Summary
While everyone focuses on the action on the field, the data that makes this action possible is often overlooked. As this data becomes more valuable, it has also become more vulnerable. From Formula 1’s infamous ‘Spygate’ to Houston Astro’s internal database being hacked, recent scandals show just how easy it is to steal this information, and how hard it is to hold anyone accountable. Laws like the DTSA and EEA are supposed to protect against this, but they’re often sidestepped or too complex to enforce effectively. With personnel constantly on the move, vague legal standards, and no clear way to prove when stolen data is being used, teams are left unprotected. This article explores these challenges and suggests real-world solutions: stronger rules designed specifically for sports, smarter enforcement that doesn’t rely on catching every detail, and tech upgrades like encryption and blockchain to keep valuable data safe.
Introduction
A team’s success is often hidden in its data, so protecting that data is as crucial as guarding the goal line. Trade secrets are in essence a competitive advantage of any business, manifested in many forms such as recipes, business practices, technology, and so on. As long as this secrecy is maintained, the commercial value of the trade secret and consequently the value of the business remains intact. A three-pronged test as per Article 39.2 of TRIPS is the main criteria for determining trade secret protection. Firstly, the information must not be common knowledge within the industry, second, the information must have commercial value due to this secrecy, and finally, the person lawfully in control must have taken reasonable steps to maintain its secrecy. Another key element for protection of trade secrets is that any unauthorised disclosure should be ‘in a manner contrary to honest commercial practices’.
Sports organisations today extensively rely on proprietary data and procedures that provide considerable benefits, ranging from individual performance measurements to creative game strategies. When protected, these secrets offer a strategic advantage. When stolen or leaked, they can level the playing field in unintended and unfair ways. The modern sports landscape is thus grappling with a new challenge: how to effectively safeguard proprietary knowledge in an era of technological sophistication and fierce competition
The Rise of the “Invisible Game”
Trade secrets have long existed in sports, though they may not have always been recognized as such. The data revolution has taken this to a new level, as today, teams rely on high-tech tools: wearable sensors to track athlete fatigue and player performance, machine learning algorithms to predict opponent strategies and develop scouting reports, and even biometric data to personalize injury prevention plans. These can affect negotiations for player acquisitions and salary structures. Leaking this data can undermine a team’s leverage and skew the market.
For instance, Formula 1 racing teams use real-time analytics to monitor car performance and driver behaviour, while football clubs such as Manchester United leverage AI to create customized fan engagement strategies. In such a data-driven environment, safeguarding this information is critical not only to win games but also to protect investments, brand value, and market competitiveness.
When Trade Secrets Are Stolen: Real-World Examples
Several high-profile incidents have exposed the vulnerability of trade secrets in sports. One of the most prominent is the 2007 “Spygate” scandal in Formula 1, where McLaren was found in possession of a 780-page dossier of Ferrari’s confidential technical data. Although the advantage gained was difficult to quantify, McLaren was fined $100 million and disqualified from the Constructors’ Championship. Article 12.2.1.c of the 2025 International Sporting Code (previously article 151(c) of the FIA international sporting code) makes any act which is prejudicial to the interests of the competition a breach of the rules of the sporting code. The ‘Spygate’ scandal fell under this due to ‘some degree of sporting advantage being obtained’ from possessing this information. What made this case alarming was the revelation that such information exchange might not be isolated. It was argued that other teams, such as Renault, had also engaged in similar practices without facing the same level of scrutiny or penalty due to the lack of impact on the championship even though Renault admitted to the breach.
This outcome appears to conflict with the expansive reading of Article 12.2.1.c and article 1.3.3 of the 2025 International Sporting Code, which classifies violations as any fraudulent conduct detrimental to motorsport, suggesting that proving a competitive advantage should not be a prerequisite for establishing a violation. This clearly displays the lack of effective enforcement of trade secret protection due to lack of consistency in applying the penalties.
Another compelling example comes from Major League Baseball. Christopher Correa, a former employee of the St. Louis Cardinals, hacked into the Houston Astros’ internal database to access proprietary scouting reports and player evaluation models. Although clearly an act of theft, Correa was prosecuted under general computer fraud laws rather than the Economic Espionage Act (EEA), a United States specific statute, which requires proving “mens rea” (a guilty mind) for a violation. While The EEA clearly provides stronger deterrence through criminal penalties, the prosecution often relies of civil remedies due to the burden of proving mens rea, which allows for employees to escape through loopholes.
Another such statute of the United States, the Defend Trade Secrets Act (DTSA), once again falls short in effectively protecting trade secrets in the sports industry. Disputes like Knicks v. Maple Leaf Sports are often diverted to private league arbitration, bypassing DTSA enforcement altogether. The Act’s reliance on victims to prove “reasonable steps” and the absence of strong, consistent penalties further limit its deterrent effect. Even though the DTSA allows for strong remedies, including double damages and attorney’s fees, its enforcement becomes meaningless if sports leagues can contractually bypass the courts.
Challenges in Safeguarding Secrets
This poor protection of trade secrets in sports is amplified through the mobility of personnel. Coaches, analysts, and players often switch teams, raising the risk of confidential information being transferred, even inadvertently. While non-disclosure agreements can help, enforcing them across jurisdictions or sports bodies is tricky, especially in cases where information is not formally documented but retained mentally.
Moreover, not all sports bodies treat trade secret theft with the same level of seriousness. The inconsistent enforcement of rules, as seen in the different outcomes of the McLaren and Renault investigations, can send mixed messages about the value of confidentiality. If teams perceive that the benefits of espionage outweigh the risks, the incentive to protect or respect trade secrets weakens.
Another problem lies in proving theft. Unlike physical goods, which can be physically traced, the misappropriation of information is subtle and often invisible. Teams may benefit from stolen data without clear evidence linking the gains to specific acts of theft. This evidentiary gap complicates enforcement and eventually leads to a lack of trust in the framework protecting trade secrets undermining deterrence.
Improving Protection for Sports Trade Secrets
Going forward, a multi-pronged strategy, combining legal, technical, and regulatory measures, is essential.
First, preventive measures should include sport-specific regulations in collaboration with governing bodies and international standards. These must provide a clear definition of “trade secrets in sports,” distinguishing them from general knowledge. Proprietary data such as biomechanics or strategy algorithms should be protected through expert verification panels and strict internal safeguards on data access and cybersecurity.
Second, remedial steps must improve enforcement. Given the difficulty in proving actual misuse, governing bodies should consider presuming that unauthorized possession of proprietary data indicates likely misuse, subject to a rebuttal by the accused. Data auditing tools can monitor access and changes to sensitive information, enhancing accountability. Violations should invite proportionate penalties like fines, suspensions, or contractual termination based on the severity of the breach.
Lastly, sports teams must adopt best practices like robust non-disclosure agreements, controlled company device usage, and exit protocols. Technological safeguards such as cybersecurity measures like encryption, access restriction and real time data monitoring, can further protect data. An important option can be implementing blockchain technology to build impenetrable data ledgers. Teams should restrict access to senior officials and report breaches to a centralized authority through regular audits. Furthermore, the creation of specialized dispute resolution mechanisms can offer faster and more confidential resolutions for trade secret disputes.
Conclusion – Game On!
Trade secret protection in sports is no longer a luxury; it is a necessity. As competition grows and the reliance on data deepens, the risks of unauthorized access and misuse will only increase. Teams must not only shield their own innovations but also push for a regulatory environment that upholds fairness, transparency, and accountability.
While sports teams have made attempts at protecting proprietary information through NDAs, confidentiality clauses and internal security practices, the lacklustre international and domestic frameworks often let them down. The recent theft of trade secrets with no real penalty, promotes the idea that getting away with trade secret theft is easier than one might think.
To safeguard proprietary strategies, performance metrics, and innovative techniques, sports leagues and regulatory bodies should establish rules tailored to the unique challenges of trade secrets in the sporting context. Strengthening enforcement through mechanisms like introducing a rebuttable presumption of misuse upon unauthorized possession, applying uniform penalties for breaches, and deploying advanced security technologies can provide a more effective deterrent against the theft of trade secrets and ensure fair competition.
Krish Bihani is a final year BBA LLB student at OP Jindal Global Law School who focuses on sports and corporate law and has recently concluded internships with Shardul Amarchand Mangaldas and Co, Trilegal and IndusLaw with their General Corporate teams.
