Undoubtedly, fair play is a crucial tenet in the field of sports. "For a sport to be congenial, it ought to be strictly fair," the America's Cup arbitration tribunal correctly noted in a recent judgment. Even so, it must be accepted that sport occasionally fails to be equitable and also that unfair actions really aren't entirely absent from the sporting realm given the enormous capital investment in the professional sports industry as well as the massive media exposure of major sporting events today. One kind of such unethical conduct is the illicit procurement and/or exploitation of confidential documents (know-how) belonging to competing factions in an effort to outdo them in a certain area. Formula One (F1) is one such sport which has been tormented by "copycat" incidents for the past few decades, and this problem has gotten worse with time. Organisations often intentionally take pictures of or otherwise record competing automobiles in an attempt to reverse-engineer components from some of those cars. The Fédération Internationale de l'Automobile (FIA), the governing body that oversees Formula One, implemented new, stricter rules after receiving several complaints from competitors about such conduct. The insufficient intellectual property (IP) protection provided to the racing teams' technologies is a contributing factor to the issue. As F1 boasts the use of substantial fiscal resources and some of the sharpest engineers on the planet, there's a plausible conclusion that the sport would be rife with patents. Yet, why is it that barely any of the technological innovations developed by F1 participants acquire patent protection, is what has been discussed below.

[Image Sources: Shutterstock]

Understanding How Intellectual Property Is Protected In A High Tech Sport Such As Formula One

The highest level of single-seater motor racing regulated by the FIA is Formula 1. In the realm of F1, margins are quantified in fractions of a second, millimetres, and kilos. Every lead that could potentially be obtained will thus have a significant impact on a lap, a race, or a title. Engineering teams thus are constantly striving to optimise performance by fine-tuning specific car components and taking advantage of any regulatory gap to create novel solutions that will offer their team and driver an advantage. On the surface, F1 seems to be the ideal setting for the development of novel concepts and patented technologies. It possesses state-of-the-art technology, hundreds of thousands of dollars in funding, along with some of the world's finest thinkers. Yet we have not seen a patent litigation war similar in scale to let’s say a Microsoft vs. Google patent battle. Does this mean that the sport of Formula One negates the aspect of Intellectual Property protection? The answer to this question is in the negative. It is rather straightforward to comprehend why F1 has little to no patent protection. F1 serves primarily as an entertainment sport. If patent protection is granted, the Sport would then become predictable if one team simply outperforms the others. The FIA would deem it unlawful for the remainder of the season if a team had patented an innovation and it was obvious that the innovation under consideration was what gave the team its technological edge. In essence, this renders the patent useless. Consequently, there are a variety of reasons why patents and F1 don’t gel together, which are:

● F1 Regulations: In order to make the sport exciting, the F1 community ultimately wants as many vehicles contending for the victory as feasible. As a result, regulations have been implemented to provide a competitive environment. By virtue of these rules, even the patent holder would not be permitted to utilise their patented technology in a race if it gave them unmatched advantage and the patented technology would be declared unlawful by the FIA. So, the fact that the teams are so accommodating of one another's usage of cutting-edge technology is not one of the primary reasons why there aren't more patent conflicts in the F1 scene. Contrarily, the absence of patent battles is a consequence of the fact that participants in the activity lack the ability to utilise a patent in the same sense that their parent corporations would be able to do outside of the sport in the real world.

● Reactivity to time: The amount of time necessary to secure an effective patent seems to be another issue F1 teams and their intellectual property must grapple with. Think of the Ferrari engine, for instance, which can provide more power worth a tenth of a second every lap while boosting component durability thanks to an electronically driven turbocharger. It is obvious that a product like this would offer Ferrari an edge over competitors and could be mimicked. Ferrari would require an approved patent in each country that holds an F1 race so that they can maintain their edge throughout the entire season. The patent applications might be submitted collectively through the PCT or separately in each nation. The worldwide publishing of the international application, however, "must be done immediately after the expiration of 18 months from the relevant date of such application," according to Article 21(2)(a) PCT. Similar provisions can be found in other countries' laws, such as Article 93(1)(a) of the European Patent Convention. Hence, according to the timeline indicated publication of the patent application will typically take place following the conclusion of the season. Consequently, Ferrari would not be given any patent rights to assert or even have temporary protection for the duration of the season.

● Patentability: The fact that a number of innovations are not patentable is another factor contributing to what seems to be a dearth of patent activities throughout F1. Consider the front wing of an F1 vehicle. They are viewed as engineering marvels by some and monstrosities by others. No matter how you look at it, a lot of effort and thought goes into developing the front wing. This component of the automobile is often updated by various teams after a few races. The front wing is constantly modified, however most updates are just iterations or optimizations of the last wing. Such iterations have little chance of passing the inventive step test.

Analysis of Article 39 of the Trips Agreement as a Source of Protection for Intellectual Property Rights

Organisations in Formula One typically use trade secrets to safeguard valuable creations. Although there isn't a precise definition, a trade secret is characterised as data that seems to have economic value as it remains confidential, is not commonly known or attainable to those within groups that typically deal with this same sort of knowledge, hence unique in the field and hard to acquire. The trade secret's owner must also take reasonable efforts to keep it sheltered. This criteria is laid down under Article 39 of the TRIPS Agreement. Article 39 only applies to specific third parties that have unfairly treated the owner of the trade secrets and is not binding erga omnes. Furthermore, it does not inflict on the Member States how the protection must be translated into practice, giving them the freedom to decide how such protection should be formally established. It further suggests that since the information in question is hidden, it must be valuable in the marketplace. Basically, the information has to have economic value but then that value should be attributable to the information's secrecy. This implies that a third party's employment, acquisition, or revelation of the secret knowledge must have an adverse influence on its worth. Finally, TRIPS's Art. 39 Para. 2 (c) states that the safeguarding of sensitive data may only be utilised if the data under consideration has been given reasonable efforts to maintain its secrecy by the person lawfully in command of the data. In other words, the confidentiality of information can only be protected if and to the degree that the possessor has taken appropriate steps to safeguard it.

HAS ARTICLE 39 AFFORDED ENOUGH PROTECTION TO INNOVATION IN THE FIELD OF FORMULA ONE?

Trade secret legislation offers a very weak layer of protection, despite its vast reach. To begin with, provided that the knowledge is mostly undisclosed, numerous parties might possibly employ the identical trade secret at the same time. Similarly, there's not much legal recourse available if a rival discovers a trade secret on their own. This means that the owner of a trade secret cannot prevent the independent discoverer from making use of the information. Finally, it is quite lawful to successfully reverse engineer trade secrets. So, if the trade secret owner wants to preserve the IP, it is up to them to keep it confidential. A trade secret owner's legal options are often limited to lawsuits against individuals who violated a contractual obligation (such as a nondisclosure agreement) or who acquired the trade secret through "improper means". Due to the aforementioned factors, spying incidents have frequently occurred in the F1 world. In 2007, there was the "Spygate," scandal involving McLaren, Ferrari, and Renault. Even more recently, one team said that a technician had taken technical data along with him when he left for a rival firm, although this accusation was later proven to be untrue. Professionals are known to frequently switch teams, thus even if special design data is not acquired, a transfer of ideas, or at the minimum ideologies, is going to be a consistent problem.

Ferrari vs McLaren Spy Story

The Ferrari cars had been outperforming the McLaren vehicles during the start of the 2007 Formula One Season. McLaren appeared to be more efficient than Ferrari in the spring of 2007. Subsequently, Ferrari was approached by a "copy centre" outside London on June 24, 2007. The manager of that copy shop informed Ferrari that a lady had asked them to duplicate hundreds of pages of documentation, including schematics and technical data, detailing what seemed to be Ferrari Formula One automobiles, onto a disk drive. That lady was later found out to be Trudy Coughlan, senior senior McLaren engineer, Mike Coughlan’s wife. A search was performed at their house pursuant to a court order and over 780 pages of Ferrari-owned private material were found during that search. On this particular instance, Trudy acknowledged that such information had been given to her by a crucial member of the Ferrari team.

After investigation by the FIA, they concluded that McLaren had illegally come in possession of the confidential information and had used it to gain advantage over their competitors as was seen in the latter part of the season. Hence, the WMSC issued a punishment of USD 100 million, which was unprecedented, as well as the disqualification of McLaren from the 2007 Constructors Championship. In any case, in Formula One and possibly in any kind of sport, this spy story represents without hesitation one of the most striking examples of classified material being unlawfully gathered and exploited by a rival on a large scale and in a structured manner.

CONCLUSION

Until now, it is unclear how well secured trade secrets are in the world of professional sports, and if the pertinent sports laws offer enough security in this regard. As previously said, it seems problematic to determine if trade secrets have been stolen and/or what penalties must be applied based on the probable effect on performance. This demonstrates the need for uniformly defining the game's rules in sports legislation pertaining to international sporting events in order to create a level playing environment for all competitors. This should be especially true in regard to the definition and reach of trade secret protection. From the perspective of intellectual property, actions taken by the appropriate sports agencies concerned in scenarios of trade secret theft seem to be very intriguing since they affirm the necessity of adopting and enforcing fair rules of trade secret security in the sports industries, where significant technological expenditures occur, such as the case with the Formula One championship. As this paper aims to demonstrate, the intellectual property regulations and objectives could in fact provide a valuable analytical system for deciding the kinds of activities to be secured in addition to the kinds of (unfair) traits that should be prohibited from professional sports, with particular reference to the extremely damaging instances of trade secret theft, which are likely among the most outlandish representations of blatant cheating which destroy the core principles of Sports.

Author : Yash Dawda, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.

REFERENCES

Websites

● Aguilar, Teresa. “F1: A Pit Stop in How Intellectual Property Is Protected: Article: Chambers and Partners.”, Chambers and Partners. Accessed March 5, 2023. https://chambers.com/articles/f1-a-pit-stop-in-how-intellectual-property-is-protected.

● Rogan, Jack. “Formula 1: A Driving Force behind Intellectual Property? - Patent - UK.” Venner Shipley, Mondaq (2019) https://www.mondaq.com/uk/patent/805038/formula-1-a-driving-force-behind-intellectual-property.

● Ramsey, Benjamin. “Why Formula 1 and Intellectual Property Don't Mix.” Legal Cheek (2020) Accessed March 7, 2023. https://www.legalcheek.com/lc-journal-posts/why-formula-1-and-intellectual-property-dont-mix/.

● Shwarts, Rob. “Trade Secrets in the Fast Lane – Formula One and the Importance of Trade Secret Protection.” Trade Secrets Watch, December 23, 2015. https://blogs.orrick.com/trade-secrets-watch/2015/12/23/trade-secrets-in-the-fast-lane-formula-one-and-the-importance-of-trade-secret-protection/.

● Mcbride, Peter. “Intellectual Property Rift in Formula One.” Scintilla, (2022) https://www.scintilla-ip.com/intellectual-property-rift-in-formula-one/.

● Jake Boxall, “The Biggest Incidents of F1 Cheating: Spygate, Crashgate and More,” Motorsport.com, June 10, 2021, https://www.motorsport.com/f1/news/f1-cheating-spygate-crashgate/6555686/.

● Keith Collantine, “McLaren out of '07 Championship and Fined $100m · Racefans,” RaceFans, February 18, 2020, https://www.racefans.net/2007/09/13/mclaren-ferrari-espionage-hearing-latest/.

Research Papers

● Jacques De Warra, “How to Protect Trade Secrets in High Tech Sports ? A Legal Analysis in the Light of America's Cup and Formula One Experiences”, University of Geneva (2016)

● Chandler C. Gerard-Reimer, “Race Cartels: How Constructor Collaboration Is Curbing Innovation in Formula 1”, Vanderbilt Journal of Entertainment and Technology Law, Volume 23 Issue 4 (2021)

● Peter, Henry, “Sport and Intellectual Property”, University of Geneva (2016)

● Kerri Cebula, ““We Don't Want Our Competitors to See It:” Protecting Race Car Engines as a Trade Secret”, Marquette Sports Law Review Volume 32 Issue 1 (2022)

Legislation

● Article 21(2)(a), Patent Cooperation Treaty, World Intellectual Property Organisation.

● Article 93(1)(a) of the European Patent Convention.

● Article 39, The Agreement on Trade-Related Aspects of Intellectual Property Rights. (TRIPS), World Trade Organization (WTO).