The future of sports data: Live Data - part 1

United Kingdom

The trouble with relying on breach of confidence and unlawful means conspiracy (the case of TRP v SIS)

The previous articles in our The Future of Sports Data series focused on athletes’ data.  In this article, and the next in the series, we turn to consider the ongoing legal challenges related to live sports data.

The value of live sports data has increased substantially in recent years and is intrinsically linked with the rapid growth of the gambling industry and, in particular, remote gambling which drew in a total of £5.7bn last year.[1] As its value has risen, so too has the competition to distribute and exploit live sports data and the number of legal challenges seeking to protect the right to access and sell the data. This affects sports events organisers, distributors of sports data, and the betting and media organisations licensing the data.

Importance of contractual protections

The starting point is that event organisers will want to use appropriate contractual restrictions to protect sports data and prohibit others from exploiting such data. Event organisers and official distributors of data should in particular ensure that they:

  • have exclusive rights to exploit the data;
  • have contractual restrictions in place with all relevant parties (most obviously with the ticket paying attendees) prohibiting the commercial use of the data and unofficial data distributors (extending to all relevant data) and which are sufficiently broad to cover the range of ways that the data might be used; and
  • have separate terms and conditions for entry into stadia, racecourses or other live arena for commercial and private visitors.

What if you do not benefit from contractual protections?  

Last year’s Court of Appeal judgment in The Racing Partnership (“TRP”) & others v. Sports Information Services Ltd (“SIS”) [2020] EWCA Civ 1300 illustrates both the potential value of live sports data and the causes of action that a party might seek to engage to protect alleged rights in such data. In this case, sufficient contractual restrictions were not in place and so the Claimants resorted to bringing claims against the Defendant in, amongst other things, breach of confidence and unlawful means conspiracy for the alleged misuse of data emanating from the Claimants’ racecourses.

In a legally complex case in which the first instance High Court decision was reversed in its entirety in the Court of Appeal, the findings are likely to have wide-ranging implications to the sporting industry.

Background to the dispute

From 1 January 2017, the First Claimant, TRP, alleged that it had an exclusive arrangement with the Third Claimant, Arena Racing Corporation Ltd (“Arena”) (the owner of various racecourses in the UK), that enabled it to collate and exploit live betting and horseracing data, selling it to off-course (including online) bookmakers. The data included information relating to the courses and races, for example the weather conditions, the state of the course (the “going”), the non-running of any horses, the “off” (i.e. the start time) and the result of the race (together, the “Raceday Data”).

TRP argued that the Raceday Data were valuable to off-course bookmakers, in particular, because they enabled bookmakers to take bets right up to the start time of the race, taking account of withdrawals, and pay out winnings promptly and accurately after the race has concluded. Quick dissemination of this data it was alleged is, therefore, critical. Much of the value in the information, however, lasts only up until the start of each race.

The Defendant, Sports Information Services (“SIS”), provided an alternative, unofficial data package to off-course bookmakers for fixed-odds betting in respect of Arena’s racecourses which was sourced from: (1) a contractual arrangement with the Tote (Successor Company) Ltd (the “Tote”) (which had historic rights to collate data at the Arena racecourses and distribute them to bookmakers for pool-betting purposes); and (2) betting odds sourced from online betting exchanges (the “Exchanges”).

TRP’s claims

TRP brought a number of claims seeking to protect the alleged exclusivity and value of its data:

  • various intellectual property claims, which failed on the facts and TRP did not seek to appeal;
  • a breach of confidence claim, on the basis that TRP’s data was confidential and SIS used it without authorisation (which claim succeeded in the High Court and SIS appealed against); and
  • a claim that SIS engaged in an unlawful means conspiracy together with major bookmakers and the Tote to injure TRP in the use of the data (which claim the High Court dismissed and TRP appealed).

Breach of confidence

In order to succeed in the breach of confidence claim, TRP needed to show that: (1) the data had the necessary quality of confidence; and (2) that it was imparted in circumstances importing an obligation of confidence. An issue the Court of Appeal was required to consider was the fact that some of the elements of the Raceday Data were televised live when the races were shown (for example the “off” and both the finish and the winner can be seen in real time), calling into question whether the data could be said to have the necessary quality of confidence in the first place. In respect of the second limb, the Court had to consider the fact that the Tote had provided SIS with assurances and a contractual warranty that it was under no restrictions from TRP to provide SIS with the feed.

Unlawful means conspiracy

For SIS to be liable in unlawful means conspiracy, TRP needed to prove:

  1. a combination or agreement between two or more persons (i.e. SIS, the bookmakers and the Tote);
  2. to take unlawful action;
  3. with the intention (but not necessarily the predominant purpose) of causing damage to TRP; and
  4. with TRP suffering damage as a result.

The unlawful means that TRP advanced were SIS’s use of data from the Exchanges (in breach of the Exchanges’ terms and conditions) and the Tote’s alleged misuse of TRP’s confidential information in supplying SIS with data to be used for fixed-odds betting, as the Tote’s rights to distribute the data was held to extend to pool-betting only. The second and third elements of the claim were the focus of the Court of Appeal, which considered whether the conspirators were required to have knowledge of the unlawfulness of the relevant means and whether the unlawful actions were instrumental in causing TRP harm.

The High Court and Court of Appeal decisions

These two causes of action had not previously been used in this way to seek to protect live sports data and the case involved novel and untested legal arguments.

Between the four judges who heard the case taken together (one in the High Court and three in the Court of Appeal), every combination in outcome of the two issues was achieved: one judge found for TRP on both issues, one for SIS on both issues and the other two judges found for TRP on one issue and SIS on the other issue, but in both combinations, underlying the complex and uncertain nature of the law in question.

The Court of Appeal, overturning the decision of the High Court, held that SIS was not liable for breach of confidence and in respect of the two limbs found that:

  1. the individual elements of data could not be confidential (as some could be viewed in real time on television). However, a compilation of the data could potentially be confidential (but only to the compiler of the information); and
  2. a reasonable person in SIS’s position would not have been expected to know that there were restrictions on disseminating the data, given the warranties and assurances provided by the Tote (as the Tote was a commercially experienced and reputable company).

As for the unlawful means conspiracy claim, the Court of Appeal, again overturning the High Court judgment, found that SIS was liable. It held that:

  1. knowledge of the unlawfulness of the means is not a requirement for unlawful means conspiracy; and
  2. the unlawful obtaining of the data was instrumental in causing injury to TRP.

For a full review of the legal analysis, you can access our LawNow articles on the High Court judgment and the Court of Appeal judgment.

Following the Court of Appeal decision, other similar claims are already being brought on the same basis, for example, exclusive data distributor, Football DataCo, recently filed a claim against rival provider, Sportradar for breach of confidence and unlawful means conspiracy.

Practical implications

Breach of confidence

The judgment has clarified whether live sports data is inherently public and incapable of being protected by a right of confidence, which would provide unofficial data providers with potentially more freedom to distribute the data. For the data to be considered confidential in nature, commercial value on its own is unlikely to be enough and the restrictions placed upon third parties distributing the data is key. Although in this case the data was found not to be confidential, the analysis is fact specific and it leaves the door open for a different interpretation in future cases. The Court of Appeal’s indication that protections might be limited only to the compilation of the data may leave scope for unofficial providers to make use of individual data points in certain circumstances. 

In the Court of Appeal’s decision, it was made clear that a party can rely on assurances and contractual warranties from the supplier of the data that no third-party has any rights in the data and that there are no restrictions in disseminating the data (where it is reasonable for them to do so). This could mean that event organisers take action against the supplier of the data (as TRP initially did against the Tote in this case for breach of confidence), as they may find that they have no cause of action against the unofficial distributor.

Unlawful means conspiracy

The Court of Appeal found that the conspirators to an unlawful means conspiracy do not need to know that the means used to cause the harm are unlawful. So, SIS did not need to know that the use of data from the Exchanges would result in a breach of their terms and conditions, allowing TRP to found a claim in unlawful means conspiracy on the basis of an arrangement that it was not a party to.  Nor did SIS need to know that the Tote’s provision of information to SIS was in breach of confidence to TRP, thus allowing TRP to found a claim in unlawful means conspiracy against SIS for the Tote’s breach of confidence (and where TRP’s claim for breach of confidence against SIS was unsuccessful).

Without a knowledge requirement, the scope of unlawful means conspiracy is considerably broadened and effectively encroaches on the principle of privity of contract. It appears to provide opportunities and risks for businesses regularly in competition in a commercial context.

As the position stands, businesses should consider the following:

  • Be mindful of inadvertently breaching the terms of a contract, as it could result in a claim against the business not only by the counterparty, but by a third party. A person is only liable for inducing breach of contract if he or she acts deliberately, knowing that he or she is asking someone to break a contract: but a person can be liable for “conspiracy to cause loss by breaching a contract” without any deliberate wrongdoing or knowledge thereof.
  • There may be potential risks to businesses under contracts to which they are not a party, on the basis that another conspirator is a party whose breached caused the other party harm (as the Tote would have been if TRP had continued the action against it where SIS was held to have breached the Exchanges’ terms and conditions).
  • On the other side of the coin, it provides an opportunity to advance claims on the basis of third party contracts if a breach of the contract has caused you harm.

Conclusion

This case highlights the importance of ensuring that there are sufficient contractual restrictions in place to protect live sports data. If TRP had restrictions setting out the express parameters of the Tote’s rights to distribute the data, it would not have needed to resort to bringing other claims that have not been previously used in the context of live sports data.  However, for those without watertight contractual restrictions, this case illustrates the causes of action that might be advanced to protect rights to sports data.

SIS has filed an application for permission to appeal the finding in respect of unlawful means conspiracy to the Supreme Court, so the position may yet be subject to further change.

We note that there are also competition considerations in the context of exclusive rights to exploit the data and whether that effectively constitutes monopoly on the market. This question is being considered in the Sportradar AG v Football DataCo case by the Competition Appeal Tribunal, which we will cover in the next article in our The Future of Sports Data series.