Playtech Software Limited v Realtime SIA & Anor

For a non-contractual obligation arising from unfair competition affecting only a specific competitor, Rome II Regulation directs attention to the law of the country where the direct damage occurs. The relevant connecting factor is not the place of the conduct or an indirect financial consequence. A UK claimant’s loss of licensing revenue is insufficient without evidence that the allegedly derived products reached the UK market. Where the pleaded misuse occurred in Latvia and the only direct damage was sustained there, Latvian law applies and the breach-of-confidence service-out gateway is not satisfied. In deciding the appropriate forum, the court must weigh all connecting factors, including applicable law, the place of the conduct and harm, and practical convenience. Latvia was the appropriate forum for the copyright claim because the screenshot and dispute’s centre of gravity were there.

Playtech brought claims against Realtime and Igors Veliks concerning alleged misuse of trade secrets and copyright infringement. The trade-secrets claim concerned access to confidential game information in Latvia and its use in developing derivative games. The copyright claim concerned a screenshot allegedly taken in Latvia and later sent while in the UK.

Thompsell J held that the claims disclosed serious issues under English law, satisfied relevant jurisdictional gateways and should proceed in England: [2024] EWHC 3264 (Ch). On appeal, the central questions were whether direct damage occurred in the UK, whether English or Latvian law governed the trade-secrets claim, and whether England was the appropriate forum.

1. Appeal allowed. The Court set aside permission to serve the claim form on Realtime and Mr Veliks outside the jurisdiction.
2. Applicable law and gateway. The parties’ claims fell within Article 6 of the Rome II Regulation. Since the alleged unfair competition affected exclusively the interests of a specific competitor, Article 6(2) made Article 4 applicable. The relevant connecting factor under Article 4(1) was the country where direct damage occurred. It was not the country where the acts occurred or where indirect consequences were felt. The Court applied the reasoning in Lazar v Allianz SpA [EU:C:2015:802], and the analogous reasoning in Kitechnology BV v Unicor GmbH [1995] FSR 765 and AMT Futures v Marzillier [2015] EWCA Civ 143, [2015] QB 399.
3. Trade-secrets claim. Playtech’s pleading relied on access and use in Latvia, with no allegation or evidence that the derivative games had been downloaded, accessed or made available in the UK. The claimed loss of UK licensing revenue was an indirect consequence and did not establish direct damage in England. The comparison with the UK-market Direct Claim in Celgard LLC v Shenzhen Senior Technology Material Co Ltd [2020] EWCA Civ 1293, [2021] FSR 1 was therefore inapposite. Direct damage was sustained in Latvia, Latvian law applied, and Gateway 21 was not satisfied. It was unnecessary to decide the alternative Article 4(3) issue or the provisional view concerning Article 4(5) of the Trade Secrets Directive.
4. Copyright claim and forum. The applicable forum test required England to be clearly or distinctly the appropriate forum, having regard to all the circumstances. The factors included applicable law, the place of the wrongful acts and harm, access to the courts, language and translation, and the interests of the parties and the ends of justice. Those principles were summarised in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804 and Lungowe v Vedanta Resources plc [2019] UKSC 20, [2019] 2 WLR 1051. Latvia was plainly the appropriate forum: the screenshot was taken there, Latvian law provided a claim concerning that act, and a Latvian court could determine subsequent UK secondary infringement.

• Court of Appeal (Civil Division): Allowed the appeal and set aside permission to serve the claim form on Realtime and Mr Veliks outside the jurisdiction.
• High Court of Justice, Business and Property Courts of England and Wales, Intellectual Property List (ChD): Thompsell J dismissed the jurisdictional challenge and held that the trade-secrets and copyright claims could proceed in England: [2024] EWHC 3264 (Ch).