Illiquidx v Altana Wealth: Information can be both confidential and public-domain

One year on, the High Court’s decision in Illiquidx Limited v Altana Wealth Limited & Ors remains an important authority on the scope of confidentiality obligations, the meaning of “public domain” in non-disclosure agreements (or NDAs), and the threshold for liability under the Trade Secrets Regulations. The judgment illustrates how, in certain circumstances, information may still be classed as confidential even if some of its underlying components are publicly available.

Background

Illiquidx, an advisory firm specialising in illiquid investments, entered into a joint venture in 2019 with Altana Wealth and others to explore the possibility of launching a fund to invest in Venezuelan distressed debt. As part of those discussions, Illiquidx shared a package of confidential information (described as the “Business Opportunity”) under the terms of an NDA.

Although the joint venture came to an end without a fund having been launched, Altana later went on to establish its own fund, targeting the same business opportunity. Illiquidx subsequently raised proceedings alleging breach of the NDA, misuse of confidential information, infringement of trade secrets, and copyright infringement in relation to slides from a PowerPoint presentation it had provided during the discussions.

Breach of confidence and trade secrets

The key issue was whether Altana had used information that was genuinely confidential. Altana argued that Illiquidx had not clearly identified what information was confidential and, in any event, the relevant information was already known or available in the public domain.

The Court disagreed, finding that the “Business Opportunity” had been sufficiently identified and retained the necessary quality of confidence. Crucially, while certain elements of the information were publicly available, the way Illiquidx had brought that information together, through selection, analysis and presentation, was not. Specifically, the collation of the information to formulate a rationale for the idea of a sanctions-compliant fund to invest in distressed Venezuelan debt was not in the public domain. Altana’s use of that material to establish its fund therefore amounted to a breach of the NDA and misuse of confidential information.

Given that Altana had acted in breach of the NDA, it was also found to have acted in breach of confidence and to have made unlawful use of a trade secret, contrary to the Trade Secrets (Enforcement, etc.) Regulations 2018. Altana argued that Illiquidx had not taken reasonable steps to keep the information secret, for example by not requiring NDAs from each of the 200 potential investors before sharing the confidential information. The Court rejected that argument, finding that such a step would have been impractical and was not necessary in the circumstances.

Copyright

Illiquidx further argued that Altana had copied two slides from a PowerPoint presentation. Although Altana accepted that there had been some reproduction, the Court found that the copied material did not represent a substantial part of the overall work, and that Illiquidx had not established ownership or authorship of the slides in any event. The copyright claim therefore failed.

Director liability

Illiquidx also sought to hold some individuals personally liable, including Altana’s directors. The Court applied the Supreme Court’s decision in Lifestyle Equities v Ahmed, which confirms that directors are not personally liable for a company’s wrongdoing unless they act wilfully or knowingly with awareness of the essential facts.

Despite expressing strong concerns about the credibility of Altana’s directors, the judge concluded that they “appeared to believe” that the companies were complying with the NDA. On that basis, they lacked the requisite knowledge that the information was confidential and therefore were not personally liable.

The judgment also contained criticism of correspondence sent during the dispute. In particular, the judge considered that a letter sent by Altana’s solicitors to a director of Illiquidx, which alleged substantial financial loss arising from allegedly defamatory statements, was unsupported by the evidence. The judge described the claim as a “significant lie” intended to pressure the recipients.

Conclusion

This decision is a useful reminder that information can still be protected even where it draws on material that is publicly available. The key question is whether the way that information has been selected, structured and presented gives it a confidential quality of its own. It also highlights the importance of well-drafted NDAs in protecting commercially sensitive opportunities, while showing that it can be difficult to pursue individuals personally unless there is clear evidence that they knowingly acted wrongly. Finally, the judge’s criticism of the threatening letter sent by Altana’s solicitors serves as a warning that an overly aggressive approach in correspondence can carry real risks and may ultimately prove counterproductive.

This article was co-authored by Trainee Eva Curran.

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