Disputes Yearbook 2025:
Intellectual property disputes

Cross-Border Trade Secrets Disputes: Playtech v Realtime: No “Direct Damage” in the UK 

The Court of Appeal in Playtech Software Ltd v Realtime SIA & Anor [2025] EWCA Civ 1472 addressed the application of Article 4(1) of the Rome II Regulation in a cross-border trade secrets dispute. The key issue was whether Playtech could establish that “direct damage” occurred in the UK, enabling reliance on Gateway 21 to serve proceedings out of the jurisdiction on Latvian-domiciled defendants. Overturning the first instance decision of Thompsell J, the Court of Appeal held that, on Playtech’s pleaded case, no direct damage from the alleged misuse of trade secrets could have occurred in the UK. Consequently, English law did not apply, and permission to serve out was refused.

The dispute arose from allegations that a former employee of a Playtech's group company accessed Playtech’s confidential information via its Horizon platform and used it in developing games for Realtime. Playtech argued that the alleged misuse caused loss of licensing revenue in the UK and sought to rely on Gateway 21, which requires detriment suffered within the jurisdiction or that the obligation of confidence is governed by English law (it was common ground that it was not necessary to distinguish between these two aspects of Gateway 21 because both depend on there being "direct damage" in England and Wales). The Court of Appeal rejected Playtech's arguments, finding that the acts complained of occurred in Latvia and that any UK revenue loss was an indirect consequence, not direct damage. The court emphasised the lack of any pleaded case or evidence showing that Realtime’s games were accessed in the UK.

Applying the Rome II Regulation, the court confirmed that the governing law was that of the country where the damage occurs. Here, to the extent any damage had occurred at all, it would have occurred in Latvia. The judgment aligns with principles set out in Celgard v Senior, reaffirming that mere allegations of financial loss in the UK do not establish direct damage for governing law purposes. The Court also held that England was not the appropriate forum for the related copyright claim, as its centre of gravity was Latvia.

This decision underscores the importance of precise pleadings and evidence in cross-border trade secrets cases, particularly when seeking permission to serve out. Claimants must demonstrate where direct damage occurs, not merely where financial consequences are felt. For UK-based companies, misappropriation abroad may mean that foreign law applies and that England may not be the appropriate forum to hear a dispute. 

Herbert Smith Freehills Kramer LLP acted for Realtime SIA. For more details on the decision see here and our IP blog post here). 

For more information on trade secrets and their protection and enforcement see the series of articles on our Trade Secrets page here. 

AI & copyright (& trade mark) infringement in the UK - Getty v Stability AI

In November, the High Court found that the use of an image generating AI system (that had been trained outside the jurisdiction) was not infringing since the AI did not carry a copy of the allegedly infringed images within it. The impact of the case was lessened by the withdrawal of initial claims of primary copyright infringement in the use of images to train the AI, since there appeared to be no evidence produced during the trial that any training of the AI involved (Stable Diffusion) had been conducted within the UK. Getty Images, which alleged its images had been used to train the AI and were being infringed by its operation (specifically by its importation into the UK by its use in the UK - importation of an article containing an infringing copy of a copyright work being a secondary infringement under UK copyright law) claimed that the legislative provisions governing such secondary infringement should be interpreted to cover the AI model "which Stability knew or had reason to believe was an infringing copy of [the copyright works alleged infringed]". The court however considered that the way the AI functioned meant that at no time was any "copy" of the works incorporated into it, so it could not fulfil the requirements for secondary infringement (although it did hold that an "article" could include an intangible such as the software here). 

Getty Images did succeed on some of its trade mark infringement claims - Getty watermarks had appeared in whole or in part in some of the images generated by Stable Diffusion - but since this was resolved by Stability AI during the course of the proceedings, the findings had mainly historical impact. 

Heather Newton, Of Counsel, commented (on the day of the decision): 

"Whilst this is not the complete answer to the AI/IP conundrum that it originally promised to be, the judgment nevertheless helps inform what won't work for a claim in copyright infringement. The court has found that the Stability AI diffusion models do not retain or carry copies of training materials in a traditional copyright infringement sense and therefore cannot be an infringing article. The key infringement (not decided in this case) is the reproduction of the copyright material for the act of training itself, but this did not take place in the UK and was dropped by Getty at trial. It is a difficult outcome for Getty, but helpful for those involved in the AI and copyright industries to focus the complex debate around the use of copyright material to train AI." 

See our IP blog post issued on the day of the judgment (4 November 2025) for more details. 

The decision also gave Mrs Justice Smith the opportunity to review the law on the determination of exclusivity in IP licences. The nature of the licences Getty had in relation to the copyright works being asserted was challenged by Stability AI, an exclusive licence to Getty being a pre-requisite for it to have the locus to bring the copyright infringement action.  For a summary of the points made see our IP blog post Exclusive Licences – Key Takeaways from Getty Images v Stability AI. 

For more on AI & IP see our series of IP blog posts here. 

The UK courts' orders for interim licensing of Standard Essential Patents – a FRANDly approach?

Over the last year the UK Court of Appeal has been developing a new line of case law in the FRAND space – creating, for the first time, "interim licences". The principle that these decisions establish is that an implementer can ask the UK court to declare interim licensing terms, pending a determination by the UK court of full FRAND licence terms. If the SEP holder refuses to enter into the interim licence they risk being declared an unwilling licensor.

Read more about these key decisions and the interplay between the European courts over FRAND determination here as well as our series of FRAND/SEPs related posts  these Court of Appeal decisions and other FRAND/SEPs developments on our IP Notes blog. 

Accounting for profits – interest and double recovery 

Choosing to claim damages or an account of profits at the end of any intellectual property dispute is a difficult decision. It is typically driven by which the patentee thinks will lead to the higher recovery but that is often uncertain when it makes its decision. 

In the UK, decisions relating to financial remedies are few and far between, as parties often simply settle once the main infringement action has been resolved (and in light of the final injunction awarded). Cases involving an assessment of an account of profits are even more rare, which is what makes the series of decisions in the Lufthansa v Astronics patent dispute, culminating in a final decision on quantum from the High Court in April this year, so interesting. Taken together, these decisions help to clarify the general principles that apply to an account of profits and provide guidance on the court's approach where there is a risk of overlapping recovery in other jurisdictions for the same infringement ("double recovery"). 

The latest ruling confirms that a patentee can receive a substantial recovery even when it opts for an account of profits and can also be granted interest on the award (US $6 million interest in this case, bringing the total recovered by Lufthansa on account of profits to over US$18 million). The court confirmed its jurisdiction to award interest on account of profits for patent infringement, on both an equitable and statutory basis, and demonstrated that it was prepared to exercise its discretion to do so. While the pro's and con's of choosing an account of profits over the usual award of damages will depend very much on the circumstances of the case and the available evidence prior to that election, this case provides a helpful positive example for future patentees considering doing so. 

On the issue of double recovery, Lufthansa suggests that the English Courts are unwilling to grant provisional awards on account of profits, favouring finality. For patentees, there may be a strategic benefit to a particular sequencing of proceedings, for example to secure an early decision and finality in the UK. 

Read our analysis of these proceedings and decisions and the approach to account of profits here: Accounting for profits – interest and double recovery in Lufthansa v Astronics and Panasonic. It should be noted that the most recent (April) Lufthansa decision, which came to this conclusion on interest and double recovery, has been appealed to the Court of Appeal, with a hearing scheduled for March 2026. 

Extension of reach of the UPC and EU national patent courts to include UK patents (and UK defendants) 

In February 2025, the CJEU gave judgment in BSH Hausgeräte v Electrolux (BSH - see our blog post here), confirming that EU patent courts (in which category the UPC is included) had jurisdiction to decide infringement of both European Patents (EPs) and national patents of other EU states, without needing automatically to stay the action where invalidity arguments were raised in relation to those "other" EU patents. This had previously been an issue which had disrupted several sets of proceedings.

Prior to BSH, where, in cases before a national court involving infringement of EPs from that state plus other EU state patents, counterclaims of invalidity of those other state patents were raised, the courts held that although it could hear the infringement claims, only the national court of any particular patent could make a decision on validity and therefore the infringement proceedings needed to be stayed and the validity issued transferred back to the states of the "nationality" of each patent.   

The CJEU's decision in BSH also covered infringement of non-EU patents which it considered could also be heard by EU national patent courts, but in their case the court could consider validity when analysing infringement, but only on an inter partes basis.  

A robust illustration of the impact of this CJEU decision is the recent Munich Regional Court's award to Regeneron of an injunction over Formycon's aflibercept formulation in 22 countries, applying the CJEU's BSH reasoning (although here all the EPs involved were from within the EU). This has been followed by Onesta (an NPE) bringing three infringement actions against BMW in the same court in relation to automobile technology concerning manufacture in Germany but also sales in the US which Onesta claims infringe its US patents.  The infringement of UK patents could be determined by EU national patent courts in the same way. 

The new Unified Patents Court (UPC) has absorbed the BSH principles into its jurisdictional assessments and this has added to the "long-arm" jurisdictional confidence of this new court for one-stop-shop patent litigation over European patents (EPs). Prior to the BSH decision, the UPC was taking more tentative steps in this regard, although having already fully embraced its ability to draw in defendants which are in a commercial relationship with each other and involved in the same infringement.  

There has been a marked increase in instances of the UPC taking "long-arm" jurisdiction to grant injunctions in respect of EPs for activities in states that are not members of the UPC, including the UK. This has a significant impact on patent enforcement across Europe, since any EP could be within the UPC's jurisdiction (EPs can be awarded by the EPO for any EU members state but also for several non-EU states such as Switzerland, the UK, Norway and Turkey).  UK based businesses not already familiar with the UPC should gain an understanding of how the UPC works as the long-arm jurisdiction could mean they may be drawn into its enforcement system as a defendant if accused of infringing a UK EP. Equally, UK businesses may wish to use the new court to enforce their EPs across the full extent of the territories over which the EPO has granted them patent rights (the EPC states which comprise the EU states, Albania, Iceland, Liechtenstein, Monaco, Montenegro, North Macedonia, Norway, San Marino, Serbia, Switzerland, Turkey, and the United Kingdom). Similarly non-UK entities holding UK EPs should consider the UPC's jurisdiction over those as an alternative or additional forum for their patent disputes. 

Read our briefing The UPC Two Years On and other UPC updates for more on the impact of BSH and the use of long-arm jurisdiction by the UPC.  For background on the UPC including its member states and procedural approach visit our UPC and unitary patent hub. 

Plausibility, implausibility and arbitrary selections – the patent bargain as the guiding light under UK law

The "patent bargain" is the foundation of patent law – in exchange for a 20 year monopoly, the inventor discloses their invention to the world.  Inherent in this is a quid pro quo, that the disclosure must be commensurate with the reward.  Under UK/EU patent law, this is tested under the related concepts of sufficiency, enablement and plausibility.  But what does this mean in practice?  In July 2025, the UK Court of Appeal recently opined on the topic in the case of Generics UK and others v AstraZeneca. 

You can read in detail about the Court of Appeal's decision in our IP blog post here, but this case is a harsh reminder of what happens when a patent is filed without any data supporting the therapeutic use (the key is here is 'any', as the threshold for plausibility should not be an onerous one).  Patents should always be filed with some kind of technical rationale, and this could possibly include in silico data if it is convincing enough (or eg reasoning by reference to the prior art, although care should be taken not to make it seem that the invention was obvious).

For more on patent disputes follow our series of blog posts on patent topics on our IP Notes blog.