Toby Bond and Jacob Webster analyse the recent decision in The Racing Partnership Limited, Arena Leisure Limited and Arena Racing Corporation Limited v Done Brothers (Cash Betting) Limited, Sports Information Services Limited, Tote (Successor Company) Limited and others [2019] EWHC 1156 (Ch), and consider the implications of the decision for the organisers of sporting events, distributors of live sports data, and the betting operators who rely on that data, as well as the more general data implications.

Earlier this month, the High Court issued an important judgment which could have wide implications for the organisers of sporting events, distributors of live sports data, and the betting operators who rely on that data.

Historically, the organisers of sporting events and the official distributors of live data from those events have had to rely largely on a combination of database rights and the enforcement of ticket terms and conditions against data scouts to protect the value of their rights. However, in the case of The Racing Partnership Limited, Arena Leisure Limited and Arena Racing Corporation Limited v Done Brothers (Cash Betting) Limited, Sports Information Services Limited, Tote (Successor Company) Limited and others [2019] EWHC 1156 (Ch), the Court has for the first time applied the principles of breach of confidence established in Douglas v Hello! to sports events, giving event organisers a new tool to protect the value of their official rights against distributors of unofficial data.

An overview of the case

The Racing Partnership (“TRP“) was set up by Arena Racing (the owner of a number of British racecourses) and other independent British racecourses as a rights vehicle to aggregate and exclusively exploit raceday data and audio-visual coverage of races from those courses. TRP’s key target market for the licensing of those rights is UK bookmakers.

TRP obtains and distributes this data through a number of commercial arrangements. Firstly, the racecourse owners granted TRP the exclusive right to freely use and exploit raceday data (including of the going of the course, non-runners and withdrawals), the collection and distribution of which was delegated to the Press Association via a separate agreement. In addition, via a series of other arrangements with on-course bookmakers and automated betting data collectors, TRP also collected fixed odds data to create Betting Shows (the single consolidated pre-race price for a horse in a race).

Sports Information Services (“SIS“) is a producer and distributor of data and audio-visual coverage. SIS provided an alternative unofficial data package in respect of races at Arena’s courses, comprising: (i) Betting Shows drawn from other sources, namely the odds data found on odds comparison sites and online betting exchanges; and (ii) raceday data sourced through a contractual arrangement with the Tote.

TRP pursued a claim against SIS on each of the following grounds:

• Unlawful means conspiracy (not commented on in detail here);
• Infringement of copyright and database rights; and
• Breach of confidence.

TRP was successful in relation to the final ground.

Copyright

TRP argued that the Betting Shows it created were protected by copyright. In the few minutes immediately before each race the Betting Shows were provided to bookmakers and as a result appeared on odds comparison sites. TRP’s case was that SIS infringed copyright in the Betting Shows by consulting odds comparison sites in the 8-10 minutes before each race started in order to minimise differences between the TRP Betting Shows and Betting Shows which SIS had already created based on data from the odds comparison sites and online betting exchanges. The court disagreed. First the court held that consulting a copyright work in order to minimise differences between that work and another independently created work could not amount to infringement of copyright. Merely consulting the Betting Shows was not an act of infringement and adjusting SIS’s own Betting Shows so they were closer to, but not the same as, TRP’s Betting Shows was not taking a substantial part of any copyright work owned by TRP. Given the simplicity of the Betting Shows (e.g. the name of a horse in combination with odds in the form “5:2”) something was either a copy or it was not. There was no half way house; “5:1” or “10:3” could not be said to be a copy of a substantial part of “5:2”.

Second, the court expressed scepticism as to whether copyright could subsist in the Betting Shows as original literary works. The court suggested that any skill and labour which was used to select the inputs to the algorithm used to calculate the Betting Shows would only give rise to copyright in a list of the inputs. The process of generating the output once the inputs had been selected was “pure routine work”. Had it not reached the conclusion that there was no infringement the court indicated that it would have applied the decision in Bookmakers’ Afternoon Greyhound Services v Wilf Gilbert to conclude that the Betting Shows were not original literary works capable of protection by copyright.

Database right

The court’s decision on sui generis database right followed from its decision in relation to infringement of copyright. As SIS had not copied, adopted or retransmitted the Betting Shows in any way, it could not have extracted or re-utilised the contents of any protected database owned by TRP in a manner which infringed a database right owned by TRP.

Breach of confidence

Whilst Mr Justice Zacaroli found that the direct claims against SIS for infringement of the claimants’ copyright and database rights failed, as well as a claim in conspiracy, he did find for TRP in respect of the claim for breach of confidence for the misuse of the Racing Data, in doing so drawing some interesting parallels with the important case of Douglas v Hello! Ltd (No.3) [2008] 1 AC 1.

Applying the elements required for a claim in breach of confidence formulated in Coco v AN Clark (Engineers) Ltd [1969] Mr Justice Zacaroli held as follows:

(i) The information must have the necessary quality of confidence

In Douglas v Hello!, OK! magazine entered into a contract with Michael Douglas and Catherine Zeta-Jones for the exclusive right to publish photographs of their wedding, in return for a fee of $1m. Pursuant to the agreement, they agreed to use their best efforts to ensure that no-one else would take any photographs. A freelance photographer gained access to the wedding, took photographs and sold them to Hello! magazine. A small House of Lords majority found Hello! to be in breach of confidence.

In reaching this decision the House of Lords placed particular emphasis on the commercial value of the information. The length of time before the information would likely enter the public domain was of secondary importance to the fact that the couple had arranged their wedding so as to impose that obligation of confidence over something which was clearly worth paying for. Mr Justice Zacaroli considered this analogous to the protection of the raceday data by Arena, which imposed restrictions (through its widely incorporated terms and conditions of entry to the courses) on how the information and data arising from its racecourses could be seen and by whom, i.e. protecting monetisation by the owners of the data.

(ii) It must have been imparted in circumstances importing an obligation of confidence

Considering whether the circumstances in which the data was imparted constituted an obligation of confidence (an objective test), the court found that a reasonable person in the Tote’s position would have appreciated it was permitted to use the data only for the purposes of pool betting, and therefore the use of the data outside these specifically defined circumstances (here, providing the data for off-course use in fixed-odds betting) constituted a breach of confidence. This was particularly emphasised in that the Tote was evidently aware of the commercial value in the data which TRP sought to exploit.

It was further held that SIS knew (or should have known) of the confidentiality attaching to the information, notwithstanding it had sought and obtained assurances from the Tote that it was permitted to provide SIS with raceday data.

(iii) There must be an unauthorised use by the confidant to the detriment of the rights holder

The Tote had breached the obligation of confidence in two ways: first, by providing to SIS the information that the Tote was allowed to collect (i.e. that needed for the purposes of pool betting) and, second, by collecting and providing to SIS additional information (which it did not otherwise need, or collect, for the purposes of pool betting), which were then subsequently used by SIS for a totally separate purpose in any case i.e. fixed-odds betting.

Some conclusions and considerations for the betting and sport industries

This case emphasises the importance of instantaneous data and how it is protected and exploited. The sport and betting industries have become ever more closely intertwined in recent history with the availability and provision of instantaneous data for bookmakers becoming increasingly valuable. Whilst the average spectator watching at home may think that the television pictures they are viewing are instantaneous, these pictures are typically delayed by several seconds, and in any event do not normally capture the full range of time critical data that occurs before and during a sporting event.

The case demonstrates the willingness of the court to recognise the inherent value of such live sports betting data, and protect it. Here, the value of the Arena data was evident from the fact that TRP was willing to pay substantial sums for the exclusive right to disseminate the data for the purposes of fixed-odds betting. Where the court recognises that significant effort has been put into protecting that paid-for right and the value of that data, it is willing to plug any gap left and ensure that the value of the data is maintained. Contrary to the more traditional confidentiality cases involving the dissemination of data in the form of photographs of a certain event (as in Douglas), this case covers such  application to a context in which the data itself is constantly changing and developing on a more regular basis; nonetheless, the court was still willing protect that data.

What this case illustrates is that, by carefully controlling the conditions on which attendees at sports events are able to gain entry, sports organisers can create for themselves a right to protect the dissemination of unofficial data from within the stadium, course, track or court, which can then be more effective than hit-and-miss efforts to disrupt the activity of unofficial data scouts attending those events.

Wider data-focused advice to bear in mind

As data becomes an ever wider avenue for commercialisation, it is important for all players in the sporting, betting and media industries to remember the importance of the law of confidence, and exercise caution. Here, SIS apparently took the Tote at face value to a certain extent in respect of its right to disseminate raceday data, but this right existed only in relation to pool betting – the warranties and indemnity given by the Tote to SIS in the Heads of Terms were not sufficient to protect SIS’s commercial interests.

It is also worthy of note that the court found that consulting data is not necessarily the same as exploiting that data by extracting it and utilising it for a separate purpose or gain. To this end, companies are able to utilise this data to a certain extent. However, the line between consulting and exploiting in the context of copyright and database rights is a wider one than exists in relation to the law of confidence, and, as we have seen, the court has now demonstrated that it is willing to step in to protect event organisers in this latter scenario.