Background
Illiquidx Limited (IX), a boutique advisory firm specializing in illiquid investments with expertise in Venezuelan debt, identified an investment opportunity in distressed Venezuelan sovereign and corporate bonds in 2019. Despite US sanctions restricting US persons from buying these securities, non-US investors could lawfully trade in secondary markets through Euroclear and certain listed bonds. IX developed a concept for a sanctions-compliant investment fund to exploit this opportunity and shared this business strategy with Altana Wealth and its consulting partner Brevent Advisory in connection with a proposed joint venture.
In June and July 2019, IX and the defendants executed a joint venture agreement and a non-disclosure agreement governing the Venezuelan debt investment opportunity. The NDA defined “Confidential Information” broadly to include concepts, transaction structures, and intellectual property disclosed by either party. During the summer of 2019, IX provided the defendants with multiple documents detailing its strategy, including presentations and fund fact sheets outlining how a sanctions-compliant fund structure could unlock value in undervalued Venezuelan debt.
The joint venture dissolved in November 2019 without launching a fund. In July 2020, Altana launched its own fund focused on distressed Venezuelan debt. IX then sued for breach of confidence and misuse of trade secrets. At trial, Rajah J found in favor of IX, holding that Altana and Brevent had misused IX’s confidential business strategy. The defendants appealed, arguing principally that the information was in the public domain.
The Court’s Holding
The Court of Appeal, speaking through Lord Justice Arnold, affirmed the trial judge’s decision and rejected the defendants’ interpretation of “public domain” in the NDA. The court held that “public domain” bears its well-established legal meaning: information that is “so generally accessible that, in all the circumstances, it cannot be regarded as confidential.” The defendants had contended that “public domain” should mean any information available or disclosed without an obligation of confidence—a narrower threshold requiring only that one other person be legally free to use the information.
Lord Justice Arnold explained that where a term of art with established legal meaning appears in a professionally-drafted contract, the presumption—absent contrary wording—is that the parties intended that well-established meaning. The NDA contained no language suggesting a departure from the traditional understanding of “public domain.” The court rejected the defendants’ argument that the NDA’s broad definition of Confidential Information required a correspondingly broad interpretation of the “public domain” exception, finding no necessary correlation between the two provisions. The presence of specific components in the public domain (such as lists of tradeable bonds on the OFAC website) did not place IX’s synthesized investment strategy and fund structure concept into the public domain.
Key Takeaways
- In professionally-drafted agreements, “public domain” retains its traditional legal meaning—information is only in the public domain if it is generally accessible and cannot be regarded as confidential—not merely if available without a confidentiality obligation.
- A structured investment strategy and business concept can remain confidential and protected even when the individual components (such as specific securities or regulatory frameworks) are publicly available.
- Breadth of a confidentiality definition does not automatically require breadth in interpreting exceptions to that definition; each clause’s scope depends on its own wording.
- The court will not lightly infer departures from well-established legal meanings based on contractual context alone without clear textual signals.
Why It Matters
This decision reinforces robust protection for business strategies and investment concepts disclosed under NDAs, even in contexts where underlying data or components are publicly accessible. For practitioners drafting or litigating NDAs, the judgment makes clear that courts interpret “public domain” exceptions conservatively, according to their traditional meaning. This limits defendants’ ability to escape confidentiality obligations by pointing to the mere availability of component information or arguing that someone else was legally free to use it.
The case is particularly significant for venture capital, private equity, and specialized finance where the core value often lies in synthesized strategy rather than in identifying individual assets or opportunities. It demonstrates that confidentiality protections can attach to methods, structures, and approaches to exploiting opportunities, and that failed partnerships do not automatically place disclosed concepts into the public domain. Parties seeking to rely on a “public domain” defense to confidentiality claims face a high bar: general accessibility in the manner contemplated by law, not merely technical availability or freedom from another party’s contractual claim.