From Hardwoods to Courts: The Knicks and Raptors Battle Over Trade Secrets | Kohrman Jackson & Krantz LLP
Last year, the New York Knicks initiated formal legal proceedings against the Toronto Raptors and several affiliated coaches, alleging the illicit procurement of sensitive materials. The Knicks claimed that Ikechukwu Azotam, currently serving as the head of video and assistant player development coach for the Raptors, unlawfully obtained proprietary materials during his tenure with the Knicks from 2020 to 2023. These materials reportedly included play frequency reports, a preparatory handbook for the 2022-23 season, video scouting files, and other pertinent documentation.
Allegations by the New York Knicks
The Knicks specifically accused Azotam of acquiring this information under the direction of Raptors head coach Darko Rajakovic, purportedly with the intent of aiding in the restructuring of the coaching and video operations staff within the Raptors organization. In response, the Raptors moved for the dismissal of the lawsuit in October, categorizing the allegations as baseless and characterizing it as a publicity-driven maneuver.
Raptors’ Defense
Acknowledging that Azotam utilized his previous Knicks credentials to access files, the Raptors argued that he would have had similar access using his credentials within the Raptors organization once established. Additionally, the Raptors contended that the acquired data did not encompass confidential or trade-secret information, but rather included data sourced from other NBA teams, including the Raptors’ game films, accessible to all NBA teams and the general public.
The Raptors criticized the Knicks for opting for a public platform for their lawsuit, insinuating a pursuit of attention and relief that could not be obtained through proper legal channels. This insinuation hinted at potential weaknesses in the Knicks’ claims.
Arbitration Concerns
This legal conflict has brought arbitration clauses into focus, as the Raptors assert that lawsuits among members of the same sports league are exceedingly rare due to the constitutions adopted by leagues like the NBA. These constitutions vest exclusive, full, complete, final, and binding authority in their commissioners to resolve disputes among member entities. The Knicks, however, raised concerns about NBA Commissioner Adam Silver potentially arbitrating the dispute, citing a conflict of interest with Raptors owner, Larry Tanenbaum, who influences Silver’s employment and salary.
The Knicks argued that this matter, involving an alleged theft of trade secrets by a disloyal employee, falls outside the purview of the NBA Constitution, which lacks provisions for the commissioner to arbitrate damages between teams, except in cases of tampering. They emphasized that their damages could surpass the NBA’s $10 million penalty limit and declared their intent to seek legal fees, an aspect not accounted for in the NBA Constitution.
Consistently refuting the accusations, the Raptors, during their media day, conveyed Rajakovic’s surprise and disbelief regarding the lawsuit. Rajakovic expressed confidence in his character and eagerly anticipated the resolution to unveil the truth.
Ongoing Dispute
The legal dispute between the Knicks and Raptors persists, with both parties presenting contrasting perspectives and vigorously defending their respective positions.
