Data strategy call after copyright and algorithms ruling

Out-Law News | 05 Jul 2019 | 2:07 pm | 4 min. read

A recent ruling by the High Court in London highlights why businesses should look into developing a comprehensive data strategy, a technology law expert has said.

Lauro Fava of Pinsent Masons, the law firm behind Out-Law, was commenting after the High Court ruled that copyright does not subsist in average betting prices for horses at race meetings calculated by an algorithm. Fava said the decision highlights the difficulties of treating data as a proprietary asset.

"Although the value of data has been recognised for many years in some sectors such as the advertising, gambling and insurance sectors, businesses in all sectors are becoming increasingly aware of what data they hold and its value, and inevitably some of those businesses will be looking to commoditise that data," Fava said. "It is becoming more common to hear business managers and their advisors talk about 'data ownership', but most legal systems do not recognise a general right of ownership over data, and businesses which do not consider and appreciate the limits of their legal rights may soon find their plans to turn data into revenue being challenged."

"Copyright and database rights only provide protection in limited circumstances and, in the absence of legal ownership rights over data, we believe that processes to keep data confidential and appropriately drafted contracts are the best means available for businesses to protect their data. The first step for data-driven businesses is to put in place a comprehensive data strategy. The second is to understand what legal protections they have, and to put in place processes and contracts to safeguard their commercial interests in data," he said.

In its ruling, the High Court dismissed claims from a data supplier, The Racing Parnership (TRP), and racecourse owners that so-called 'betting shows' should be protected by copyright in a case brought against a rival provider of data to bookmakers, Sports Information Services (SIS).

Betting shows reflect the average price available for horses from bookmakers in the minutes shortly before the start of a race. They are calculated when a sample of odds offered by on-course bookmakers are fed into an algorithm to determine the average price available on those horses. The information is important to betting companies not present at the race course as it helps them to set their own odds on the horses running.

In its ruling the High Court described betting shows as "vital information" that "offer the best indication as to the likely 'starting price' for each horse in the race", which is only determined once a race has begun and on which many horseracing bets are based.

The court said that betting shows data, together with other raceday information such as the weather conditions, state of the course and changes in jockeys, has "commercial value", albeit only for "a matter of minutes".

However, in considering whether copyright subsists in the betting shows calculated, the court found parallels with the circumstances of a dispute ruled on in 1994 involving Bookmakers' Afternoon Greyhound Services (BAGS) when it claimed that copyright subsisted in forecast dividends calculated at greyhound meetings. Those claims were rejected on the basis that insufficient skill, labour and judgment were used to calculate the dividends as they were derived from a computer-programmed formula that could be used on repeat.

Mr Justice Zacaroli ruled similarly in the case of the claims that copyright subsists in the betting shows data.

"While I accept that there is some level of skill and judgment involved in the selection of the bookmakers to be included in the sample, so that copyright might subsist in a list of the bookmakers included within the sample, it does not follow that copyright subsists in the betting shows," Mr Justice Zacaroli said.

"In my judgment, the skill and judgment which goes into creating the sample is akin to the skill and judgment which went into the creation of the formula in the BAGS case. Accordingly, while copyright might subsist in a list of the names selected for inclusion in the sample, the process of arriving at each price was (in the words of [the judge] in the BAGS case) 'pure routine work', involving no sufficient skill, labour and judgment," he said.

In the case, TRP also claimed that SIS had breached its database rights by extracting or re-utilising betting shows data from a database of betting information gathered from on-course bookmakers. However, the court said SIS had not "adopted and retransmitted any part of the betting shows". It accepted SIS' arguments, which included that it had at most consulted information distributed by the Press Association (PA) on behalf of the TRP which PA generated from a selection of sample entries in the database but which the court accepted was "separate and distinct" from the database entries.

However, the court ruled that SIS was liable for a breach of confidence in the way it used the raceday data.

SIS obtained the raceday data from the Tote, but the court considered that there is "a substantial commercial value in the information, provided it is disseminated to off-course bookmakers as soon as possible" and that this meant the data had the necessary quality of confidence about it to merit protecting TRP's exclusive rights to use that data.

The court said the Tote should have known the raceday data it shared with SIS was "acquired in circumstances importing an obligation of confidence, so that it could not be used … for the purposes of fixed-odds betting" and that SIS should have been aware of the confidentiality of the information and that there had been detriment to TRP and the racecourse owners stemming from SIS' unauthorised supply of a rival data feed to bookmakers which used that confidential data.