Over the past three days the Court of Appeal has heard arguments in an appeal relating to the protection of sports data. A key issue in the appeal is whether live sports data can be protected as confidential information in the period between its creation and broadcast. The outcome will be relevant to sports event organisers, official and unofficial sports data providers, and the betting and media organisations who license sports data. Andy Danson, Toby Bond and Jacob Webster set out the according key points arising, with additional reporting by William Wortley and Harry Arnold.

The appeal has been heard by Lord Justice Lewison, Lord Justice Arnold and Lord Justice Phillips and arises out of the High Court’s decision in proceedings brought by The Racing Partnership (TRP) and Arena, the operator of a number of racecourses in the UK, against Sports Information Services (SIS) and others. SIS had been the official provider of “Raceday Data” collected from Arena racecourses until December 2016 when Arena granted TRP the exclusive right to collect and exploit Raceday Data for fixed-odds betting.

SIS continued to provide an unofficial feed of Raceday Data based on data collected at Arena racecourses by the Tote, who had been present on the racecourses for many years to provide pool betting services and had developed its own data collection infrastructure. TRP and Arena issued proceedings against SIS in early 2017 alleging breach of their IP rights, breach of confidence and that SIS had engaged in an unlawful means conspiracy with the Tote and a number of bookmakers. At first instance Mr Justice Zacaroli dismissed the IP and conspiracy claims, but found that Raceday Data was confidential in nature prior to its broadcast and that SIS had breached an obligation of confidence. Our summary and analysis of the first instance decision handed down in May 2019 is available here.

Both parties now ask the Court of Appeal to overturn aspects of the first instance decision. SIS appeals the finding that Raceday Data has the necessary quality of confidence for a breach of confidence claim (SIS Ground 1) and that Raceday Data was communicated to SIS in circumstances importing an obligation of confidence (SIS Ground 2). TRP appeals various aspects of the decision relating to the conspiracy claim, including the finding that the Arena terms & conditions of entry onto its racecourses did not apply to the Tote (TRP Ground 4). SIS Grounds 1 & 2 and TRP Ground 4 appear to us to have the most general relevance to those who deal in live sports data and are discussed further below.

SIS Ground 1: Can Raceday Data have the necessary quality of confidence?

Raceday Data is information specific to the racecourse on the day of the race, such as the weather conditions, the going, the withdrawal of any horses, changes in jockeys, the start-time, the finish-time, any stewards’ inquiry and the result. At first instance Zacaroli J held that Raceday Data was commercially valuable to off-course bookmakers for a short period of time after its creation and because Arena had the ability to, and did, control its dissemination via exclusive channels so as to exploit that value, the Raceday Data was confidential in nature. In doing so Zacaroli J applied the reasoning of the majority of the House of Lord’s in Douglas v Hello! [2007] UKHL 21 that Hello! magazine’s publication of photographs surreptitiously taken by an unauthorised photographer at a celebrity wedding was a breach of confidence because OK! magazine had been granted the exclusive right to publish photographs of the wedding and all other photography had been forbidden.

Michael Bloch QC, appearing for SIS, told the court the judge had been wrong to apply Douglas v Hello! because Raceday Data, known to potentially thousands of racegoers, could not be considered a secret, and without inherent secrecy Raceday Data could only be protected by the law of confidence if effective controls had been put in place on its use and dissemination. Mr Bloch submitted that Arena had fallen short in this regard because, while it had imposed contractual restrictions on most attendees, the Tote had been allowed to run its on-course operations and compile data without these restrictions being imposed. Mr Bloch contrasted this with the situation in Douglas where the controls put in place to ensure nobody took unauthorised photographs were thwarted by a photographer surreptitiously taking pictures while pretending to be a waiter or guest. Mr Bloch concluded that Arena had at their disposal the ability to impose contractual restrictions on those all attending their racecourses and the right to prevent trespassers, but having failed to apply these rights, it should not be open to Arena to rely on an equitable obligation of confidence to fill the gap.

In response TRP’s counsel, Ian Mill QC submitted that there was no qualitative difference between a racecourse and a private wedding and that, like the Douglases, Arena had put in place effective controls on the dissemination of Raceday Data. These controls had been thwarted by the Tote changing its role from collecting data for pool betting to compiling data to supply to SIS for the purposes of fixed-odds betting but Mr Mill argued this should not deprive TRP and Arena of the right to protect Raceday Data as confidential information. Mr Mill also referred to TRP’s appeal on Ground 4 (discussed below) that the judge should have found that the Arena terms did in fact bind the Tote and prohibit the Tote’s dissemination of Raceday Data.

If SIS were to succeed in its appeal only on the basis of this SIS Ground 1, it seems to us that such a victory may be short-lived if the Court of Appeal concludes that Raceday Data can, at least in principle be protected as confidential information. This is because sports event organisers (including potentially Arena and TRP) might argue that, going forwards, they have successfully imposed restrictions on all attendees, and therefore their live data does have the necessary quality of confidence.

SIS Ground 2: Was the Raceday Data communicated to SIS in circumstances importing an obligation of confidence?

SIS’ second ground of appeal concerns the second limb of Megarry J’s test in Coco v AN Clark (Engineers) Ltd [1969] RPC 41, requiring that the information be received in circumstances where the receiver had agreed, or ought to have appreciated, that it was confidential. Zacaroli J had found that SIS neither actually knew that, nor turned a blind eye to whether, the Tote was unable to lawfully provide Raceday Data to SIS. Notwithstanding this, he held that a reasonable person in SIS’s position would have appreciated that the Tote acquired the information in circumstances of confidence which precluded its use for fixed-odds betting.

Mr Bloch, on behalf of SIS, submitted this conclusion was wrong. SIS had taken significant care to investigate whether the Tote had the right to supply Raceday Data and had obtained clear and unequivocal assurances from the Tote that it had the right to supply Raceday Data, including contractual indemnities and warranties to this effect. Mr Bloch also submitted that the judge was wrong to conclude that a reasonable person in SIS’ position would have appreciated that it was “highly unlikely” that the Tote would have the right to provide Raceday Data and that the reasonable person would also have sought assurances from Arena itself. Mr Bloch submitted that this analysis presupposed that SIS should have known that the information collected by the Tote was confidential and required the reasonable person to possess the powers of analysis of a Chancery judge, rather than those of a party making an honest assessment of the situation in the course of business.

Mr Mill, on behalf of TRP, responded that the judge did not base those conclusions on a failure by SIS to investigate the facts, but on a reasonable person, knowing the facts that SIS knew, and what they would have concluded. Through its investigations SIS discovered that there was no contractual basis for the Tote being able to collect the data in the way which was proposed, and any right the Tote had to collect data was based in historical custom and practice arising out of its origins as a government franchise. Since SIS knew that this historical custom had never extended to the use of data for fixed-odds betting purposes, it ought to have understood (and a reasonable person in that position would have understood) that the Tote had no underlying entitlement.

TRP Ground 4: Applicability of Arena Terms

At first instance Zacaroli J concluded that the Arena Terms, which governed the conditions of entry to Arena racecourses, could not have been intended by Arena to apply to the Tote and as a result those terms did not bind the Tote. Mr Mill submitted that the correct legal analysis was that, as an attendee at the racecourse undertaking an activity prohibited by the Arena Terms, the Tote had in fact been granted an implied gratuitous licence to engage in data collection for the purposes of pool betting. However, the licence was granted for that purpose alone and, save for the licence, the Arena Terms applied to the Tote in full, thereby prohibiting the Tote from collecting or supplying data for fixed-odds betting purposes.

Mr Bloch responded that the Arena Terms cannot have applied to the Tote as they would have prohibited activities which the Tote was clearly permitted to undertake. Instead Mr Bloch referred to the contractual arrangements which were in place between Arena and the Tote. This provided the Tote with a right to be on the racecourses, and did not contain any prohibitions on the Tote’s collection or dissemination of data. Mr Bloch observed that the judge had rejected TRP’s argument that a term should be implied to this effect, and TRP’s case on implied licence was merely an attempt to re-run this failed argument in another guise.

Wider relevance to live sports data

If the Court of Appeal upholds the first judge’s breach of confidence finding at first instance (and if the case is not subsequently appealed to the Supreme Court), event organisers and official data providers will have confirmation that the law of confidence provides them with an additional legal right to clamp down on unofficial sources of live data about their events, especially in the period before the official feed is published. While terms of entry and the law of trespass provide protection against unauthorised data collection, an additional right of confidence would potentially plug gaps in this protection and allow more flexibility to clamp down directly on recipients of unofficial data in the betting and media sectors. Combined with database rights in the official data feed, the Court of Appeal upholding the decision will put event organisers and official providers in a stronger position to protect the commercial value of live data.

The impact, beyond the immediate parties to the dispute, of the Court of Appeal overturning the first instance decision on rights of confidence will depend on the reasoning the court adopts. If the decision is specific to the relationship between Arena and the Tote, as we observe in relation to SIS Ground 1 above, it is unlikely to preclude a right of confidence in live sports date arising in other circumstances. However, if the Court of Appeal concludes that the nature of live sports data is inherently public in nature and not capable of being protected by a right of confidence, unofficial data providers may have more freedom to distribute data (and the risk for betting and media businesses using unofficial data feeds may be reduced), assuming unofficial data providers can find ways to successfully navigate the restrictions on data collection imposed by terms of entry and the law of trespass.

The Court of Appeal’s finding on SIS Ground 2 will also be of interest to those licensing in data from non-official sources. A standard approach to reduce the legal risk is to seek warranties and indemnities from the data supplier confirming they have the right to supply the data. If the Court of Appeal finds against SIS on this ground, it would suggest that obtaining contractual protection may not, in itself, be sufficient to eliminate potential liability and more careful analysis of the surrounding circumstances is required in order to fully calculate the potential exposure to third party claims.

Readers sufficiently interested in this topic to have read this far may also be aware of another potential case with particular relevance in this area, in which Sportradar is reported to be bringing a competition law complaint against BetGenius and Football Dataco, arguing that it would be a breach of competition law to restrict access to sports events to only one exclusive official data provider.