The Court of Appeal’s judgment in The Racing Partnership v Sports Information Services has moved the odds on finding confidentiality and unlawful means conspiracy in the use of third party data. The decision is particularly important for those involved in the collection, ingestion and commercialisation of any live data (ranging from sports and financial markets).
As in many data-rich industries, organisers of sports events place significant value on live data feeds. An exclusive data feed can be particularly valuable in sports for betting and the media, but protecting that data feed has proved challenging. Sports events organisers have had to rely on database rights and provisions set out in their standard T&Cs on their event websites, platforms and tickets.
In this post, we deep dive into the key issues discussed in the Court of Appeal’s judgment, in particular breach of confidence and its possible wide-spread commercial implications.
The Racing Partnership (TRP) has had the exclusive right to collect and exploit live betting and horseracing data (Raceday Data) at certain racecourses operated by Arena Racing (Arena) since 2016. TRP supplies this Raceday Data to off-course bookmakers, who in turn use it to inform the odds that they offer for fixed-odds betting.
The previous official provider of Raceday Data was Sports Information Services (SIS). Since 2016, SIS has continued to provide an unofficial feed of Raceday Data to off-course bookmakers. This was based on data collected from the racecourses for pool-betting purposes by the Tote, an ex-public body which had been collecting this data for years.
In early 2017, TRP and Arena brought proceedings against SIS, alleging breach of certain IP rights, breach of confidence, and unlawful means conspiracy with the Tote and other well-known bookmakers. The High Court dismissed most of the claims, including for unlawful means conspiracy, but importantly concluded that: (a) Raceday Data is confidential for the period before it is broadcast (i.e. before races are televised); and (b) there had been an equitable breach of confidence in that information by SIS.
The Court of Appeal has now heard appeals from both claimants and the defendant on elements of the High Court judgment. In a split decision, the Court of Appeal ultimately overturned key elements of the High Court’s decision, finding that SIS had not committed a breach of confidence but had instead engaged in an unlawful means conspiracy. Interestingly, both of those decisions turned on the state of SIS’s knowledge.
Breach of confidence
To establish breach of confidence, information must: (a) have the necessary quality of confidence; (b) be communicated in circumstances importing an obligation of confidence; and (c) be subject to an unauthorised use to the detriment of the rights holder. The Court of Appeal agreed with the High Court’s finding of fact in relation to (c), took a more restrictive approach to (a) and reached a split decision in SIS’s favour in relation to (b).
What information was confidential?
The Court of Appeal concluded that the information collected at the racecourses was confidential. As SIS was not contractually bound to Arena or TRP, any obligation of confidence must have arisen in equity.
Arnold LJ confirmed that the key attribute of confidential information in equity is not its inherent secrecy, but its inaccessibility; confidentiality is “all about the control of information”. By restricting parties at the racecourses from collecting or exploiting data through its standard T&Cs, Arena had rendered this commercially valuable information inaccessible, and therefore confidential, before it became public knowledge (as races are televised with a slight time-lag).
However, Arnold LJ emphasised that precision in defining the confidential information must be the “starting point”. Raceday Data was developed by the Tote from a series of discrete pieces of information, such as non-runners, withdrawals, precise start and finish times, results etc. (the Key Raceday Triggers). The Court of Appeal found that it was these Key Raceday Triggers, rather than the Raceday Data derived from it, that were confidential for the period before they became public knowledge.
Was SIS bound by an obligation of confidence?
The legal test is whether SIS knew, or should reasonably have appreciated, that it was bound by an obligation of confidentiality in relation to the Key Raceday Triggers. On this, the Court of Appeal was split.
In Arnold LJ’s view, the High Court was correct that SIS was bound. He held that SIS knew that: (a) the Key Raceday Triggers were commercially valuable; (b) Arena had granted TRP exclusive rights to exploit the information for fixed-odds betting; (c) the Tote had no contractual right to collect the data; and (d) the Tote had only ever done so for pool-betting purposes. Arnold LJ concluded that, in this context, the absence of a contractual prohibition could not be equated with a right to supply the information.
However, Lewison LJ, with whom Phillips LJ sided, came to the opposite conclusion. He noted pointedly that, unless there is a “contrary obligation, a person is free to communicate what he sees or hears.” Critically, SIS had investigated the Tote’s right to provide the Key Raceday Triggers and received not just assurances, but an express warranty from the Tote that it had the right to supply the data, and that doing so would not breach any third party’s rights. Lewison LJ stressed that the question is not the correct legal analysis of Tote’s position, but what a reasonable recipient should have understood, and that receiving appropriate assurances from a “reputable” and “apparently respectable” counterparty would have satisfied a reasonable party in the position of SIS that there was no obligation of confidence.
SIS’ appeal was therefore allowed by 2-1 and SIS was not bound by an obligation of confidence. However, while this may seem like a victory for SIS, it may be pyrrhic as the judgment has opened the door for the claimants to seek an injunction to stop SIS (now with knowledge) distributing the confidential information going forward.
Unlawful means conspiracy
To establish unlawful means conspiracy, there must be: (a) an agreement between two or more persons; (b) an intention to injure by the alleged conspirator; (c) unlawful acts carried out pursuant to the agreement; and (d) loss or damage caused by its unlawful acts.
The High Court had previously found that the necessary elements of a claim for the tort of conspiracy were satisfied, but dismissed TRP’s claim because neither SIS not the other conspirators knew that the unlawful means was unlawful.
After a review of the conflicting authorities, Arnold LJ, with whom Phillips LJ agreed, concluded that knowledge of the unlawfulness of the means employed is not required to find unlawful means conspiracy. Lewison LJ disagreed but was overruled by the majority. So, in this case, SIS’ lack of knowledge did not save it. TRP’s appeal was therefore allowed.
The Court of Appeal acknowledged that, prior to its public broadcast, live sports data is commercially valuable information that is capable of being protected by obligations of confidence in equity. By extension, this would likely apply to all forms of live data. Though SIS’ appeal succeeded on the facts, this finding ultimately benefits those in the business of organising or operating events which produce live data, and their respective data distributors, providing they can ensure that third parties know the information is confidential and unauthorised distribution is not permitted.
This decision offers guidance for ways in which to establish live data collected at sports events as confidential information. It also has a wider application: if any company in the business of generating or selling live data feeds can succeed (where Arena and TRP failed) to establish restrictions on all those with access to the underlying source (e.g. the attendees at a sports event or financial market participants) under contractual terms, it may also be able rely on equitable protection under the laws of confidence.
While equitable rights may be particularly helpful here, the scope and protection they afford parties will depend highly on the circumstances. Data-rich companies would do well to review their standard T&Cs to strengthen their approach to restrictions and protections associated with data feeds and confidential information.
Recipients of data feeds may also want to scrutinise the legal and technical aspects of feeds they receive (and the source of those feeds), and consider seeking comprehensive contractual commitments and assurances (e.g. in the form of indemnities and warranties) from their provider that it has the right to supply the data and that their intended data usage does not fall foul of the scope of its own or the relevant provider's licence. However, even this may not help avoid an unlawful means conspiracy.
This type of dispute has been running for many years (indeed, an interesting dispute concerning the provision of sports data to bookmakers between Sportradar and Football DataCo is ongoing in both the Competition Appeal Tribunal and High Court – see here). Watch this space for further updates on these turf wars.