Trade Secrets - Illiquidx Ltd v Altana Wealth Ltd.
Chancery Division (Mr Justice Rajah) Illiquidx Ltd v Altana Wealth Ltd and others [2025] EWHC 299 (Ch) (13 Feb 2025)
This was a claim for breach of contract and confidence and trade secrets and copyright infringement,
The Parties
The claimant was Illiquidx Ltd, ("IX") a company that describes itself as "an innovative independent
financial services boutique specialised in illiquid markets, which caters to institutional, professional and high net worth investors." Its activities focus on sales, trading and advice, One of the markets in which it claims expertise is the sovereign debt of Venezuela, a country that has laboured under international sanctions for many years and has recently defaulted on its debt.
The first and second defendants are Altana Wealth Ltd ("Altana") and Lee Robinson ("Mr Robinson") Altana's founder, controlling shareholder and chief investment officer. According to its website, Altana seeks unique and innovative investment strategies with a low correlation to broader public markets where it has a competitive edge typically due to superior information analysis or style of investment.
IX also sued Brevent Advisory Ltd ("Brevent"), which provided consultancy services to Altana and its sole director and shareholder, Steffen Kastner ("Mr Kastner").
The Joint Venture
IX, Altana and Brevent entered a joint venture to invest in Venezuela's distressed debt through a special fund. Their respective directors signed a letter setting out the terms of their joint venture on 28 June 2019, and a non-disclosure agreement on 8 July 2019.
The Alleged Breach
The parties never launched their fund and the joint venture came to an end by the end of November 2019. Altana and Brevent decided to set up their own fund to trade in Venezuelan debt. IX accused Altana, Brevent and their directors of breaching the terms of their non-disclosure agreement. It also alleged that Altana and Brevent had used a presentation that infringed IX's copyright.
The Trial
IX issued proceedings on 27 July 2020. The action was tried by Mr Justice Rajah between 8 - 11, 14 - 16 and 22 - 23 Oct 2024, He handed down judgment in Illiquidx Ltd v Altana Wealth Ltd and others [2025] EWHC 299 (Ch) on 13 Feb 2025. By para [131] of the judgment, his lordship held that Altana and Brevent had breached the non-disclosure agreement and misused IX's confidential information and trade secrets.
The Confidential Information
IX alleged that it presented the defendants with a package of information called "the Business Opportunity" in confidence disclosing that there were distressed Venezuelan credit opportunities which the market “had ignored and/or avoided and/or undervalued” because of international sanctions but that such credit opportunities could be monetized and exploited notwithstanding sanctions through IX’s investment strategy. The defendants denied that IX had identified the Business Opportunity with sufficient specificity in its statement of case and contended that the information was not secret because IX had already published it to potential investors.
Breach of Confidence
Mr Justice Rajah said that Mr Justice Hildyard had comprehensively reviewed the legal principles governing the duty of confidence between paras [120] and [142] of his judgment in CF Partners (UK) LLP v Barclays Bank Plc and another [2014] EWHC 3049 (Ch):
“[120] Even in the absence of a contractual relationship and stipulation, and in the absence too of an initial confidential relationship, the law imposes a 'duty of confidence' whenever a person receives information he knows or ought to know is fairly and reasonably to be regarded as confidential: see per Lord Nicholls (dissenting on the result, but not on this issue) in Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457, [2004] 2 WLR 1232, [2004] UKHRR 648, 16 BHRC 500, [2004] 2 All ER 995, [2004] HRLR 24, [2004] AC 457, [2004] EMLR 15.
[121] The subject matter must be 'information', and that information must be clear and identifiable: see Amway Corp v Eurway International Ltd (1974) RPC 82 at 86-87.
[122] To warrant equitable protection, the information must have the 'necessary quality of confidence about it': per Lord Greene MR in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 at 215.
[1230 Confidentiality does not attach to trivial or useless information: but the measure is not its commercial value; it is whether the preservation of its confidentiality is of substantial concern to the claimant, and the threshold in this regard is not a high one: Force India Formula One Team Limited [2012] RPC 29 at [223] in Arnold J’s judgment at first instance.
[124] The basic attribute or quality which must be shown to attach to the information for it to be treated as confidential is inaccessibility: the information cannot be treated as confidential if it is common knowledge or generally accessible and in the public domain. Whether the information is so generally accessible is a question of degree depending on the particular case. It is not necessary for a claimant to show that no one else knew of or had access to the information.
[125] A special collation and presentation of information, the individual components of which are not of themselves or individually confidential, may have the quality of confidence: for example, a customer list may be composed of particular names all of which are publicly available, but the list will nevertheless be confidential. In the Saltman case (supra) Lord Greene MR said:
'…it is perfectly possible to have a confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker on materials which may be available for the use of anybody; but what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process.'
Or as it is put in Gurry on Breach of Confidence (2nd ed., 2012) para 5.16:
'Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the skill and ingenuity of the human brain. Novelty depends on the thing itself, and not upon the quality of its constituent parts. Indeed, often the more striking the novelty, the more commonplace its components…'
…
[127] The parties may by contract agree and identify specified information that is, or is as between the parties to be treated as, confidential, or protected under the terms of their agreement; or they may simply agree that information may not be used whether or not otherwise it would have the quality of confidentiality.
…
[130] Contractual obligations and equitable duties may co-exist: the one does not necessarily trump, exclude or extinguish the other: see Robb v Green [1895] 2 QB 315 and Nichrotherm Electrical Company Ltd and others v Percy [1957] RPC 207 (both in the Court of Appeal).
[131] However, where the parties have specified the information to be treated as confidential and/or the extent and duration of the obligations in respect of it, the court will not ordinarily superimpose additional or more extensive equitable obligations: and see per Sales J in Vercoe and Pratt v Rutland Fund Management Ltd [2010] EWHC 424 (Ch), who found in that case that the duty of confidence was confirmed and defined by the contract, and observed (at [329]):
'Where parties to a contract have negotiated and agreed the terms governing how confidential information may be used, their respective rights and obligations are then governed by the contract and in the ordinary case there is no wider set of obligations imposed by the general law of confidence: see e.g. Coco v Clark at 419.'
…
[138] To found a claim, whether in law or equity, actual misuse adverse to the claimant of information which still retains the quality of confidentiality must be established or inferred. For example, where a defendant had knowledge of a rival bid, through a relationship and information which could have been confidential, it was not sufficient, without more, to show that the defendant was 'galvanised' by that knowledge into acting more speedily to use information that had not the quality of confidentiality, where by the time of that use the claimant’s rival bid was public knowledge, and was not shown to have been adversely affected by the defendant’s use of that knowledge: see Arklow Investments Ltd and Another v Maclean and Others [2000] 1 WLR 594, [1999] UKPC 51.
[139] Similarly, as it seems to me, the fact that the recipient’s perspective is changed by the confidential information he receives is not enough to constitute misuse, unless and until that change in perspective causes him actually to use that information otherwise than for the purposes for which it was provided to him.
[140] Nevertheless, subconscious misuse will suffice: deliberate misuse does not have to be shown. But the confidant must have acquired the confidential information in circumstances where he has notice or is held to have agreed that the information is confidential: and see Attorney-General v Observer Ltd and Others (Spycatcher) [1990] 1 AC 109 at 281B per Lord Goff of Chieveley.”
The Non-Disclosure Agreement
This was in the form of a letter from Altana to IX signed by the directors of IX, Altana and Brevent. Mr Justice Rajah set out its provisions between para [71] and [80] of his judgment. He said that the Court's task in interpreting the agreement was to ascertain the meaning of the language. He referred to para [20] of Lord Justice Leggatt's judgment in Minera Las Bambas SA and another v Glencore Queensland Limited and others [2019] EWCA Civ 972, [2019] STC 1642 at para [69]:
“The principles of English law which the court must apply in interpreting the relevant contractual provisions are not in dispute. They have most recently been summarised by the Supreme Court in Wood v Capita Insurance Services Ltd [2017] UKSC 24; [2017] AC 1173 at paras 10-14. In short, the court's task is to ascertain the objective meaning of the relevant contractual language. This requires the court to consider the ordinary meaning of the words used, in the context of the contract as a whole and any relevant factual background. Where there are rival interpretations, the court should also consider their commercial consequences and which interpretation is more consistent with business common sense. The relative weight to be given to these various factors depends on the circumstances. As a general rule, it may be appropriate to place more emphasis on textual analysis when interpreting a detailed and professionally drafted contract such as we are concerned with in this case, and to pay more regard to context where the contract is brief, informal and drafted without skilled professional assistance. But even in the case of a detailed and professionally drafted contract, the parties may not for a variety of reasons achieve a clear and coherent text and considerations of context and commercial common sense may assume more importance.”
Public Domain
The judge considered the defendants' contention that the Business Opportunity and the detailed information forming part of it ("the Detail") were in the public domain. He accepted that that much of the Detail could be obtained from public sources which were generally accessible. Some of that information was published by IX on its website which was generally accessible. Other information was published by IX in its newsletters which were sent to about 500 or so persons who had signed up for it. There was no selection of who received newsletters and they were not confidential. Anyone could have signed up for future newsletters but there was no evidence that those newsletters were accessible to anyone beyond the investors who had signed up for them.
It was well known that Venezuela had defaulted on its debt. Specialist investors knew that such debt could still be traded notwithstanding such default and international sanctions. However, IX's investment strategy as disclosed in the Business Opportunity was not widely known. As there was only one fund that invested in Venezuelan debt other than the funds of the parties, the learned judge concluded that very few people knew that setting up a sanction compliant fund to trade in such securities was even possible. The defendants pointed to articles by David Schneider entitled “Venezuela – an Investment Opportunity of a Lifetime” and Clifford Chance entitled "Venezuela - Navigating the Storm" but they did not disclose the Business Opportunity. His lordship found that neither the Business Opportunity nor the Detail was in the public domain when Altana and Brevent set up their Venezuela fund.
Misuse
The learned judge held at [104] that there had been clear misuse of the Business Opportunity and the Detail:
"After the breakdown of the JV the Defendants simply carried on setting up the fund envisaged by the JV and called it the ACOF, to invest in the same assets as the AICF could have invested in and using the same corporate vehicle. They used the rationale for the AICF which was identified in the Fund Detail and the competitive edge given by knowledge of the need for protective proceedings which was also identified in the Fund Detail to market the ACOF. The ACOF implemented the strategy in relation to bonds identified in the Fund Detail and filed claims in New York in accordance with the IX confidential information about fiscal agency and prescription. Put simply, Altana and Brevent appropriated the Business Opportunity to themselves and exploited it."
The judge rejected Mr Robinson’s evidence that he always had in mind the creation of a Venezuelan debt fund when the bond price was right. He also rejected Mr Robinson and Mr Kastner’s evidence that there was a different investment thesis behind Altana's fund in that one of the funds intended to focus on claims while the other intended to focus on bonds.
Trade Secrets
The European Council and Parliament adopted Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ 15.6.2016 L 157/1) ("the Trade Secrets Directive") just before the 2016 referendum. I wrote about it in The Trade Secrets Directive on 7 July 2016. HM government implemented the Directive by making TheTrade Secrets (Enforcement, etc.) Regulations 2018 SI 2018 No 597 which I discussed in Transposing the Trade Secrets Directive into English Law: The Trade Secrets (Enforcement etc) Regulations on 6 June 2018.
Mr Justice Rajah considered the definition of "trade secret" in reg 2 and the meaning of "infringement" in reg 3 (1), He observed at para [111] that from the perspective of infringement, IX’s claim under the Trade Secrets Regulation stands or falls with its claim in misuse of confidential information in respect of the Business Opportunity. As IX has succeeded on that issue it also succeeded in establishing an infringement of the Trade Secrets Regulation.
The defendants argued unsuccessfully that IX had taken insufficient steps to keep the Business Opportunity secret because it did not try to extract non-disclosure agreements from recipients of its materials. The judge noted that each of the materials had been marked "confidential" and that he had already found that circulation of the Detail did not make the Business Opportunity generally accessible. He was satisfied that IX had taken steps that were reasonable in the circumstances to keep the Business Opportunity outside the public domain.
Copyright
IX claimed that copyright subsisted in a presentation about the Business Opportunity and that the defendants infringed its copyright by reproducing a substantial part of slides 5 and 10 of that presentation. The defendants challenged IX's claim to authorship and ownership of the copyright in those slides on the grounds that neither authorship nor ownership of those slides had been pleaded or proved. His lordship accepted that submission.
Much of the contents of the 5th and 10th slides had been copied from earlier presentations. The original content in slide 5 was limited to the words:
"A director is not personally liable for acts done as director which cause the company to commit a tort if the director has not acted wilfully or knowingly (at [85] per Lord Leggatt). The knowledge required for liability for either procuring another to carry out a tort or procuring a breach of contract is the same. 'What is required is that the defendant acted in a way that was intended to cause another party (the primary wrongdoer) to do an act which the defendant knew was a wrongful act (turning a blind eye being sufficient for this purpose)' (at [107] per Lord Leggatt). Knowledge that an act is wrongful is knowledge of the essential facts which make the act unlawful; see [108]."
In his lordship's view IX had not established that Mr Kastner or Mr Robinson knew that in establishing their fund they were using information which was IX’s confidential information protected by the non-disclosure agreement. Both Mr Kastner and Mr Robinson appear to have believed that there was no information provided to them by IX which was “proprietary” and protected by the agreement. They believed that Altana and Brevent were complying with their obligations under the agreement. They did not have the requisite knowledge that they were procuring a breach by Altana and Brevent. They were not acting wilfully and knowingly in the misuse of confidential information by the companies of which they were directors.
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