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.

Comment

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.