Out-Law News | 03 Nov 2020 | 4:20 pm | 5 min. read
The Court of Appeal in London has strengthened the tools available to rights holders when seeking to control and exploit commercially valuable data within sport and set out the pitfalls for third parties who seek to do the same without clear, unambiguous approval from a rights holder.
In a judgment focusing on the protection of information collation and use, important principles were set in relation to matters that go to the heart of the value rights holders seek to build from data within their business.
The appeal was brought by horseracing data provider The Racing Partnership (TRP) and Arena Racing Company, one of the predominant racecourse group owners in the UK. TRP was created by Arena and a number of other racecourses. It exists as a collective vehicle for collating and exploiting race day data from the participating racecourses. In 2017 TRP had replaced SIS, a similar business, as the supplier of data collected at racecourses to off-course and online bookmakers. Termed 'key raceday triggers', the relevant types of data included information specific to race day, for example amendments to any race, for example, jockeys and non-runners, the going of the course, time and duration of the race and the result.
TRP asserted that SIS had continued to collate and exploit data after TRP had replaced it and in doing so had breached the rights of exclusivity TRP held. SIS were alleged to have done so by scraping data from third party betting websites and separately by obtaining information via the Tote, a national pool betting entity with presence at 55 racecourses in the UK. Data provided by the Tote to SIS was done so under a contract between the two within which the Tote gave warranties and indemnities to SIS as to their ability to use the data in this way.
TPR asserted that SIS had acted in breach of confidence and also that their conduct amounted to an unlawful means conspiracy, particularly with regard to utilisation of 'key raceday triggers'. Part of the claim relied on the Tote having no right to use the information by providing it to SIS.
The Court of Appeal found that SIS did not breach any duty of confidence that might exist between it and TRP but found that it had been involved in an unlawful means conspiracy in which SIS were liable.
Lords Justice Arnold and Phillips said it was not necessary for SIS to have known that the means were unlawful in order for it to be engaged in an unlawful means conspiracy. Conduct such as using pricing information available on betting exchange websites to create prices and distribute them to bookmakers was against the terms and conditions of using the exchanges and SIS conduct was designed to harm TRP.
However, the court rejected TRP’s assertion that SIS was acting in breach of confidence by accepting and utilising 'key raceday triggers' provided to it by the Tote. In doing so the Court of Appeal relied on the contractual relationship between SIS and the Tote.
Lords Justice Lewison and Phillips said that there was no overwhelming factors that would have caused SIS to have to question whether the Tote did in fact have the ability to share the information with it; there was no awareness on SIS's part of any duty of confidence held by the Tote to TRP, even if SIS were generally aware of the nature of the information. They held that SIS was justified in relying on the contractual terms to conclude that the data it was receiving from the Tote was being provided lawfully given that the contract provided warranties to that extent. In the absence of clear alternative factors that would lead a party to conclude that the information was being unlawfully provided, SIS could assume it was lawfully provided.
Lord Justice Arnold disagreed with the two other sitting judges, arguing that the inaccessibility of the triggers – available only to the Tote and TRP – meant that this data was patently confidential and by implication SIS should have been aware of this notwithstanding the warranties given by the Tote.
As a footnote, the judgment noted that the Tote, in collating and then utilising information for a purpose it was not contractually entitled to, was in itself then trespassing as against the venue owner. It is also a moot point as to the extent to which a court would be prepared to determine what elements of the 'key raceday triggers' are in themselves confidential information that can be protected.
The determination did not consider any issue of damages which will be dealt with at a later date. It is also subject to a potential appeal to the Supreme Court.
Sports litigation expert Julian Diaz-Rainey of Pinsent Masons, the law firm behind Out-Law, said: “Event day information is a valuable asset. As the Court of Appeal judgment explained, information specific to a sports events, such as the participants and other race day data is valuable to off-course bookmakers, and this is why organisations such as TRP pay the owners of racecourses substantial sums for the exclusive right to this data."
"The case demonstrates how additional protections and remedies can be deployed by a rights holder to take action against third parties above and beyond those it has a contractual relationship with. Going forward, given every case is specific to its facts, we would strongly recommend rights holders ensuring that the confidential nature of data is established at the outset and protections built up on that foundation," he said.
Sports law expert Trevor Watkins of Pinsent Masons said the case went to the heart of how data is used within the business of sport.
“Here an organisation has sought to protect the collation and utilisation of data, it has entered into contractual relationships to exploit the same and has done so in relation to information that could only in reality be gleaned by being at the event concerned – in this instance the information on runners, riders and so on,” Watkins said.
“The basis of the finding – that there is value in such information and a related duty of confidentiality – arguably expands the basis on which rights holders can seek to protect, exploit and add significant value to their business. In doing so, third parties will need to give very careful consideration to how they exploit any such rights and where information is sourced from. There is a clear and substantial risk that notwithstanding the lack of any contractual relationship, a third party engaged in such activity will find itself liable to a rights holder if such precautionary steps are not taken,” Watkins said.
Information law expert Lauro Fava of Pinsent Masons said companies should make sure commercially important data is protected.
“As with the first judgment in this case, the judgment of the Court of Appeal highlights the legal challenges around treating data as an asset and commercialising data, since data is not subject to rights of ownership. Any party seeking to exploit data should ensure a robust contractual web and confidentiality safeguards are in place - they remain the best available means for protecting the commercial value of data,” Fava said.
05 Jul 2019