Media, Sport and Entertainment: Passing the playbook
Sport is big business. Top teams are recognised on a global scale as powerful brands and can turn over hundreds of millions of pounds a year. Television contracts can be measured in the billions. Teams now rely on many assets, in addition to talent on the pitch, to bring home this financial success. These assets are increasingly intangible. Some of these are readily discernible (for example, team logos) as traditional forms of intellectual property. But as teams become more and more sophisticated and begin to operate like other big businesses, another type of right is increasingly important - that of confidential information.
By Patrick Reimer|October 17, 2007 at 09:03 PM
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Sport is big business. Top teams are recognised on a global scale as powerful brands and can turn over hundreds of millions of pounds a year. Television contracts can be measured in the billions. Teams now rely on many assets, in addition to talent on the pitch, to bring home this financial success. These assets are increasingly intangible. Some of these are readily discernible (for example, team logos) as traditional forms of intellectual property. But as teams become more and more sophisticated and begin to operate like other big businesses, another type of right is increasingly important – that of confidential information.
The protection of confidential information has recently been the subject of significant public attention in Europe and North America due to alleged misuses by competing sports teams. On the Formula One (F1) circuit, the McLaren team was recently fined $100m (£49m) over a dossier of confidential technical information about their competitor, Ferrari. The implicated McLaren crew member has also been sued by Ferrari in the High Court.
In the US, the New England Patriots – one of the most successful teams in the National Football League (NFL) – was similarly sanctioned for recording an opposing team’s play-calling signals. The NFL league commissioner fined the Patriots’ coach $500,000 (£245,000) while the team was penalised $250,000 (£122,000). Perhaps more crucially, the team also lost a first-round draft choice.
Keeping a close eye on the competition in sport is nothing new. In the US, baseball teams have been devising ingenious ways to steal play-calling signals for decades. On the F1 circuit, taking detailed photographs of opponents’ cars is common strategy. But with the increasing sums of money involved, and the cut-throat nature of both the business and competition of sport, the theft of confidential information is no longer seen as simply a minor annoyance or bad sportsmanship. In their recent pleadings in the High Court, Ferrari alleged potential losses of at least E5.5m (£3.8m). These sums equal or exceed other recent high-profile cases involving confidential information. For example, in Douglas v Hello!, the House of Lords upheld an award of damages of approximately £1m against Hello! magazine for the publication of unauthorised photos of the wedding of Michael Douglas and Catherine Zeta-Jones.
In sport, league or organisation officials often wield the powers most immediately relevant to teams. Understandably, teams often turn to these bodies first. There is also often an informal code of practice regarding what is fair play and what is not. While relying on league officials and informal agreements can be effective, given the increasing stakes at play, more traditional legal remedies could become an important option for teams to pursue. This raises the question of whether these remedies are appropriate or adequate.
One remedy is pressing for criminal sanctions for theft. However, it is unlikely that many appropriations would warrant prosecutions – information of itself is not property that can be stolen. Unless media containing the information has been taken, the offence would be difficult to make out. These practical difficulties, combined with the fact that criminal law is a blunt tool at best, make it an unlikely remedy for teams to consider.
Outside the criminal realm, teams might be able to rely on copyright to prohibit the reproduction of manuals, playbooks, drawings or other similar written materials. But the most appropriate remedy is typically a breach of confidence action against the team and/or individuals involved. To be successful a claimant would have to demonstrate that:
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