No misuse of confidential information but Court finds unlawful means conspiracy
In The Racing Partnership Limited & ors v Sports Information Services Limited  EWCA Civ 1300, the Court of Appeal delivered a lengthy decision relating to rights in raceday data. At trial, The Racing Partnership (TRP) and Arena had won only on their claim for misuse of confidential information, losing on several other claims, including that the Defendant Sports Information Services (SIS) had conspired with the other defendants to cause loss to TRP by unlawful means ("unlawful means conspiracy").
The three Court of Appeal judges were split on their decisions, but the overall position was that:
- SIS successfully overturned the finding against it for misuse of confidential information (2 judges found in SIS's favour on this, while the other (Arnold LJ) would have upheld the first instance decision).
- However, SIS was instead found liable for unlawful means conspiracy – i.e. TRP/Arena succeeded on their appeal of the first instance decision. Again, the judges were split, with two in favour of that outcome and one against.
No misuse of confidential information
The alleged confidential information was a particular type of Raceday Data, referred to as "Key Raceday Triggers" - non-runners, withdrawals, the off, when the race finished, the official outcome of the race, and whether any issue had been referred to the stewards. Once its contract with Arena had expired, SIS had begun obtaining this information from the Tote. However, the Tote was only actually permitted by Arena to obtain information from the racecourses for pool betting purposes – i.e. it was not permitted to supply that same information to SIS to use for fixed odds betting.
The Court of Appeal held the Key Raceday Triggers to be confidential to TRP / Arena: Arena had kept the Key Raceday Triggers confidential through contractual restrictions placed on anyone entering its courses. Confidentiality lay not in the fact that the information was "secret", but rather that it had a commercial value and TRP had a right to control access to it. This is an important shift in the law of misuse of confidentiality, which began with the House of Lords decision in Douglas v Hello: if information is commercially valuable (such that parties will pay for access to it – as OK! Magazine had been prepared to do for photographs of the Michael Douglas – Catherine Zeta-Jones wedding, or as SIS had previously been prepared to pay TRP for the Key Raceday Triggers) and one party can control access to that information (as TRP could), then the information will be treated as confidential.
However, the majority found that SIS could not have reasonably realised that the Tote was not free to sell it the information, i.e. SIS did not have the necessary knowledge that the information was confidential. The Tote was not under an express contractual obligation preventing it from providing that data to SIS. The Tote also believed that it was able to supply that data to SIS. SIS obtained contractual warranties from the Tote that it was free to supply it with the data, and that SIS's use of that data would not breach any third party rights. Hence, a reasonable person in SIS's position would not have realised that it was receiving the Key Raceday Triggers from the Tote in breach of confidence.
A majority of the Court of Appeal did, however, find that there was an unlawful means conspiracy.
Sports data and sports betting: competition and private law rights arguments to be aired in Sportradar dispute
The complex sports data dispute between Sportradar and Football Dataco (FDC) / Betgenius demonstrates the high stakes in sports data and sports betting services, particularly in relation to live match data. Following earlier court decisions finding that live match data may be protected by database right, the focus has now switched to competition law arguments. These arise out of the exclusive agreement between FDC and Betgenius - underpinned by the football leagues' requirements that their clubs impose regulations of entry and ticket conditions – as well as FDC's position in the sports data market.
In December 2020, an interim decision of the Competition Appeal Tribunal (the CAT) – a specialist tribunal dealing with competition law issues – drew out the range of issues that will be argued by the parties, and others brought into the dispute such as individual scouts and potentially football clubs, once the matter goes to trial. Sportradar is seeking an injunction and damages under section 47A of the Competition Act 1998 (CA 1998) based on alleged violations of competition law arising out of the agreement between FDC and Betgenius, and also abuse of a dominant position.
In their defence, FDC and Betgenius deny their agreement has an anti-competitive object or effect and rely on database rights and trade secret/confidential information protection. They have also counterclaimed based on certain private law rights against Sportradar and against certain scouts as representative defendants, including breach of confidence and related claims.
Interpretation of Trade Secrets Directive
The Trade Secrets Directive took effect across the EU on 9 June 2018, with the aim of harmonising trade secret protection across the EU. Prior to the Trade Secrets Directive, the UK had long been considered a favourable and robust jurisdiction to enforce trade secrets by way of breach of confidence actions under the common law. However, the Government decided that there were certain aspects of the Directive that required specific implementation and so the Trade Secrets (Enforcement, etc) Regulations 2018 came into force on 9 June 2018.
We are now starting to see cases interpreting the 2018 Regulations. In Celgard LLC v Shenzen Senior Technology Material  EWHC 2072 (Ch), the High Court granted an interim injunction under the 2018 Regulations restraining the Defendant Chinese company from importing certain battery separator material into the UK where its manufacture is alleged to involve misuse of the Claimant's (a US company) trade secrets. The Court of Appeal upheld the grant of the interim injunction.
A former R&D employee of the Claimant (subject to NDAs under the law of South Carolina) left to work for the Defendant (its competitor). The Claimant sought to restrain the Defendant's importation of sample material to a UK-based manufacturer of lithium ion batteries, on the basis it was likely the Defendant's material incorporated confidential manufacturing technology wrongfully disclosed by the former employee.
The Claimant argued that the importation was a breach of confidence and/or a breach of Regulation 3(1) of the 2018 Regulations. This provision provides that the acquisition, use or disclosure of a trade secret is unlawful where it constitutes a breach of confidence in confidential information. Under the 2018 Regulations, a claimant may also claim measures, procedures and remedies available for an action for breach of confidence, if these provide wider protection.
The Court granted the interim injunction following an assessment of the balance of convenience. The decision is useful for highlighting the types of evidence that will be necessary to demonstrate the existence and infringement of trade secrets. It will be necessary to await the full trial for a deeper analysis of the courts' approach to the application of the 2018 Regulations.
In Trailfinders v Travel Counsellors, Trailfinders brought proceedings against a competitor, Travel Counsellors (TCL), as well as a number of its former sales consultants who had left to join TCL, and had taken with them names, contact details and other information about Trailfinders's customers from its computer system. The IPEC held that the former staff had breached implied terms in their employment contracts and they, as well as TCL, had acted in breach of equitable obligations of confidence, and this was upheld on appeal.
The IPEC judge had considered the impact of the Trade Secrets Directive as shining an 'occasional light' on the equitable duty of confidence (though as the facts occurred in 2016, the Directive was not relevant).
The Court of Appeal agreed with the IPEC judge that if the circumstances are such as to bring it to the notice of a reasonable person in the position of the recipient of information that the information is, or may be, confidential to another, the reasonable person's response may be to make enquiries. Whether the reasonable person would make such enquiries (and the nature of those enquiries) would be context and fact-dependent. If the reasonable person would make enquiries, but the recipient does not do so, an obligation of confidentiality arises. The position may be different where the claim is for accessory liability for misuse by another person, where actual knowledge may be required.
Given the quantity of client information disclosed to TCL (eg a list of 313 contacts), this was a factor supporting the conclusion it was on notice that at least some of the information was likely to be confidential to Trailfinders.