The Trade Secrets Blog

Following Trade Secrets Litigation

First 18-1, and Now Jail Time for Belichick?

Someone must really be mad that the Patriots lost, because there are now rumblings that coach Bill Belichick and the NFL will come under fire relating to alleged tapes that the Patriots secretly made of a St. Louis Rams walkthrough prior to Super Bowl XXXVI. Read the story by Mike Florio of the Sporting News here.

Many of you will remember that the Patriots were huge underdogs to the Rams (nicknamed “The Greatest Show on Turf” for their explosive offense) in Super Bowl XXXVI, and pulled off the upset to begin the first of their three Super Bowl wins this decade.

What does this have to do with trade secrets, you ask? Good question.

Apparently, there is a chance that the Patriots could be liable under the 1996 Economic Espionage Act which makes theft of trade secrets a federal offense. According to ESPN, Sen. Arlen Spector of Pennsylvania has been sniffing around and has requested a meeting with NFL Commissioner Roger Goodell regarding the destruction of tapes relating to accusations by the New York Jets earlier this year that the Patriots taped their signals from the sideline during a game–a big no-no according to NFL rules. Here’s Sen. Spector’s letters to Commissioner Goodell. I’m sure they will probably discuss the Super Bowl XXXVI controversy, as well, which has exploded in the media in recent days.

So, how does something called the Economic Espionage Act potentially apply to NFL football games. Glad you asked. The Act makes it a crime punishable by fines and imprisonment to steal, take, carry away or obtain by fraud or deception any “trade secret.” It also makes the receipt or possession of trade secrets a federal crime if you know that the information has been stolen.

A “trade secret” is defined by the act as follows:

all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if –
(A) the owner thereof has taken reasonable measures to keep such information secret; and
(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public.

A pretty broad definition–perhaps broad enough to include a secret taping of another team’s walkthrough prior to a Super Bowl. After all, a secret tape of an opponents’ walkthrough could be construed as business information such as a pattern, plan, design, method, technique, process or procedure. And such information definitely derives a benefit from not being known to the opponent (that’s the whole point, right?). And if the Rams took precautions to protect their practices from the public, then it can be construed that the walkthrough is not readily ascertainable through proper means. And if Belichick and/or the Patriots received the tape and knew that it was secretly taped and against NFL rules, then potential punishment under the Act is possible.

The resolution could hinge on the testimony of an individual named Matt Walsh who is the man who apparently taped the Rams walkthrough. His testimony could be enough to land the Patriots, Belichick and the NFL in hot water, depending on who knew what and when. Sen. Spector has already reached out to Walsh.

Keep in mind that this is mainly conjecture and any prosecution depends upon whether a U.S. Attorney believes that a crime may have been committed but, in any event, it will be fascinating to watch as it unfolds, both for prurient interest and to see exactly how far the Economic Espionage Act may stretch. My only question is how a jail stint for Belichick would affect these standings. Stay tuned.

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February 6, 2008 - Posted by | Intellectual Property, trade secret theft, Trade Secrets | , , , , , , , , , ,

8 Comments »

  1. Couldn’t one make an argument that even if the patriots did make such recordings that they did not actually possess the ‘trade secret’ because all they had were signals that had no meaning? The needed to then figure out what these signals meant. Isn’t that more akin to reverse engineering a competitor’s product protected by trade secret?

    Also, the NFL rule stipulates records from places accessible by the team and staff during the game. If a team taped something like a walk through, that is NOT during the game.

    Comment by 2LPatsFan | February 14, 2008 | Reply

  2. Good point, and I think it is definitely applicable to the “sign stealing” issue, however, the real problem in that regard is that the taping of the signals is against the rules of the NFL.

    As for the tape of the walk through prior to the Super Bowl, that is more problematic because it more conveniently fits with the definition of a trade secret, namely, something that has value because it is not generally known to the public and where reasonable attempts have been made to preserve the secrecy. I’m sure that the Rams were under the impression that their walk-through was private and that no one would be taping it.

    Comment by benjohnson71 | February 15, 2008 | Reply

  3. Since the practice in question was attended and recorded/reported on by the media, there could be no expectation of privacy, as the Rams made no attempt to secure the intellectual property in question. This then makes it impossible for it to be a “trade secret”.

    Comment by Pats fan | February 20, 2008 | Reply

  4. […] Spygate Revisited I wrote earlier about the potential legal ramifications of Spygate (the New England Patriots taping of defensive signals) and what is now commonly referred to as Spygate II (the New England Patriots taping of a Rams walk-through practice prior to Super Bowl XXXVI) here. […]

    Pingback by Spygate Revisited « The Trade Secrets Blog | February 22, 2008 | Reply

  5. The question is not an “expectation of privacy” (this is not Con Law), but rather a question of whether the Rams took “reasonable” measures to ensure that the information was kept secret. The definition of “reasonable” in the face of so much media interest for something like a Super Bowl could be an interesting question. It may have been reasonable for the Rams to believe that there would not be anyone from the opposing team taping their closed practice (or connected to the opposing team), even if some media was present.

    Comment by benjohnson71 | February 22, 2008 | Reply

  6. […] Revisited Again Many of you will recall the earlier posts here and here on Spygate II – the allegations that the New England Patriots taped a walk-through […]

    Pingback by Spygate Revisited Again « The Trade Secrets Blog | April 23, 2008 | Reply

  7. So how’s that whole “taped the Rams walkthrough” going for you guys now??

    Comment by rich | May 13, 2008 | Reply

  8. […] So after all the media scrutiny and conjecture (including on this blog which you can find here, here and here), the infamous Matt Walsh finally testified before members of Congress and said that […]

    Pingback by Spygate II Over - There’s No “There” There « The Trade Secrets Blog | May 19, 2008 | Reply


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