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Friday, February 03, 2017
 
Trade Secrets in Professional Team Sports

Earlier this week, Major League Baseball's commissioner Rob Manfred closed the book on the professional sports industry's first known case of corporate espionage in the digital era. Back in 2015, news reports emerged that the Federal Bureau of Investigations was exploring whether one or more officials from the St. Louis Cardinals had illegally accessed -- or hacked -- a proprietary database belonging to the Houston Astros. The Cardinals' former scouting director, Christopher Correa, was ultimately identified as the perpetrator and charged for the offense. As a result, Correa is currently serving a 46-month jail sentence in federal prison. 

On Monday, Commissioner Manfred docked the St. Louis Cardinals the team's first two draft picks in the 2017 draft, and ordered the team to pay a $2 million fine. Both the draft picks and the fine will be given to the Astros as compensation for the illegal intrusion. In addition, Manfred also placed Correa on the permanently ineligible list, banning him from future employment in professional baseball for life.

The Cardinals-Astros incident highlights the emerging importance of the legal protection of proprietary information and analytics to the professional sports industry. In order to learn more about the steps that sports teams are taking to protect these types of data, I conducted a survey of the in-house legal counsel working for teams in the four major North American sports leagues this past spring, in the hopes of discovering both the types of proprietary information that teams are protecting under trade secret law, as well as the measures these teams are utilizing to safeguard their data.

The results of the survey are now available part of a new law review article, "Protecting Big Data in the Big Leagues: Trade Secrets in Professional Sports" (co-authored with my wife, Lara Grow), to be published this fall in the Washington & Lee Law Review. A working draft of the paper is now available for download. Here's the article's abstract:

The protection of trade secrets within the professional sports industry became a hot-button issue in the summer of 2015, after news reports emerged revealing that officials from Major League Baseball’s St. Louis Cardinals were under federal investigation for having illegally accessed proprietary information belonging to their league rival, the Houston Astros. Indeed, professional sports teams in the United States and Canada often possess various forms of proprietary information or processes — ranging from scouting reports and statistical analyses to dietary regimens and psychological assessment techniques — giving them a potential competitive advantage over their rivals. Unfortunately, as with the rest of the economy at-large, little empirical data exists regarding either the types of proprietary information owned by these teams, or the measures that teams are taking to protect their trade secrets.

Drawing upon freshly collected survey data, this article helps to fill this void in the literature by providing novel empirical evidence regarding the modern trade secret practices of the teams in the four major North American professional sports leagues. Based on the results of a first-of-its-kind survey conducted in the spring of 2016 of the general counsels of teams in the four major leagues, the article sheds light on both the types of information subjected to trade secret assertion by these firms, as well as the methods they are using to safeguard their data. In the process, the article examines the implications of these survey results for the professional sports industry, while also identifying potential new lines of inquiry for future trade secret research.

 Any thoughts or feedback on the article would be much appreciated!





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