Trade Secrets Can Be The 54th Man

An NFL team’s 53-man, in-season roster is developed through a rigorous process that depends on effective testing and teaching methods. At least one team, the St. Louis Rams, has acknowledged that it utilizes confidential information in connection with testing and teaching its players.

Specifically, Rams General Manager Les Snead recently explained that, “[t]he next frontier in football is understanding the mind and figuring out how you can test and teach[.]” (Kevin Clark, The NFL’s Laboratory For Millennials, September 15, 2015 Wall Street Journal, D6.) To figure out how to test and teach, or at least improve current testing and teaching methods, “[t]he Rams brought in a group of academics who run a research firm to evaluate the Rams’ football teaching methods.” (Id.)

Smartly, “[t]he Rams did not identify the firm for competitive reasons[.]” (Id.) Put another way, the identity of a source of information or analysis can be a trade secret, and the Rams apparently treat the identity of its consulting firm as a trade secret. That makes trade secrets the Rams’ 54th man, and that’s a savvy, salary cap friendly roster addition.

Interestingly, the Rams have disclosed certain details of the anonymous consulting firm’s work. The Rams have acknowledged that the consultants “observed portions of off-season training and training camp. They also put rookies through a standardized test,” with the test designed “to mirror exams like the GRE or LSAT – which are trying to gauge future performance, not how much you’ve already learned” and to gauge “some intangibles such as ‘grit, perseverance and mental toughness.’” (Id.)

The Rams’ distinct treatment of different types of information makes sense for apparent practical reasons. The identity of the firm apparently has not been disclosed to the Rams’ players (or apparently would not need to be), whereas the players are likely, if not necessarily, aware of the disclosed details noted above. Given the mobility of players in the NFL, the Rams may have determined that trying to maintain the confidentiality of at least certain information disclosed to their players simply is not practical. (I am not aware of any Rams’ players or any professional athletes in any team sport signing non-disclosure or confidentiality agreements (NDA’s or CA’s) with their respective teams. Having said that, if those players or athletes are deemed team employees according to their contracts and applicable provisions of any collective bargaining agreement, then the employer-employee relationship generally would impose confidentiality obligations even in the absence of an NDA and CA.)

Going forward, the Rams might decide to more tightly control trade secrets that are disclosed to their players. That’s the future.

What about the present? In particular, what can businesses take away from the Rams’ approach to trade secrets? As the Rams’ approach shows, it’s often not about protecting every potential trade secret asset. That’s usually impractical. It’s about (1) appreciating what your assets are, (2) appreciating which of those assets are truly valuable to your operations, (3) appreciating to whom you must disclose those assets to realize value from or a return on them, (4) evaluating whether the confidentiality of those assets can be maintained with that necessary disclosure (note: disclosure to certain people, on a need to know basis, is entirely consistent with maintaining a trade secret’s confidentiality) and (5) then taking appropriate steps to maintain the confidentiality of those assets that can be sufficiently protected. Execute that process correctly, and a business can add a valuable 54th man to its roster.