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Are Sports Betting Companies Catching A Free Ride From Leagues?

Free riding sports betting The fear of the founders of the country was that if people were not allowed to restrict use of their processes, they would not have an incentive to continue inventing. As the Ninth Circuit Court of Appeals stated, in 1948, the doctrine of free-riding is essentially designed to prevent imitators from “reaping where one has not sown,” or “riding the coat-tails,” of someone else’s work for a personal benefit. While the doctrine of free-riding and the need to incentivize invention by preventing unauthorized use of intellectual property is an important policy objective,, not all use of data is subject to intellectual property protection. Indeed, the NBA previously made an argument in federal court that companies Motorola and STATS were free-riding on their intellectual property rights to disseminate scores from NBA games. The NBA lost. The NBA sued the technology company Motorola and data-company Sports Team Analysis and Tracking Systems (STATS) in 1996. The NBA argued Motorola’s Sport Trax pager ’s “current mode” was facilitating the distribution of data from NBA games, which the league argued constituted the tort of misappropriation. In current mode: “SportsTrax displays the following information on NBA games in progress: (i) the teams playing; (ii) score changes; (iii) the team in possession of the ball; (iv) whether the team is in the free-throw bonus; (v) the quarter of the game; and (vi) time remaining in the quarter. The information is updated every two to three minutes, with more frequent updates near the end of the first half and the end of the game. There is a lag of approximately two or three minutes between events in the game itself and when the information appears on the pager screen.” The NBA relied on a Supreme Court case from 1918 to advance the argument that Motorola and STATS were misappropriating “hot news.” Court’s use a multi-pronged test to determine whether a defendant is misappropriating the plaintiff’s intellectual property, two of the prongs of the test ask about free-riding. The first is whether the defendant’s use of information constitutes free-riding, meaning that the plaintiff put in effort into generating the information and the defendant is cutting out a part of the process and using the end result of the plaintiff’s process, depriving the plaintiff of the full benefit of their efforts in development.

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