Football Scouting Organization Files Suit for Copyright Infringement and Trade Secret Misappropriation Over Leaked Scouting Reports

National Football Scouting, Inc. (NFS) recently filed a complaint (pdf) in the Western District of Washington, Tacoma, for copyright infringement and misappropriation and dissemination of trade secrets against The Sports Xchange, Inc., (TSX) and Rob Rang, one of TSX’s employees.

The parties.  NFS is a scouting organization owned by nineteen National Football League clubs.  NFS prepares scouting reports for the clubs that own its shares.  The scouting reports “are proprietary and copyrighted trade secrets that belong exclusively to NFS.”  (Complaint pdf page 2).  NFS’s principal place of business is in Indianapolis, Indiana.

TSX is a corporation that publishes football scouting information and does business as NFLDraftScout.com.  TSX’s principal place of business is Sacramento, California.

Rob Rang is a sportswriter and employee of TSX.  He lives in Gig Harbor, Washington.

The alleged facts.  NFS institutes a number of measures to protect its trade secrets, including requiring the clubs that own shares to enter into written agreements acknowledging that the scouting reports are proprietary information and trade secrets belonging to NFS; prohibiting the shareholder clubs from disseminating the information to anyone other than employees who need access to it to do their work; posting terms of use on its website that come up after log on; requiring agreement to a confidentiality provision before a shareholder employee can download content; and requiring its own employees and technology vendor employees to sign confidentiality agreements.  “NFS takes every reasonable step to maintain and keep the Scouting Information confidential.”  (Complaint pdf page 4).  See my blog post entitled Not All Organizational Secrets are Trade Secrets for a more complete discussion of trade secrets. 

The information contained in the scouting reports is obtained by scouts who travel to college campuses throughout the country, then organized, evaluated and analyzed by NFS.  This is done at great expense to the shareholder clubs.  The scouting reports prepared by NFS give the shareholder clubs a competitive advantage over non-member clubs.

NFS registered its scouting reports with the Copyright Office as unpublished works.  This allowed NFS to register the works without disclosing their contents to the Copyright Office and without disclosing NFS’s proprietary information.  17 U.S.C. §408 and 37 C.F.R. §202.20 address registering unpublished works.

Even though NFS makes substantial efforts to protect its trade secrets, TSX and Rang have repeatedly obtained and published information in NFS’ scouting reports through cbssports.com.  TSX and Rang have received compensation for knowingly and willfully disseminating NFS’s trade secrets.  NFS has informed TSX and Rang that the scouting reports are confidential and proprietary, has demanded that TSX and Rang cease and desist from disclosing NFS’s scouting reports in publications and has demanded that TSX and Rang remove the offending material and return any copies of the materials to NFS.  TSX and Rang have not complied with NFS’s demands.  TSX and Rang continued to publish NFS’s scouting information on such college football players as Prince Amukamara, Dontay Moch, Jake Locker, Christian Ponder, Nick Foles, Juron Criner, Chris Owusu and Terrell Pryor. 

Trade secret count.  NFS alleged that “Defendants’ continued knowing publication of NFS’s trade secrets constitutes deliberate, intentional, and outrageous conduct, warranting an award of exemplary damages.”  (Complaint pdf page 9).  NFS alleged that, based on TSX’s and Rang’s past conduct, they will continue to unlawfully disseminate NFS’s trade secrets and that NFS has been irreparably harmed.

NFS requested a temporary and a permanent injunction,

  • Ordering the defendants to cease and desist publication or dissemination of NFS’s scouting information;
  • Ordering the defendants to remove the content from the Internet, weblogs and other media;
  • Ordering the defendants to return any copies of NFS’s materials;
  • Ordering the defendants to preserve all electronic data in their control, so that NFS can have computer forensics technicians remove NFS’s trade secrets found in it;
  • Order the defendants to allow NFS to inspect defendant’s email accounts so that NFS can investigate defendants’ sources of NFS’s information; and
  • Enjoin the defendants from engaging in such conduct in the future.

Trade secrets are protected by state law, not federal law.  Kewanee Oil Co. v. Bicron.  Washington State adopted the Uniform Trade Secrets Act, codified under Chapter 19.108.

Copyright count.  NFS alleged that the scouting reports prepared by it are original works that are owned by NFS.  NFS alleged that the defendants published portions of NFS’s scouting reports, without authorization, and in violation of the Copyright Act.  NFS alleged that the defendants deliberately and willfully infringed its copyrights in the scouting reports. 

NFS requested the court to require defendants to disgorge all of their profits from the infringements and award actual damages or statutory damages up to $150,000 for each copyright infringed.

This case is National Football Scouting, Inc., v. Rob Rang and The Sports Xchange, Inc., Case No. 11-05762-RBL, Western District of Washington, Tacoma.

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