In a decision released on 9 October 2020, the UK Court of Appeal overturned the High Court’s decision of Zacaroli J. and held that Sports Information Services (SIS) had not misused The Racing Partnership’s (TRP) confidential information, but that SIS had conspired to injure TRP by unlawful means. A major part of this case concerned whether live sports data can be protected as confidential information in the period between its creation and broadcast.
The dispute between the parties was factually complex, as the first instance decision saw Zacaroli J. determine a number of issues, including copyright and database right infringement, misuse of confidential information and tort of conspiracy to injure by unlawful means. By two non-unanimous decisions, the Court of Appeal held that while SIS had not misused TRP’s confidential information, SIS was liable for conspiracy to injure TRP (and racetrack owner Arena) by unlawful means.
In this article we will explore the confidential information element of the case.
Since 1 January 2017, TRP has had an agreement with Arena, which owns six racetracks, granting TRP the exclusive right to collect and distribute certain data. The data could be divided into two distinct streams; the first being live betting prices offered by racetrack bookmakers (Betting Shows), the second being data pertaining the individual races, including weather, start times and results (Raceday Data). This data is valuable, but is collectable by members of the public, both at Arena racetracks and on television. To prevent people from doing so, Arena restricts race attendees through its terms and conditions (displayed at its racetracks, and on its ticket purchasing contracts).
Prior to 1 January 2017, SIS had a similar agreement with Arena, to provide these data to off-course bookmakers. After 1 January 2017, SIS began sourcing the data from other parties. Betting Shows were scraped from the websites of Betdaq and Betfair (in contravention of their terms and conditions), while Raceday Data were obtained from a company called the Tote, which had approved presence on-course at Arena racetracks. However, the data provided by the Tote to SIS went beyond that which the Tote was allowed to collect. While several betting operators contracted with TRP for supply of the data, others, including Ladbrokes and Betfred (which are companies related to SIS) continued to receive data from SIS.
TRP and Arena initiated proceedings in the High Court against several parties, although SIS was the sole defendant left at trial, and at first instance TRP was successful in arguing that the use of Raceday Data by SIS between January and July 2017 constituted misuse of confidential information. SIS appealed the judge’s finding of misuse of confidential information, while TRP cross-appealed the judge’s dismissal of their claim for unlawful means conspiracy. Furthermore, it was found that Arena’s terms and conditions did not apply to the Tote, as their legacy right (established in the Racecourse Betting Act 1928) was not dependent on offer and acceptance of Arena’s terms and conditions.
The Court of Appeal’s decision
While both appeals succeeded, the decisions were not unanimous on either issue, as Arnold LJ and Phillips LJ allowed TRP’s unlawful means appeal, while Lewison LJ and Phillips LJ allowed SIS’s appeal regarding misuse of confidential information. Below, we lay out the judges’ decisions regarding misuse of confidential information.
SIS succeeded in overturning the first instance judge’s decision regarding misuse of confidential information. In their rulings, all three judges cited the well-known three-step test established in Coco v AN Clark; that the information possess the necessary quality of confidence, the circumstances import an obligation of confidence and that damage is suffered by the disclosing party. However, in applying the test the judges ended up with opposing decisions.
In the minority, Arnold LJ rejected SIS’s appeal, agreeing with the first instance judge that SIS was liable for the misuse of the pleaded confidential information (called the Key Raceday Triggers), which included non-runners, withdrawals and result. He held that the disclosure of this data met the three-stage test, as SIS should have reasonably known that the Key Raceday Triggers were confidential.
Lewison LJ disagreed, finding that the first instance judge ought first to have considered the issue as one of freedom of speech. Furthermore, he held that the circumstances did not reasonably import on SIS an obligation of confidence, as Key Raceday Triggers were broadcast on TV almost immediately. When considering why SIS did not simply source this data from TV broadcasts, Lewison LJ noted that some of the data could not be collected quickly enough from TV broadcasts, and that the court could not distinguish between possible confidentiality in individual data records and the Key Raceday Triggers as pleaded by TRP.
Lewison LJ emphasised that if two parties (being the Tote and TRP) chose to govern their relationship by contract, a reasonable person should expect that contract to dictate any prohibition regarding the distribution of that information. Where the contract failed to create such an obligation, it could then only arise in equity. As no such terms existed in the agreement between the Tote and TRP, SIS was therefore acting reasonably in concluding that no restrictions were imported on the Key Raceday Triggers provided to them by the Tote.
In agreeing with Lewison LJ, Phillips LJ found that when a reasonable person receives information from a reputable counterparty under warranty, that person is not put on notice that the information is supplied in breach of a duty of confidence, save where there are sufficient indications to the contrary. SIS had sought and obtained assurances, as well as a contractual warranty from the Tote, regarding the Tote’s ability to freely provide the pleaded information. Conversely, Arnold LJ stressed the importance of SIS’s own knowledge, both general as it pertained to the industry, and specific in its former relationship with Arena, that the Tote was not entitled to collect or provide this information.
All three Court of Appeal judges considered that a set of racing data could constitute confidential information, despite arising in public view of members of the public. As Arnold LJ pointed out, the true test of assessing confidentiality in such circumstances ought to be whether the information was inaccessible by the public for a particular timeframe (however short), thereby giving the information a commercial value. It is also of interest that Lewison LJ had a focus on the policy concern of efficiency and legal predictability in contract, and that impacted his reliance on the three-step analysis of misuse of confidential information. The area of confidential information and sport is clearly a valuable one. There is a further decision to watch out for concerning Sportradar who have brought a claim in the Competition Appeal Tribunal alleging breach of Chapters I and II of the Competition Act 1998 and Arts. 101 and 102 TFEU arising from the grant by Football DataCo to Betgenius of a long term exclusive right to collect and collate data from football stadia for supply to bookmakers who offer live or ‘in-play’ betting (e.g. which team or player will score next). So 2021 may yet see more developments in this area of sport data.