Legal Expert Speaks on Knicks' Lawsuit Against Raptors (Exclusive)
Trade secrets at risk? Better call Paule.
Kevin C. Paule is an attorney at Tampa-based firm Hill Ward Henderson who regularly handles lawsuits between employers and former employees involving trade secrets. Such a case has taken center stage in the relatively sleepy portions of the NBA offseason, as the New York Knicks and the Madison Square Garden Company have filed a lawsuit against the Toronto Raptors and its ownership group, Maple Leaf Sports and Entertainment.
The Knicks' complaint accuses a former team employee of "funnel(ing) proprietary information" to Raptors management, whose defendants include new head coach Darko Rajaković.
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All Knicks sought answers about the case from a Knicks' perspective from Paule, who includes trade secrets in his practice focus. The St. Louis native referred to the Atlantic Division dispute as "a little unique."
"Sometimes, in a case like this, somebody takes your confidential information or they take your secret sauce or your customer list and they go across the street and they try to take business from you," Paule notes. "Here, I guess the employee has left for a competitor but they're not trying to take customers they're just trying to gain a competitive edge and use all the very sophisticated and detail-oriented stuff that the Knicks have compiled in their front office."
"So I think there are a few different reasons that somebody would file a lawsuit like this, the first one being that you want to, for lack of a better term, you want to shut it down," Paule continued. "You want to stop people from being able to use your stuff to compete against you. So I think that's the next priority here. They obviously feel that what was taken is pretty important, pretty valuable to them."
The employee in question, Ike Azotam, previously worked in the Knicks' video and analytical departments. An MSG spokesperson told SNY's Ian Begley that "play frequency reports, a prep book for the 2022-23 season, (and) video scouting files and materials" were among the items taken. MLSE has denied wrongdoing in a follow-up statement.
"The Knicks obviously feel that what they have put together in their front office was very valuable and was very proprietary and specific to them," Paule said of the accused stolen materials. "They want to prevent (Toronto) from being able to use that, sort of use what they've done to boost the Raptors front office."
Paule noted that there's athletic precedence in the Knicks' case, namely from Major League Baseball: in 2015, his hometown St. Louis Cardinals were the subject of an FBI investigation that eventually found scouting director Chris Correa guilty of accessing the scouting database of the Houston Astros. The Cardinals were eventually charged two picks in the 2017 MLB Draft (which were sent to Houston) and were also forced to pay the Astros $2 million in compensation.
Correa was charged with "multiple counts of unauthorized access of a protected computer" and sentenced to 46 months in prison and was also banned from baseball by commissioner Rob Manfred.
"Not only could this be a civil matter, but potentially, if there's some sort of hacking or unauthorized access, maybe it's something where law enforcement gets involved," Paule said. "I'm not trying to speculate but it may be a matter where separate from the lawsuits and separate from any sort of criminal issue, the National Basketball Association may decide that this is conduct prohibited by the rules governing the league, and perhaps there's some sort of punishment for the Toronto Raptors organization.
Several former behind-the-scenes employees in the NBA have questioned the legs of the Knicks' lawsuit: The Athletic writer Seth Partnow, formerly the Milwaukee Bucks' director of basketball research and analysis, facetiously claimed that the Knicks were "alleging (an) employee moving teams (of doing) what every employee moving teams does" while former Brooklyn Nets assistant coach Steve Jones Jr. (who also worked in the Memphis Grizzlies' video department) called the lawsuit "petty" while acknowledging Azotam's mistake of transferring Knicks files to his personal email account.
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Paule agreed that any punishment, from both the Association and legal sources, will come down to exactly what was taken. Some materials, he explained, could be "generic in nature." Others, however, like a scouting report, could land the Raptors in hot water.
"The alleged scouting report, that's likely something that the Knicks consider to be (confidential). It's not something that was shared with the public," Paule said. "It's something that's considered to be confidential and proprietary and likely not the type of thing that a former employee would be able to take to their new job."
Paule says the "most severe allegations" linger in the Knicks' Synergy Sports subscription, which assists in analytical data and scouting.
"We don't know exactly what the Knicks had access to on (Synergy)," Paule said. "The Knicks, obviously, wouldn't have authorized (Azotam) to use (their Synergy login) at his new employer or to allow people at his new employer to log on through their login. So depending on exactly what was taken, I think it's sometimes hard to say that that's the type of thing that people always do when they're moving from one job to another."
As a victor in several cases such as these, Paule says that the Knicks' endgame could be two-pronged: one could change the course of job transfers in the NBA in terms of protocol for moving employees, especially ones tasked with sensitive materials. Additionally, they want to make sure that any materials potentially obtained by the Raptors can't be used to an unfair advantage.
"From a civil standpoint, I think the Knicks are really hoping that the lawsuit itself sort of, in their minds, makes the Raptors act on their best behavior and stop using anything that they think would be improper," Paule said. "Perhaps that has to come in the form of a court order, requiring them to do so and requiring them to return what was taken. So that's what I say from a civil standpoint."
New York and Toronto are scheduled to do battle on the (hardwood) court four times this season, the first slated for Dec. 1 in Ontario.
Geoff Magliocchetti is on Twitter @GeoffJMags
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