The CH Trade Secrets Review, 2021 Year-End, Final: “There’s No Trade Secret in Baseball!” - Bellowed the Houston Astros, But No Call Made by the Court
A review of significant developments, cases, and verdicts throughout the United States in 2021 in trade secrets law
With shades of Tom Hanks’ befuddled protest in a League of Their Own, the Houston Astros bellowed that there are “no trade secrets in baseball,” when a Toronto Blue Jays player took his grievance to court because of the Astros’ infamous scandal of stealing baseball signs from opposing teams in 2017 and 2018. There has been no shortage of novel and aggressive claims by lawyers and litigants, alike, that certain proprietary information constitutes trade secrets. This one case, however, was unprecedented. Although it did not end with any court decision, it certainly piques the interests of lawyers about how a sport communication on the field of play could constitute a trade secret.
Michael Bolsinger, a relief pitcher with the Blue Jays in 2017, had a disastrous showing on August 4, 2017, in the Blue Jays’ game against the Astros. A November 2019 Athletic article detailed how the Astros electronically stole opposing teams’ pitching signs during their successful 2017 baseball season (the Astros beat the Los Angeles Dodgers in the World Series that year). That prompted the MLB to conduct an investigation which concluded that the general manager and several others with the Astros had devised and engaged in a deliberate sign-stealing scheme throughout 2017 and in early 2018.
Bolsinger filed suit in Texas for misappropriation of trade secrets in the scheme where the Astros would observe the opponent’s catcher’s hand signals to the pitcher via a center field camera and then decode them to determine the type of pitch that would be forthcoming. Somewhat ironically, the modern technology-driven detection and analysis of signals was conveyed to Astros’ batters in the most perfunctory and rudimentary means of communication, by hitting a baseball bat against a trash can. A bang usually meant that an off-speed pitch was coming; a fastball simply had silence.
According to Bolsinger, the most bangs in any single game in 2017 was during his game on Aug. 4, 2017. The Astros had four runs against Bolsinger during one inning and the Blue Jays terminated him from the roster allegedly as a result of the poor showing. He never played in the MLB again, claiming that his reputation was ruined as a result of the Astros’ successful stealing of the Blue Jays’ trade secrets.
In its Motion to Dismiss the case, the Astros raised several defenses to trade secrets theft. First, the Astros maintained that the signals were not confidential since they were in public games, viewable by properly positioned fans, albeit with binoculars, or by viewers on TV. Bolsinger responded that he and the Blue Jays employed reasonable measures under the circumstances to keep the information hidden from view. According to the pitcher, that proprietary information can be discovered by experimentation or reverse engineering does not mean that the owner is denied protection when another acquires it through unfair means. Bolsinger claimed that secrecy requires a fact-intensive investigation, inappropriate for a motion to dismiss.
Second, the Astros maintained that the signals themselves do not have “independent economic value”, much like a poker hand – there’s nothing unique about the number and suit of cards. The other analogy was to a login password, which the Astros claimed were determined to not be trade secrets. Bolsinger responded that the hand signals were not a random series of numbers, but rather a complex formula, plan, program, method, technique, process, or procedure developed for strategic purposes.
Third, the Astros protested that Bolsinger did not “own” the signals, the Blue Jays did. Bolsinger’s reply revolved around the Texas statute’s definition of a claimant in trade secrets disputes – he said that “possession” or equitable rights to enforce is enough, there is no requirement of title ownership.
Finally, the Astros challenged Bolsinger’s ability to show causation, that his career in the MLB came to an end because of the sign stealing as opposed to his own performance history or other factors. Not surprisingly, Bolsinger opposed this argument on the grounds that it is a factual inquiry that is not yet ripe before the court on the motion to dismiss.
The court never decided the issues because of a resolution between the parties. A ruling by the court would have surely raised some novel questions and analyses that lack any clear precedent. Alas, the legal community’s intellectual loss may be better for the fans who prefer the suspense in the game to come from the athletes’ play, not the legal arena outside baseball.
The views and opinions expressed in the article represent the view of the authors and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is intended to be a substitute for professional legal advice.
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