Illiquidx v Altana: Breach of confidence claim succeeds but directors get away

In a recent decision of the UK High Court (Illiquidx Ltd v Altana Wealth Ltd & Ors [2025] EWHC 299 (Ch)), a claim for breach of confidence has succeeded, while claims for copyright infringement and liability of two directors have failed. The case is a useful example of the post-Lifestyle Equities difficulty in attributing liability to individuals acting through corporates, and the strength of protection for confidential information in the UK. 

Background

The case concerned a ‘business
opportunity’ presented by the claimant, Illiquidx, in relation to ‘illiquid
investments’, particularly Venezuelan sovereign debt and bonds, which it saw as
an opportunity. It discussed it with the defendants, which were
all related to the main corporate defendant, Altana.
 
The initial discussions, conducted
under an NDA, ended without a fund being launched. However, a few months after
the JV ended, Altana set up its own fund focused on exploiting the same
opportunity. Illiquidx then issued proceedings for breach of the NDA, misuse of
confidential information, and copyright infringement in a set of slides
provided to Altana. Illiquidx also sued a company that provided consultancy
services to Altana (Brevent) and the two directors of Altana and Brevent as
joint tortfeasors. The proceedings were very substantial, with the trial
lasting 10 days and costs running into the millions of pounds ([2024] EWHC 2385
at [36]).

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Breach of confidence

As is almost always the case in
breach of confidence cases, the defendants complained that the claimants had
failed adequately to identify what specific information was said to be
confidential. There appears to have been some force in that criticism, with Illiquidx
having amended its pleadings three times. Fundamentally though, the
confidential information relied on was, at least primarily, the idea of a sanctions-compliant
investment fund investing in distressed Venezuelan debt – termed the “Business
Opportunity”.
 
The court found that the Business
Opportunity, and the associated planned structure, was both confidential under
common law and covered by the NDA. The court found that while much of the
information individually was in the public domain, the collation and
presentation of it was not, and therefore maintained the necessary quality of
confidence. That confidential information had then been largely misused by the
corporate defendants in setting up Altana’s own fund.
 

Copyright

Illiquidx also claimed copyright
in a set of slides, elements of which it said had been copied by Altana. The
copying was alleged to consist of two slides that had been reproduced in a presentation
created by Altana. The judge concluded that Illiquidx’s pleaded case was that
copyright subsisted in the slides as a whole, and not the slides individually.
This meant that the copying needed to be a substantial part of the whole of the
slide deck, and not of individual slides. He then concluded that the parts that
had been copied were not a substantial part of the work. He additionally
concluded that in any event Illiquidx had failed to show who had authored the
slides, and who owned them. The consolation prize for the claimant was that if
ownership and copying had been shown, the defendants’ claim to an implied
licence would have failed.
 

Joint liability

The UK Supreme Court decision in
Lifestyle Equities v Ahmed [2024] UKSC 17 was then considered as to
the liability of the individuals involved (the directors of Altana and a consultancy, Brevent).
In Lifestyle Equities, the UKSC decided that directors are not liable personally
for acts done by a company unless the director has acted wilfully or knowingly
in knowledge of the “essential facts” relating to the wrongdoing. In IP cases,
this presents a challenge; if, as in Lifestyle Equities, the defendant
has reasonable grounds to believe that the acts may constitute an infringement,
having been put on notice by a letter of claim, but it is not 100% certain that
those acts are necessarily an infringement, is he/she liable?
 
The judge in this case seemed to
adopt the fairly strict interpretation of Lifestyle Equities in finding
that, on the evidence, those directors “appear to have believed” that the
companies were complying with the NDA (even though they were not, and one of the director defendants was found to be an uncredible witness, to say the least); they were
not acting “wilfully and knowingly” and were therefore not liable.
 
Lifestyle Equities presents
a difficulty to rightsholders where the corporate entities that are infringing
a right, but those entities may be impecunious, and difficult to enforce
against. However, this case was issued long before Lifestyle Equities,
and where facts support claims against an individual joint tortfeasor are
argued, they are much more likely to be pleaded in detail and the “essential
facts” known to those defendants explored in detail at trial.

Despite the judge being highly unimpressed with the evidence of Altana’s founder and director, being satisfied that the director “took the idea“, and some evidence that he knew that at least some of the information was “proprietary” (i.e. confidential), the judge nevertheless found that he did not have the requisite knowledge to be fixed with liability. This does raise the question of in what circumstances the court would have found such knowledge. 

One further point to make is that the judge was highly critical of a letter sent by the defendants’ solicitors to a director of Illiquidx on behalf of two of the defendants. The judge found that the letter was based on a “significant lie to found a false claim to bully Ms Alabatchka and [Illiquidx].” The sending of threats for proceedings for defamation is risky business in the current regulatory climate, and potentially counterproductive.