade secrets.

The lawsuit alleges a staggering breach. The designers, attorneys said, fled with thousands of documents outlining Nike’s long-term business strategy, unreleased shoe and uniform designs, and even details of “highly confidential and proprietary virtual footwear product design and computer simulation testing methodology.”

Nike and Adidas are the titans of the world’s $5.5bn soccer-shoe industry, and they comprise 70 per cent of the soccer-wear market. They’re also fierce competitors in the US sneaker business, which grew last year to $22bn, a record.

This year featured one of the firms’ most aggressive battles yet, over the gold mine of the World Cup in Brazil. Nike outfitted 10 of the World Cup’s 32 teams this year, including home team Brazil; Adidas is the official sponsor of FIFA, the sport’s governing body, and its game balls are used in every match.

Nike debuted its Mercurial Superfly in a TV ad with star player Cristiano Ronaldo at a high-profile event in Madrid this spring; the shoe’s top-of-the-line version later sold for $275. But Nike’s biggest victory came from the Magista, an ultra-light soccer cleat worn by Mario Gotze on his winning goal in the World Cup final.

Dekovic, once Nike’s global football design director, was behind the designs of that star cleat, as well as flashy kicks such as the Mercurial Vapor IX and the Hypervenom. SoccerBible, a U.K.-based soccer outlet, called him “one of the most forward-thinking football boot designers in the game right now.”

By arrangement with Washington Post-Bloomberg News Service

Published in Dawn, December 14th, 2014